This is an important discussion. To my mind we need public investment banks to build the capacity to plan by taking equity positions in. Innovative firms. They should be at arms length from the government.
Picking winners or industries to favour has been problematic no mater where you look, maybe Singapore can be considered an exception. Maybe.
If we want to incentivize innovation, investment and ingenuity across Confederation, why not go the Estonia way and exempt companies from corporate / income tax on R&D and investment? The loss of revenue would have to come from somewhere (shareholder income distributions? Slightly higher income tax for the 1%?).
Nation-building projects (internet coverage, transportation networks, pipelines, ports, etc) should be managed by a government-owned, arms-length Crown Corporation which will own the project and once built, lease the asset to private operators to recoup the money over say 30 or 40 years. Why not?
The key for Canada is there are a number of business/investment models explored, tested and with some good data/lessons to examine and apply. Canadians can and have been innovative in a number of industries. However, it's important to keep them Canadian rather than selling them off to foreign interests. Cooperatives are also a tried/tested model. This model involves talented workers whose value is greater than just a hired-hand but instead an active decision-maker and contributor. I have been rather surprised at the number of shills for corporate welfare out in our business sector.
Good read and refreshing to see the finger pointed at the global transnational broligarchic corporate agenda(so I fleshed it out a litte. GTBCA. Meh.)
I do think that lefties think that talking about the evils of neoliberalism will get them lots of likes and invited to parties. But it is a mere effect not a cause.
At the helm and guiding the ship and virtually IS the ship is the GTBCA.
Regarding industrial policy, Carney intends to leverage big time private investment in the public sector. He's never made that a secret.
We just want him to maintain public control and ownership with strict buy in and buy out guardrails.
Right now, corporations come, take the money, stay for a short drink from the well, maybe set up shop then leave. With the money and jobs gone. No more looting Canada.
We own the means of production. We the people. We hire the government to work for us. We the people. The GTBCA will just have to wait in line.
Industrial policy vs. Corporate welfare: sorry, but I really didn't see a clear answer to that. What exactly is it about industrial policy that separates it from corporate welfare? And how does the state do anticipatory models any better than they have to date? The problem with state involvement in encouraging economic behaviour is that nobody has a crystal ball. That's why you let the market sort it out.
I suggest the state's involvement should be limited to regulation for the sake of safety and the common good. Public infrastructure is easy to support, but it's less easy sometimes to make a distinction between it and corporate welfare, as seen with the CPR saga. Ontario Hydro is another problematic example (given its debt), but I thought it was an interesting observation in Pierre Berton's book Niagara, that Ontario's public effort at building a hydro plant got the job done while NY's supposedly free market kept their efforts tied up in legal knots. Personally, I think Ontario's Hwy 407 exposes the incompetence of its Ministry of Transportation in providing comparable efficiency in getting something built rather than a solid case for privately owned highways.
Perhaps infrastructure should only be a public concern when private industry begs off on doing the job itself.
The tax code's role was touched on but I think it deserves more discussion. I believe corporate taxes can be re-jigged to incentivize investment more efficiently than currently is the case, but it would require a drastic re-think of tax policy.
The idea is this: instead of taxing corporate income, tax ONLY the capital and labour that are used in Canada. Rather than discourage absolutely both capital investment and hiring as is often argued, corporations would be encouraged to ensure that both capital investment and labour are as productive as possible in order to minimize their tax, and are only made when those investments can be justified by a market driven rate of return. The rates being equal across industries would also encourage an efficient allocation of capital and labour in the economy in general. Which is the point of the original question.
It would also increase the tax base and lower rates (all corporations have capital and labour, not all have taxable net income), an argument often used to promote consumption taxes over personal income tax. Well, that logic can apply to corporations too. For those that lose money and would now do so without seeing a tax break, well, that's management's problem, not government's.
And there’s no need to agonize over what the rates should be. Just take the total current corporate tax receipts (including payroll taxes) for the country (averaged over a few years or adjusted as seems appropriate), and divide half by the total corporate labour expense, and the other half by total corporate capital (using historical cost data) invested here, and there are your rates for each, with no advantage or disadvantage to either. Capital tax rates would be about 1.5-2%, while labour tax rates would be 10-12%, (incl. provincial portions) which seems high but not so much given that it would replace current payroll taxes.
Whether the total corporate tax take across the country is an appropriate amount in the first place compared to other taxes is a political and economic question outside the scope of this proposal. At least maintaining that level would have the advantage not being construed as either a tax hike or a tax cut, although some firms or even industries would be hit harder than others. But that's the point - it's the better run ones that would be rewarded.
This would also have the added benefit of discouraging extreme executive pay/bonuses, as these would now attract tax rather than being a tax deduction. Or at least executives would be harder pressed to justify their remuneration.
This proposal is part of a greater tax/welfare reform that would replace CPP, EI and minimum wages with a partial basic income.
And yes, a capital tax could raise arguments about measurement of capital (historical/depreciated cost vs. tax cost or current/market value) as well as potentially discouraging pure research, but I'm sure brighter minds than mine are up to resolving them.
I'm curious about the rationale behind having five Silicon Valleys and where those locations are.
Horgan had a vision of a Silicon Valley through expanding the tech industry in Victoria which would also bring more jobs to the island. There's been some interesting innovations of apps and health care devices. Vancouver also has a couple large online platforms for different purposes (I'm not as familiar with their tech industry).
This is an important discussion. To my mind we need public investment banks to build the capacity to plan by taking equity positions in. Innovative firms. They should be at arms length from the government.
Picking winners or industries to favour has been problematic no mater where you look, maybe Singapore can be considered an exception. Maybe.
If we want to incentivize innovation, investment and ingenuity across Confederation, why not go the Estonia way and exempt companies from corporate / income tax on R&D and investment? The loss of revenue would have to come from somewhere (shareholder income distributions? Slightly higher income tax for the 1%?).
Nation-building projects (internet coverage, transportation networks, pipelines, ports, etc) should be managed by a government-owned, arms-length Crown Corporation which will own the project and once built, lease the asset to private operators to recoup the money over say 30 or 40 years. Why not?
The key for Canada is there are a number of business/investment models explored, tested and with some good data/lessons to examine and apply. Canadians can and have been innovative in a number of industries. However, it's important to keep them Canadian rather than selling them off to foreign interests. Cooperatives are also a tried/tested model. This model involves talented workers whose value is greater than just a hired-hand but instead an active decision-maker and contributor. I have been rather surprised at the number of shills for corporate welfare out in our business sector.
Good read and refreshing to see the finger pointed at the global transnational broligarchic corporate agenda(so I fleshed it out a litte. GTBCA. Meh.)
I do think that lefties think that talking about the evils of neoliberalism will get them lots of likes and invited to parties. But it is a mere effect not a cause.
At the helm and guiding the ship and virtually IS the ship is the GTBCA.
Regarding industrial policy, Carney intends to leverage big time private investment in the public sector. He's never made that a secret.
We just want him to maintain public control and ownership with strict buy in and buy out guardrails.
Right now, corporations come, take the money, stay for a short drink from the well, maybe set up shop then leave. With the money and jobs gone. No more looting Canada.
We own the means of production. We the people. We hire the government to work for us. We the people. The GTBCA will just have to wait in line.
Industrial policy vs. Corporate welfare: sorry, but I really didn't see a clear answer to that. What exactly is it about industrial policy that separates it from corporate welfare? And how does the state do anticipatory models any better than they have to date? The problem with state involvement in encouraging economic behaviour is that nobody has a crystal ball. That's why you let the market sort it out.
I suggest the state's involvement should be limited to regulation for the sake of safety and the common good. Public infrastructure is easy to support, but it's less easy sometimes to make a distinction between it and corporate welfare, as seen with the CPR saga. Ontario Hydro is another problematic example (given its debt), but I thought it was an interesting observation in Pierre Berton's book Niagara, that Ontario's public effort at building a hydro plant got the job done while NY's supposedly free market kept their efforts tied up in legal knots. Personally, I think Ontario's Hwy 407 exposes the incompetence of its Ministry of Transportation in providing comparable efficiency in getting something built rather than a solid case for privately owned highways.
Perhaps infrastructure should only be a public concern when private industry begs off on doing the job itself.
The tax code's role was touched on but I think it deserves more discussion. I believe corporate taxes can be re-jigged to incentivize investment more efficiently than currently is the case, but it would require a drastic re-think of tax policy.
The idea is this: instead of taxing corporate income, tax ONLY the capital and labour that are used in Canada. Rather than discourage absolutely both capital investment and hiring as is often argued, corporations would be encouraged to ensure that both capital investment and labour are as productive as possible in order to minimize their tax, and are only made when those investments can be justified by a market driven rate of return. The rates being equal across industries would also encourage an efficient allocation of capital and labour in the economy in general. Which is the point of the original question.
It would also increase the tax base and lower rates (all corporations have capital and labour, not all have taxable net income), an argument often used to promote consumption taxes over personal income tax. Well, that logic can apply to corporations too. For those that lose money and would now do so without seeing a tax break, well, that's management's problem, not government's.
And there’s no need to agonize over what the rates should be. Just take the total current corporate tax receipts (including payroll taxes) for the country (averaged over a few years or adjusted as seems appropriate), and divide half by the total corporate labour expense, and the other half by total corporate capital (using historical cost data) invested here, and there are your rates for each, with no advantage or disadvantage to either. Capital tax rates would be about 1.5-2%, while labour tax rates would be 10-12%, (incl. provincial portions) which seems high but not so much given that it would replace current payroll taxes.
Whether the total corporate tax take across the country is an appropriate amount in the first place compared to other taxes is a political and economic question outside the scope of this proposal. At least maintaining that level would have the advantage not being construed as either a tax hike or a tax cut, although some firms or even industries would be hit harder than others. But that's the point - it's the better run ones that would be rewarded.
This would also have the added benefit of discouraging extreme executive pay/bonuses, as these would now attract tax rather than being a tax deduction. Or at least executives would be harder pressed to justify their remuneration.
This proposal is part of a greater tax/welfare reform that would replace CPP, EI and minimum wages with a partial basic income.
And yes, a capital tax could raise arguments about measurement of capital (historical/depreciated cost vs. tax cost or current/market value) as well as potentially discouraging pure research, but I'm sure brighter minds than mine are up to resolving them.
I'm curious about the rationale behind having five Silicon Valleys and where those locations are.
Horgan had a vision of a Silicon Valley through expanding the tech industry in Victoria which would also bring more jobs to the island. There's been some interesting innovations of apps and health care devices. Vancouver also has a couple large online platforms for different purposes (I'm not as familiar with their tech industry).