But some businesses said the approach could worsen what the Bank of Canada’s No. 2 official last month called a productivity “emergency.” Canada numbers rate poorly thanks to weak investment in machinery, equipment and intellectual property, the bank’s senior deputy governor Carolyn Rogers said.
What a crock of shit. Want a good way to avoid paying taxes as a business? Reinvest profits back into the business via purchases of equipment (ok, you have to amortize that one over a few years), higher wages, more staff, R&D, etc. More money reinvested into these productivity-generating purchases (that are apparently in a state of emergency) means less you’re extracting from the business, and therefore less you’re paying via this new slightly-higher capital gains tax.
Want a cool side-benefit? This actual spending (rather than wealth-extraction and subsequent hoarding) will generate real economic activity which will have a compounding effect on the economy resulting in actual economic growth. The taxes generated by those who decide not to reinvest more of their profits will have a similar effect, with that added government spending stimulating the economy in its own way.
Capitalism has many faults, but while we’ve got it we could at least adhere to one of its pretty fundamental tenets that money needs to flow through the economy for it to work. Hoard too much wealth and the gears dry up, resulting in an economic downturn.
Henry Ford - despite being a total piece of shit in his own right - at least recognized the need for his workers to be able to afford to buy the product they built. Too many modern “titans of industry” seem to be forgetting that.
Source: I’m not an economist, but I do manage the finances for a small Canadian business of about 25 employees. We don’t give a shit about becoming rich - we just want to keep the lights on, live in reasonable (but not excess) comfort, pay our employees as well as our funds allow, and enable my mom (our company president) to be able to one day retire.I live in constant fear of a deep recession that I think is inevitable, but believe that actions like these new higher taxes on the rich will help stave off or mitigate. In my opinion we need much higher taxes on substantial wealth but in the meantime I’ll take this as progress.