Leftist government cutting taxes for corporations?? Plus Kyoto and energy

[Flubber]

Originally posted by Azazel

Not all taxes are porportional to profits. Some taxes take the form of fees that are imposed regardless of profits.

Unless we're speaking of natural resource exploitation, I can hardly think of fees that are nothing more than chump change (property taxes are a notable exception )

Well the example here was natural resource exploitation. Royalties are taken by government ( in their role as owner of the resource) as a proportion of total production and its often irrelevent if the venture is profitable

[chequita guevara]

Originally posted by Flubber
Interesting take.

So are you saying that a government should not offer tax breaks to stimulate growth in an industry that would otherwise not be developed at this time??

Given the current political and economic reality, I don't think they have a choice. Capital can easily extort governments to do their bidding. Before the fall of the USSR, capital would accept far less favorable terms.

My own position would be that if the market isn't favorable to capital, then the state should create the enterprise. Then the people of Newfoundland would be getting all the revenues, not just a portion.

[Az]

Well the example here was natural resource exploitation. Royalties are taken by government ( in their role as owner of the resource) as a proportion of total production and its often irrelevent if the venture is profitable

I have no problem with replacing it with a 85+% industry specific corporate tax.

My own position would be that if the market isn't favorable to capital, then the state should create the enterprise. Then the people of Newfoundland would be getting all the revenues, not just a portion.

[Flubber]

Originally posted by Azazel

So are you saying that a government should not offer tax breaks to stimulate growth in an industry that would otherwise not be developed at this time??

Problem is, the tax rates don't make the industry uneconomical... just makes the profit margins lower ( unless there is a price war going on). Thus, it's not the government "stimulating growth by stopping to choke poor industry", it's "government having to collect less money, because they don't have a choice" .

I don't understand your point . . . Sure government have a choice. They can tax at one rate and accept one set of anticipated consequences or tax at another and face a different set of consequences.

They also face a third choice. Nothing is stopping government from developing some of these fields themselves except for expertise, capital and an unwillingness to take the risk. and in natural resource exploitation it is hardly ever a "sure thing"

[Az]

I don't understand your point . . . Sure government have a choice. They can tax at one rate and accept one set of anticipated consequences or tax at another and face a different set of consequences.

They also face a third choice. Nothing is stopping government from developing some of these fields themselves except for expertise, capital and an unwillingness to take the risk. and in natural resource exploitation it is hardly ever a "sure thing"

well, if they're not going to start, they'll never do it properly, will they?

Government companies all over the world have expert knowledge in many fields. Despite all lies, Government corporations work.

[Flubber]

Originally posted by chegitz guevara


Given the current political and economic reality, I don't think they have a choice. Capital can easily extort governments to do their bidding. Before the fall of the USSR, capital would accept far less favorable terms.

Wow loaded terms. Where is the extortion? Government has a choice and individual businesses have a choice.

Originally posted by chegitz guevara


My own position would be that if the market isn't favorable to capital, then the state should create the enterprise. Then the people of Newfoundland would be getting all the revenues, not just a portion.

Nice theory but quite frankly the government of Newfoundland did not have the capital. Also I doubt that the government been able to risk the capital had it existed.

Its all well and good to look at these projects in the light of 57 dollar oil. But remember it was not that long ago that oil was 12 dollars. That was the environment when many of these dicisions were taken.


Lastly-- Newfoundland state enterprises are notoriously inefficient. Talk to people in the know about Newfoundland Hydro . . . The overstaffing is ludicrous but perhaps you would support a lot of people being in do-nothing jobs as it lessens unemployment

[Az]

Wow loaded terms. Where is the extortion? Government has a choice and individual businesses have a choice.

Libbie talk

You have a choice to starve to death. lalala.

[General Ludd]

Originally posted by Azazel

You have a choice to starve to death. lalala.

That's one of the most fundemental natural rights. The right to starve to death.

[Kuciwalker]

What's the government supposed to do to get companies in OTHER COUNTRIES to do stuff?

[Flubber]

Originally posted by Azazel
well, if they're not going to start, they'll never do it properly, will they?

True-- The first thing they need to do is attract all the geophysicists, geologists and engineers necessary. Now those people are highly mobile and professional so you will probably have to pay them significantly above market rates to get them to relocate to remote Newfoundland with the high tax burden . . . Oil Companies routinely give existing employees salary uplifts of 25% to compensate for the taxes. etc etc --- Have fun with the recruiting!!!!

Originally posted by Azazel


Government companies all over the world have expert knowledge in many fields. Despite all lies, Government corporations work.

I don't doubt the expertise of many government agencies and corporations. What I doubt is that they are as efficient as private business, particularly in Newfoundland.

[Odin]

Originally posted by Kuciwalker
Poor leftist governments. When they raise taxes the evil businesses go elsewhere

Yep, California has such a bad economy, oh wait...

[Flubber]

Originally posted by Azazel

Libbie talk

You have a choice to starve to death. lalala.

By Libbie do you mean "Libertarian" because I am far far from their philosophies. Try again.

Where is there no choice here? If the Sask government wanted to develop the oil themselves, they are free to try. The government owns the resource after all . No instead they want someone else ( the oil company) to do all the work and they simply rake off an amount... . . and they don't just take a percentage of the profits, they take a percentage off the top with no gurantee of a satisfactory return for the oil company. If a capitalist did the same thing to a worker, all the commies would be up in arms

[DinoDoc]

Yes, they do.

[Az]

No instead they want someone else ( the oil company) to do all the work and they simply rake off an amount

And that's very fair, since they own the resource.

If a capitalist did the same thing to a worker, all the commies would be up in arms

those aren't equivalent, and you know it.

True-- The first thing they need to do is attract all the geophysicists, geologists and engineers necessary. Now those people are highly mobile and professional so you will probably have to pay them significantly above market rates to get them to relocate to remote Newfoundland with the high tax burden . . . Oil Companies routinely give existing employees salary uplifts of 25% to compensate for the taxes. etc etc --- Have fun with the recruiting!!!!

Why not? That sounds like the same thing that the oil company would have to do.

[Flubber]

Originally posted by Azazel
[
Why not? That sounds like the same thing that the oil company would have to do.

Actually the oil companies run their Canadian operations from Calgary and only transfer people to Newfoundland when there is a proven project. In the meantime they have the benefit of having their people work on anything that arises regardless of geography. IN a Calgary office are people working on exploration in pretty much every continent on earth

Newfoundland state oil would necessarily need people in Newfoundland at the earliest stage as it would be politically unpalatable to base them elsewhere. Remember though at the initial stage you would have to recruit people before any exploration is done so there would have been the possibility that nothing would be found. I'm also curious about how fun it would be politically to see 10-15 early drilling failures at 30 milllion dollars a pop. After 3 or 4 , the state oil company would have been shut down as another pipe-dream