Today’s Saskatoon StarPhoenix and Regina Leader-Post cover my recent analysis of PotashCorp’s annual report. I suggested that the company may be paying less corporate income tax to Saskatchewan than to Trinidad. PotashCorp could clear things up anytime by simply disclosing the amount of corporate tax it paid to the Saskatchewan government. Rather than doing so, its spokesman argues that the […]
Read moreGrowing up in Saskatchewan, I never imagined myself blogging in praise of Rick Swenson. First, blogs did not exist then. Second, I generally disagreed with Swenson, a former cabinet minister in Grant Devine’s Progressive Conservative government. Swenson is back as leader of the provincial Progressive Conservative party, whose caucus quit to join with right-wing Liberals and federal Reformers to create the […]
Read moreMultinational corporations generally provide more detail to the US Security and Exchange Commission than in their Canadian annual reports. Thank goodness for American disclosure requirements. Along with its 2010 Annual Report, PotashCorp released its Annual Report on Form 10-K (a Security and Exchange Commission filing) on Friday afternoon. The following section is on pages 14 and 15: Royalties and Certain […]
Read moreThe Potash Corporation of Saskatchewan posted its 2010 annual report yesterday. It’s always worth taking a closer look at documents released on a Friday afternoon. Those interested in public revenues should see pages 109, 110 and 111. Note 19’s breakdown of “Provincial Mining and Other Taxes†confirms something that I had suspected. PotashCorp paid zero Potash Production Tax in 2010. […]
Read moreThe comment pages of Saskatchewan’s newspapers have been abuzz with debate about potash royalties since my latest op-ed on the subject appeared in the Saskatoon StarPhoenix a couple of weeks ago. Two days later, political columnist Murray Mandryk made the case that the province should demand higher royalties rather than just accepting a few more jobs and charitable donations from the Potash […]
Read moreAdvocates of corporate tax cuts like comparing Canada to an unweighted average of Organisation for Economic Co-operation and Development members. Since the OECD keeps admitting more microscopic economies with very low corporate tax rates, this average keeps falling regardless of whether any country actually lowers its rate. Last year’s admission of Estonia, Israel and Slovenia dragged the OECD average just […]
Read moreThe Canadian Press summary of the Prime Minister’s comments raised my eyebrows, but it was not a direct quote. So, I checked the Parliament of Canada website: Right Hon. Stephen Harper (Prime Minister, CPC): There is not a single business organization, not a single credible voice in this country, that supports the tax hikes proposed by the Liberal Party. It […]
Read moreThis blog has long been critiquing Saskatchewan’s inadequate potash royalties. But every time I check the numbers, I am again shocked by how low they have fallen. In 2010, the Potash Corporation of Saskatchewan paid just a nickel in provincial royalties for every dollar of gross margin it made on potash. I have the following op-ed in today’s Saskatoon StarPhoenix: […]
Read moreThe main objection to my argument about the treasury transfer effect is that American companies do not actually repatriate their Canadian profits and pay US corporate tax on them. As The Globe reported: Jack Mintz, director of the School of Public Policy at the University of Calgary, said the unique tax status of U.S. companies is a moot point because […]
Read moreSaskatchewan’s NDP opposition recently called for higher potash royalties, a position long advocated by this blog. Not surprisingly, the Saskatchewan Party government and the potash companies have objected. The argument from Premier Brad Wall and PotashCorp CEO Bill Doyle seems to be that mine expansions are occurring in Saskatchewan only because of royalty concessions granted by the previous NDP government. […]
Read moreOver at Worthwhile Canadian Initiative (WCI), Stephen Gordon reasonably argues that economic models can be useful for policy analysis even if they lack the predictive power needed for forecasting. He writes: A well-designed model will be able to reproduce the main features of interest of the real world. More importantly, it will also be able to reproduce the main features […]
Read moreA few months ago, I tore a strip off Barrie McKenna’s column on internal trade. But today I write to praise his column on corporate taxes: U.S.-based companies . . . are taxed by the Internal Revenue Service on their global income. So any profits they don’t reinvest and try to repatriate are hit with the higher U.S. rate, not […]
Read moreToday, the Global Development and Environment Institute and the Institute for Policy Studies released the following statement signed by more than 250 economists, including a couple of Progressive Economics Forum members: Dear Secretary Clinton, Secretary Geithner, and Ambassador Kirk: We, the undersigned economists, write to alert you to important new developments in the economics literature pertaining to prudential financial regulations, […]
Read moreThe fiscal implications of corporate income tax (CIT) cuts are a key issue in the current debate. Federal cabinet ministers and Neil Reynolds have boldly asserted that lower CIT rates will increase CIT revenues. As Andrew and I have pointed out, this claim is implausible and not supported by the government’s own Department of Finance. The following table provides a closer […]
Read moreHere is the trade union statement to the World Economic Forum, which begins today: A New Reality for Workers? Statement of Labour Leaders to the World Economic Forum Davos, Switzerland, 26 – 30 January 2011
Read moreJack Mintz is out today with yet another paper applauding the federal corporate tax cut from 18% in 2010 to 15% in 2012. Revenue Fudge He claims that the revenue loss will be “relatively small†or “relatively insignificant†without actually suggesting a dollar amount (pages 3 and 20). By comparison, the Department of Finance (see Table 3.5), the opposition parties, […]
Read moreThe International Labour Organization has released its annual Global Employment Trends report. The International Trade Union Confederation’s response follows: ILO Report Shows Job Market Still in Crisis Brussels, 25 January 2011: Today’s Global Employment Trends report from the International Labour Organization (ILO) confirms that, despite improvements in many economic indicators, global unemployment remains at crisis levels.
Read moreI have to assume that this week’s Conservative road show will be called People for Corporate Tax Cuts.
Read moreAndrew Jackson has engaged perhaps the strongest theoretical argument for corporate tax cuts: that they make more new investments viable by lowering the pre-tax return needed to get over an after-tax hurdle rate of return. (Indeed, I remember the C. D. Howe Institute’s Finn Poschmann lionizing Andrew Coyne for making this argument halfway through TV Ontario’s last post-budget panel.) Imagine […]
Read moreI have reviewed Jayson Myers’ recent Canadian Manufacturers and Exporters report on corporate tax cuts, which I made public yesterday. Proponents of lower corporate taxes usually argue that these will help Canada compete with other countries in attracting internationally-mobile investment. However, as Myers admits, “over the past decade, reductions in Canada’s effective and average combined statutory corporate tax rates have […]
Read moreJayson Myers from the Canadian Manufacturers & Exporters (CME) is touting a report supposedly showing that corporate tax cuts will create 99,000 jobs. News stories indicate that it is “set for release†or “being released Wednesday morning.†I could not find the report online, so I phoned the CME. I was initially told that it would be posted around 10am […]
Read moreLast weekend, I pointed out that Neil Reynolds had misleadingly presented figures on capital-gains realizations as being capital-gains tax revenues. Tuesday’s Report on Business included the following item: Correction – January 4, 2011 U.S. capital gains tax realizations fell to 3 per cent of gross domestic product in 1987, when the rate was hiked. Incorrect information appeared in a Dec. […]
Read moreWorthwhile Canadian Initiative has presented a list of its most viewed posts from 2010. The top post is so worthwhile that it warrants further promotion. The President of the Minneapolis Federal Reserve had warned that unduly low interest rates would cause deflation. Of course, anyone with a handle on basic macroeconomics knows that the risk of leaving interest rates too […]
Read moreNeil Reynolds’ latest Globe column promotes the myth of costless tax cuts by replicating Kurt Hauser’s month-old Wall Street Journal op-ed. “Hauser’s Law†is the notion that American federal tax revenues have consistently been about 19% of GDP since World War II despite significant changes in statutory tax rates. The implication is that higher tax rates simply prompt more tax […]
Read moreDoing Business enjoys the highest circulation of any World Bank publication. It ranks countries based on the favourability of their regulations to business. It is like the Heritage Foundation’s Index of Economic Freedom and the Cato/Fraser Institute’s Economic Freedom of the World Report, but supported by the World Bank’s credibility and clout. (Notwithstanding corporate Canada’s incessant complaints about regulation, Canada […]
Read moreEarlier this month, I attended a very interesting conference on the taxation of multinational corporations. It included a case study of how SABMiller avoids paying tax in Africa. While many of the points presented are undoubtedly familiar to this blog’s readers, the conference put it all together with a clarity that I attempt to reproduce below. The Trouble with Transfer […]
Read moreThe International Labour Organization has just released its second Global Wage Report, “Wage Policies in Times of Crisis.†The International Trade Union Confederation’s press release follows: 15 December 2010 – The ITUC has welcomed the second Global Wage Report from the International Labour Organization (ILO). “Today’s report reinforces what unions around the world have been saying about the economic crisis […]
Read moreShortly before I left Canada, Canadian Business magazine contacted me for a story on productivity. It highlighted a presentation by Industry Canada economist Annette Ryan. I was struck by slide 40 (41 of 44 in the PDF): In an endogenous sunk cost model, opening free trade and intensifying competition leads to a divergence in innovation paths. Firms in the less […]
Read moreOver at Worthwhile Canadian Initiative, Stephen Gordon argues that capitalists are not rich. Of course, wealth is more or less synonymous with owning things that can be broadly defined as capital. Stephen’s argument is focused on income: “If capital income is concentrated among high earners, then it could still be argued that increasing labour’s share of income will reduce inequality.†[…]
Read moreOn Thursday, Saskatchewan Premier Brad Wall said “No†to BHP: Do we want to add PotashCorp to that list of once-proud Canadian companies that are now under foreign control? . . . It’s our government’s belief that the people of Saskatchewan deserve nothing less than a potash industry unequivocally managed, operated and marketed for the benefit of Canada and Saskatchewan. […]
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