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Archive for January, 2011

Statscan on Corporate Tax Cuts

Statscan economist Philip Cross weighs in on how trivial is the impact of cuts in the overall scheme of things, as reported in a fine story by Heather Scoffield of CP. I  agree, but fear his career will be in serious jeopardy.  Or perhaps he is on the eve of joining Munir in retirement. Minister […]

Corporate Tax Giveaway to the U.S.

A 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 […]

Songs of the Doomed

There is a lot of talk on this blog and elsewhere about how best to get the economy going again, but it seems that the environment is missing in action from the debate. At best, climate change is a concern mentioned in passing, only to move on to the real action of boosting GDP growth […]

A Call for Capital Controls

Today, 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 […]

Unions and Innovation

A useful study from Industrial Relations (65/4; Fall, 2010.).  Apparently we don’t screw things up for innovative firms. What Do Unions Do to Innovation? An Empirical Examination of the Canadian Private Sector Scott Walsworth Associate Professor and Hanlon Scholar in International Business, Edwards School of Business, University of Saskatchewan, Saskatoon, Saskatchewan, Canada walsworth@edwards.usask.ca SUMMARY This […]

The Continuing Rise of Temporary Work

I made a short presentation on the disturbing rise of temporary work last week. It seems the cutting edge of the new normal is to be found in our schools, colleges and universities. As most of us would know or strongly suspect, paid work has become more casualized or precarious over time as the standard employment […]

Corporate Tax Revenue: A Closer Look

The 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. […]

Five Economic Reasons To Say No To More Corporate Tax Cuts

This was posted on the Globe and Mail’s online feature Economy Lab today. My sincere thanks to all the people who have posted on the topic on this site. The Harper government ’s commitment to further reduce the general corporate income tax rate while the nation struggles with budgetary deficits has been championed by – […]

Still in the Hole

Labour Force Survey revisions announced in the Daily today show that total employment has still not recovered to pre recession levels. “Compared with the employment peak of October 2008, employment in December 2010 was lower by 30,000 (-0.2%) based on the revised LFS estimates. Between the employment peak of October 2008 and the recent low in July 2009, the revised LFS estimates show […]

How Corporate Tax Cuts Can Actually Destroy Jobs

Here’s a short description of the methodology I used yesterday in explaining why allocating $3 billion of federal revenue to further corporate tax cuts (instead of other more effective stimulusmeasures) would actually destroy jobs (up to 46,000) on a net basis. It’s also available on the CAW site.

Labour at the World Economic Forum

Here 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

Mintz Misleads on Corporate Taxes

Jack 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 […]

The Conservative Fiscal Record

At the five year mark, there is a lot of commentary on the Conservative record. Have they been true to their right-wing economic agenda, or shifted to the centre? I find evidence for the former argument much more convincing. The Conservative fiscal record spans the five full fiscal years, from 2006-07 to 2010-11 (which is […]

Global Employment Trends

The 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 […]

Bay Street Road Show

I have to assume that this week’s Conservative road show will be called People for Corporate Tax Cuts.

Do Corporate Tax Cuts Boost Investment Over the Hurdle?

Andrew 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 […]

Do academic journals matter any more?

I do a lot of reading and writing as part of my job. But though I work for a research policy institute, I find I have little need for academic journals, and if anything, academic journals have made themselves less and less relevant over time. It used to be the case that academic journals represented […]

Corporate Profits, Corporate Taxes and Business Investment

I have been reflecting a bit on the CME study of corporate taxes which Erin has previously covered quite comprehensively. This subject is clearly very much in political play at the moment. With the Liberals and the NDP  opposing cuts to the federal corporate income tax rate championed by the Conservatives, it merits further debate. […]

The problems with the textbook analysis of minimum wages

I’ve been thinking a lot lately about the sorry state of the BC minimum wage, stuck at $8 after nine years two months and still counting. Yes, it will likely increase very soon, now that almost all leadership candidates on both sides have expressed support for higher minimum wages, but one has got to ask […]

What Kind of Economic Recovery?

There is too much happy talk that the Great Recession is behind us. Here is my latest, rather gloomy,  piece for The Mark.

Creating Comparative Advantage

Here is an interesting piece from the Financial Times on how Chinese companies are rapidly grabbing global market share from Germany of all countries across a swath of technologically sophisticated capital goods industries, from solar, to high speed rail, to the German fortress of mechanical engineering and machine tools. Had China heeded the mainstream view […]

Billions lost through tax loopholes and preferences

Finance Canada finally published its 2010 Tax Expenditure report this morning.  This annual report provides new estimates for the revenues the federal government loses annually from different tax measures, deductions, credits, and other tax preferences.  These tax preferences also affect provincial revenues to the extent that they piggyback on the federal government’s tax base.   The […]

Housing on the knife’s edge

At long last, the federal government has decided to seriously address the housing price bubble that has increasingly concerned Canadians. On the heels of multiple warnings from the Bank of Canada that Canadians have taken on too much household debt for comfort (we hold the dubious distinction of having the worst consumer debt to financial […]

Housing Bubble Prompts New Borrowing Rules

Finance Minister Flaherty’s announcement of restrictions on mortgage lending deserves some credit (pun intended.)  But there is a bit more to this than is immediately apparent. The government has decided that, to qualify for government-backed mortgage insurance, the amortization period of a mortgage should be no more than 30 years (down from 35 years now, […]

Flaherty Misleads on Corporate Tax Cuts

It is one thing to argue (as the CME did last week) that corporate income tax cuts boost GDP via higher investment and thus generate some offsetting increase in revenues.  (See Erin’s post for a good critique.) It is quite another thing for Finance Minister Flaherty to argue that CIT rate cuts generate fully offsetting […]

Redirecting our Rage

       American economist Emmanuel Saez has painstakingly assembled a century-long statistical series on U.S. income distribution.  On two occasions, the share of income captured by the richest 1 percent reached about one-quarter of the national total.  The first time was in 1928.  The second was in 2007.  As we all know, both peaks in wealth […]

The End Of The World As We Know It (and I feel fine)

In my head I play out a narrative of salvation from the climate crisis: it’s like we are at the point in the movie when the heroes are incarcerated, the villains are running amok, and hope seems lost. Our job is to write the rest of the story, the arc that leaves us with a […]

The Bank Act Review is Coming… No Hard Questions, Please

One nice thing about Canada’s financial regulatory architecture is the provision that the bank act must be reviewed every 5 years.  This gives us all a time to take stock of the direction that bank regulation is heading.   This is the year we are due for the Bank Act review. After a couple of years of […]

Climbing Down the Value Ladder

There’s a shockingly honest and accurate article about Canada’s deteriorating trade performance in today’s Globe and Mail by Barrie McKenna. It notes that Canada’s trade balance improved dramatically in November (almost completely closing October’s $1.5 billion).  However, it cited some Bay Street economists lamenting that this was for the “wrong reasons”: namely, a sharp slowdown […]

Professors’ Salaries

Yesterday, Alex Usher blogged at the Globe and Mail’s web site about the salaries of Canadian university professors. He argues that professors in Canada are now paid better than professors in the United States. He also suggests that, in Canada, “professors are getting world-class pay without producing world-class results.” While I’ve never argued that tenured […]