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What is the point of corporate tax cuts?
There were corporate tax cuts put into law several years ago, among the lowest in the world, and corporations still shut down business either to outsource it or move to a different country for cheaper costs.
So, what is the point of corporate tax cuts if corporations will just end up moving to a different country thus eliminating jobs?
May as well take as much money from them in taxes before they ditch the country.
I'm talking about Canadian corporate tax cuts, which sit at 18%.
Sure, they are supposed to increase investment, but there are still many corporations who pack up and leave despite the continuing tax cuts. at best there's a mixed result of corporate tax cuts.
"Actually ours are among the highest in the world. My lack of a source trumps yours."
Since when was I talking about American corporate tax cuts?
- Anonymous1 decade agoFavorite Answer
Corporate tax cuts are supposed to increase investment incentives and boost development within the company, resulting in more jobs.
The only problem is that companies aren't required to spend their new funds on expansionary/developmental projects, or anything in particular really, so much of that new cash falls into the execs' pockets through bonuses and increased profit margins.
- 1 decade ago
It's not that our corporate tax rate is low (it's not). It's that the tax code is riddled with loopholes so corporations end up paying very little of what they should be paying (ie GE paying $0 in taxes but getting billions of dollars back in tax refunds).
We need to reform the tax code while at the same time slightly lowering the corporate tax rate to encourage investment in America while also allowing the government to get tax revenue. Do this, end the Bush tax cuts, cut defense spending, and tweak (not gut) Social Security and Medicare, and we're out of the debt crisis and America will be working again.
Edit: Ah, sorry. Didn't see this was with regards to the Canadian tax rate. Well, my offer still stands for my fellow Americans. Not much of a Canadian political expert, unfortunately.
- Anonymous1 decade ago
Corporate taxes are only applied to profits. Increasing corporate taxes would not increase prices despite what the contards will say.
Also, corporations share of the tax burden pie has only been decreasing and they have not made jobs here, the only thing corporations have done for jobs in America is lower wages.
Many corps don't pay taxes in fact they get rebates.
- ?Lv 71 decade ago
What is the point of corporate taxes when they will just pass it on to the customers and raise the inflation rate? It's the poor who end up paying for it.
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- 1 decade ago
That's a great idea. Better yet, why don't we just confiscate all of their property for the common good, then they won't be able to leave! And, we can all share in the profits.
Wait, that's been tried before? And it was a terrible failure?
Those who do not learn from history are bound to repeat it (or something like that).
- ?Lv 41 decade ago
Actually ours are among the highest in the world. My lack of a source trumps yours.
Since when did you specify?
You are only speeding up the process of them leaving your country.
- ?Lv 61 decade ago
Corporations are hit hard enough with payroll taxes to go overseas. Add in corporate taxes, and it sends them packing that much sooner.
The other choice is, either lower wages here, or lower the tax rate for the middle class workers. (payroll tax)
- jehenLv 71 decade ago
Um the corporations paid to elect the congress, they expect service for their money.
- Anonymous1 decade ago
They don't pay tax anyway. so what does the rate matter?