John Smith wrote on Feb 7^th, 2016 at 10:10am:


Sorry, but that's not what you wrote. You indicated that over thirty years corporate profits have improved 100 fold.

By the way, ROI is heavily linked to profit. Generally, no profit = no dividend, small profit = small dividend and large profit = large dividend. They may not correlate perfectly year on year but they do over time.

It may be construed that ROI is down if there are more shareholders holding smaller comparative stocks but the average price to earnings ratio does not support this.




This is obviously only applicable to listed companies as no data exists for private entities. It is safe to say that corporate tax take is progressively up despite reductions in the tax rate because there are more companies. That can't be such a bad thing.

stunspore wrote on Feb 7^th, 2016 at 10:39am:


Not offended just mildly annoyed. Your remark was uncalled for. I've not made disparaging remarks about you.

I actually find it astonishing that you can say I have my head in the sand when nothing I have written has been challenged on it's merits. Instead, the responses are along the lines of "Your graph is crap" with absolutely no supporting reasoning. At least I have produced links to the sources of what the essence of my claims are. They are all from reputable, scholarly sources including our own treasury.

I don't know your values so can't comment on any common ground. Suffice to say that I have attempted to demonstrate that the high levels of corporate tax ( compared to the rest of the developed world ) are felt to a greater extent by the actual employee than by the shareholder. It seems lost on some here that the concern is not only for economic growth but also not at the expense of hurting the workers. I have linked quite a deal of supporting study in this area. In return, nothing but jibes and comics. So far, nobody has been able to successfully challenge what I have written.

stunspore wrote on Feb 8^th, 2016 at 6:29am:


No, that falls into the category of wishful thinking.

Sustained real wages growth is a consequence of productivity gains. In turn, labour productivity gains are the result of incremental improvements in technology over time to capital stock.

If you ask me whether I thought that companies would enhance production due to higher capital to labour ratios brought about by tax cuts, the answer would be a resounding yes. This is the primary reason why the suppliers of labour have much to gain.

Productivity growth of 3.5% translates to a doubling of real wages every twenty years while a 1.5% growth translates to a doubling of wages every 50 years.

The cited studies show a 1/3 to 2/3 split between capital and labour.

Redmond Neck wrote on Feb 7^th, 2016 at 10:47am:


I agree

http://www.theguardian.com/business/grogonomics/2016/feb/08/were-spending-less-t...

Hmmm if spending is less, then with GST not much revenue growth - more discretionary spending would fall.  Ofc if business taxes and income taxes leads to reduced prices and more spending power - it might adjust for this.  If consumers have the confidence for it.

Generally though unlike the introduction of GST - prices will rise rather than a few goods fall (since GST replaced higher taxed products).  A pricing signal like that will make spending harder hence tax collection not simply "5% more".

If prices fall, this may trigger deflation making spending less attractive - you might decide to hold off purchase because you perceive prices might keep falling - although unlikely for long since the increase is once off -> but who knows the cumulative effects are.

Messy business.