23 out of 26 peer reviewed taxation papers show that.......

...tax cuts create jobs and promote growth. Period.

"This review of empirical studies of taxes and economic growth indicates that there are not a lot of dissenting opinions coming from peer-reviewed academic journals. More and more, the consensus among experts is that taxes on corporate and personal income are particularly harmful to economic growth, with consumption and property taxes less so. This is because economic growth ultimately comes from production, innovation, and risk-taking."

Some money quotes of particular interest in this election:

• "Fiscal stimuli based upon tax cuts more likely to increase growth than those based upon spending increases. Fiscal consolidations based upon spending cuts and no tax increases are more likely to succeed at reducing deficits and debt and less likely to create recessions." -Alberto Alesina & Silvia Ardagna, Large changes in fiscal policy: taxes versus spending, in Tax Policy and the Economy, Vol. 24 (Univ. of Chicago Press, 2010)
• "Taxes directed towards public investments first add then subtract from GDP." - N. Bania, J. A. Gray, & J. A. Stone, Growth, taxes, and government expenditures: growth hills for U.S. states, 60 National Tax Journal 193-204 (2007).
• "Tax-financed spending reduces growth in developed countries, increases growth in developing countries." - Stephen Miller & Frank Russek, Fiscal structures and economic growth: international evidence, 35 Economic Inquiry 603-613 (1997).

Sure you can quibble that Tim Hudak's Million Job plan won't create a million jobs, but you cannot honestly state that the main thrusts of lower taxes, lower spending, reduced corporate and home expenses, and reduced regulation won't have a positive impact on the economy. Almost every study agrees that it will.

The Liberals, the NDP, and their union and media lapdogs are simply economic deniers putting their children, and their children's children at financial risk so they can continue down "me me me only about me" path.

h / t to Jack Minz's article in the Financial Post on May 29th. I had to fix his link to get it work.

Stop the populism - HST is a good tax

I am tired of the simplification in arguments about the HST. Seriously, let's get informed in this. This simplification, and the Ontario Progressive Conservatives (as well as the Federal NDP etc etc) intent to make this a populist revolt are simply uneducated. Stop playing on fear, uncertainty, and doubt and start educating, and having an informed debate.

From an old TorontoStar editorial:
Sales tax harmonization is simply good for the economy as has been shown in other jurisdictions. In fact, Canada is the only one of 30 OECD (Organization for Economic Co-operation and Development) countries to continue to use a two-tier sales tax system.

And the top 10 benefits for the BCers out there.

Come on, get informed people.

Hope-o-crisy II

The original video was "disappeared" from YouTube. After some digging around I found it again.

Enjoy!



Pass it around.

NDP to spend 18 billion more a year

Yikes! By year four of their campaign, the NDP promise to spend an additional 18.1 billion dollars a year on their pet projects.

This should put a halt on their drive to Stornway.

The NDP have no clue on economics. In year 1, they would spend an additional 8 billion in new spending. They will pay for this by spending the surplus, pulling the troops out of Afghanistan, rolling back the corporate tax cuts the Conservatives instituted in the last budget. The NDP would increase taxes on corporations by raising the tax rate to 22.12 per cent from 19.5 per cent

One has to ask himself, why does Jack Layton hate the working Joe so much?

The NDP's big Shift
As far back as the sixties, empirical studies of corporations with respect to taxes have been made. They have found that corporate income taxes are shifted, even in fact over-shifted. An important implication of this shifting is that cost of corporate goods and services are increased enough to pass the tax on to consumers.

Also, "... a 10 percent increase in the effective corporate tax rate reduces aggregate investment to GDP ratio by 2 percentage points. Corporate tax rates are also negatively correlated with growth, and positively correlated with the size of the informal economy."

Don't believe me? Google "economic effect of increased corporate taxes" and educate yourself.

I have to wonder what the NDP really think that corporations do with their profits? I swear, I bet Jack thinks there is a really big mattress tucked away somewhere, and that is where all the corporate profits end up. They obviously think this.

Realistic people know that corporate profits go towards new R&D, new investment, to fuel growth (new jobs), increased salaries or benefits, and many more ideas like this.

Corporate tax increases are bad for economy. In this time of global economic uncertainty we should not risk our standard of living to tax the very institutions that provide the jobs, the capital, investment, and growth that make this economy as robust as it is.

Their is a reason that the NDP are not considered good stewards of our economy, and this platform amply demonstrate why.

We can all thank god that the NDP will not win this election. Thank God!

We're better off with Harper.

Hope-o-crisy

The real truth behind the sub-prime fiasco. Interesting look at how sub-prime fiasco got started, a bad government regulation....

Misrepresenting the truth, say it ain't so

Look for the Liberals to try and make hay on the latest report from OCED.

Now I am not an economist, nor pretend to be. But it seems that 6 of the G7 countries are being revised downward in this report.

1. Canada
2. Japan
3. Germany
4. Italy
5. United Kingdom
6. France

Yet somehow it is all the Conservatives fault, and that somehow a Liberal government would have avoided this. Sighs.

The only country to actually see their growth targets adjusted upwards was the United States. And in the next quarters as the American economy regains its footing and starts buying and importing we will the G7's economic growth improve. This will be lead by Canada as we are next to the biggest economy of the world, oh, and we are their largest trading partner.

Coal use vs the GDP

A commenter posted on my blog about the record usage of coal in response to my post on the decrease in gasoline usage in the United States. He is right, the United States is using more coal now.

But honestly, what do you expect?

As the economy grows, more energy is required. Bringing more energy on the grid takes time. Most of the renewables are not reliable enough yet, so, old ways of creating energy are restarted. Coal plants work, they are reliable, and pretty cheap. Until greener alternatives come online, coal will be used to handle peak demand.

As you can see by this chart, coal usage has kept pace to, or lagged behind GDP growth. (Please note: I am neither an economist, nor a statistician, if there is an issue with the graph please don't attack me personally over it. I am not trying to misrepersent the truth here. I gathered the numbers from the link the poster had in his comment, and from sources I googled online.)

Hopefully, scrubbers and other clean coal technology can be employed to mitigate the health and environmental risks associated to coal power. This is irrespective of which side of the climate change debate you fall under.

This is the same issue the Ontario government is having trying to decommission the old coal fired generating stations.

Guess what we are using 800,000 less a day of?

Barrels of oil, that's what.

The Globe&Mail is reporting that the US is using 800,000 less barrels of oil a day. This downward trend is expected to continue through 2009.

What can we learn from this? The Green (as in our money) Shift (as in distribute the green to core constituencies) is not required. Market forces did the trick. Damn capitalism.

Due to reduced demand, oil prices have dropped. The market has corrected. Since we are a petroleum currency, the dollar has dropped to 0.94 USD. This should help our beleaguered manufacturing and services industries.

Also, as the Canadian and American people drop their SUVs and trucks for smaller, more fuel efficient vehicles, they are unlikely to switch back to SUVs and trucks even if the dollar continues its downward trend. (I can't see it going too much lower).

If Stephane Dion is so foolish to force an election and fight over this issue, I will be sure to campaign hard against it. Putting a price on carbon is one thing, I can deal with this. Taking my upper-middle class tax dollars (single income at that) and giving it to their core constituents is a complete other thing.