Canada’s government should look at taxing excess profits instead of relying on higher interest rates to bring down inflation, according to the head of the left-wing party propping up Prime Minister Justin Trudeau in parliament.
Canada’s government should look at taxing excess profits instead of relying on higher interest rates to bring down inflation, according to the head of the left-wing party propping up Prime Minister Justin Trudeau in parliament.
I don’t think it’s that simple. We definitely need to do something since we have monetary policy conflicting with our current fiscal policy. Everyone is feeling the pinch right now and something is going to give soon.
But everytime someone suggests taxing our way to success,Ii get very sceptical. This is the default Canadian response.
What is considered excess profits? Where will the proposed tax put us compared to other countries? We are doing everything we can to drive away competitiveness and innovation in this country.
From a macroeconomic perspective, lowering inflation is exactly what taxation does.
Economists were initially skeptical, but they are increasingly in agreement that so-called “seller’s inflation” (called “greedflation” by the media) is real. “Excess profits” means profits in excess of what would be expected under competitive market conditions. Here’s the economic puzzle: when costs go up, profits should go down. But the opposite is happening. There must be some market failure.
Correcting this failure doesn’t “drive away competitiveness”. Excess profits are a market failure precisely because of a lack of competition! I think what many Canadians confuse is “defending industry” and “defending competitive markets”.
Coddling uncompetitive industries is precisely how we get things like the worst telco industry in the world, and super high grocery prices. That is what actually stifles competitiveness.
Please. We’ve had low corporate taxes for years. We’ve bent over backwards to give big businesses subsidies for decades. If we’re not “competitive” it’s because we continue to insist upon giving breaks to already profitable industries, particularly to companies that are foreign owned or foreign controlled, and refuse to invest, both nationally and regionally, in our people.
We’ve been in a race to the bottom for the sake of entertaining the rich. It’s time to get off the track entirely and do something for the people, not corporate interests.
“Everyone is feeling the pinch right now and something is going to give soon.”
Not the people who would be “hurt” by such policy tho
Grifters never pay their share, such is the regime we live under