Are you arguing my point, or yours? Your comment seems to argue mine. IF this company received a better tax incentive to stay here... Maybe they would have. A single percentage point? Wow... how many people were unemployed by the reluctance of government to reduce the taxes by 1%. If we had lowered your companies taxation rate, we wouldn't have had HOW MANY people on unemployment? TAKING from the system instead of paying into it. How long did most of these people stay on EI? I wonder how much income tax was LOST due to the inability of government to reduce that 1%.. or find a way to subsidize this company. Was this move right after there was a raise in minimum wage? Do any of the employees of the company MAKE minimum wage? What other factors went into this company leaving.
Our dollar for the most part over the last 5 years has been at Par with the US. Here's what we're competing with:
They left because the tax rate somewhere else was cut lower faster than ours. That's it, most of their other costs were equivalent and they paid skilled and experienced Cnadians to re-locate when local skills weren't available (almost all their workers here were contract and EI was negligable). It's a competitive world, and whatever basis you choose to compete on you'll have to be prepared to stay in the price-cutting game all the way down. But remember that butcher bankrupted by his Groupon giveaway.
You're right. As a government cutting the taxes of a corporation, and not increasing workforce as a country, we are poorer. Sometimes you have to take a loss to come out ahead in the long run. We cut the corporate taxes, we keep people employed. You know what I compare this to? Sometimes stores put items on sale and take less profit, to generate loyalty and goodwill with their clients. Companies are the governments clients. Sometimes you have to throw them a bone to keep them happy. US Unemployment rate currently is roughly 8.2%. Canadian is 7.4%. Seems our Global Economy isn't doing too badly. Let's keep the companies that call us 'home' here, and not have them lured to the US - our workforce will thank us.
The missing element here is 'the long run' gain. Where is it? If the corporation only came here, or only stays here because we cut taxes—making all that EI, free medical care and maternity leave stuf you offer as a given impossible to maintain—how are we better off?
A loyal company in Canada. How about Molson's. Tim Horton's - who flirted with the idea of moving their corporate offices south of the border, but eventually decided to stay. CARA restaurants, who recently bought out a portion of Prime Restaurants America. They could go south, for now they're here. Let's see, how about TD Bank or ScotiaBank who have large corporate presences in the US and South America. Sure they'd lose some recognition here as a Schedule 1 bank, and they could take their billion dollar annual profits somewhere else.
And they will. Loyalty? from corporations? If it existed why are we even talking about buying it with tax cuts? tell me the tale of the Hudson's Bay Co, Canadian Pacific and CN again. Those loyal, iconic Canadian companies went where the money is. It's what they're supposed to do.
This reminds me of a bait and switch "introductory rate" mortgage or even better one of those Ally bank commercials. "Yeah, but he's NEWER" - even the kids know it's a load of crap. The guy who's been here forever feels like he deserved the break, and you gave it to someone to lure them in. Well guess what, Corporations aren't that stupid. Cuz pretty soon he ain't the new guy, and you're gonna screw him just like you're screwing the old guy.
You got it in one. By screwing—literally and figuratively—everyone whose last name isn't Walton, WalMart made itself huge by lowering prices. But even their experts cannot set prices below costs for long. Taxes are the price of doing business here, and the trouble with the 'let's cut corporate taxes' folks is they haven't done the hard work of cutting their costs first, and making sure they can sustain those low prices. Not even like sweatshop-loving WalMart. Without that, they're just a one-off loss-leader, and even with that you still have to compete with places that think sweatshop jobs are an improvement. Perhaps you haven't noticed, but every government in these parts has a huge deficit. After they're in surplus, then they can sensibly cut taxes. Only fools and fanatic fairytale believers would cut revenue to stay in the black
Being the best? Ok, let's offer free health care. Let's be the second cheapest country with regards to the cost of energy in the world. Let's provide 52 weeks paid to the women in our country who give birth (In the US you get 12 weeks - potentially unpaid - PROTECTED parental leave - all that means is your employer can't fire you for taking time off). Let's provide MANY social programs for our citizens.
All those things we'd have to give up of course. Corporate taxes paid a large part of their costs and still do. And without more people working in better paying jobs, we'd not be able to keep them, let alone keep up with the needed improvements over time. Or do you think we already have enough MRI machines? I know your prescription for those improved jobs is corporate patriotism, but I don't buy it.
Here's what might attract modern high-paying companies to set up here: A highly educated, highly skilled and highly motivated workforce that brings enthusiasm and excitement to the challenges of their work each day. That's gonna need a serious commitment to making this City, province and country better places to live, not just cheaper ones.
But to start with: Who's going to pay for the large improvements that our schools need to catch up to the places whose children already score better and whose governments are quite ready to out-compete us in corporate givewaways?
