Sunday, July 12, 2015

Sunday Morning Links

This and that for your Sunday reading.

- Adrian Morrow reports on Al Gore's explanation as to how the fight against climate change can be economically as well as environmentally beneficial, while CTV points out a new Nanos poll showing that Canadians largely agree with the view that cleaner technology can and should replace dirty fossil fuels. And Gary Mason argues that a summer of drought and wildfires should lead us to pay particularly close attention to climate change in this fall's election.

- But as per usual, the people making obscene amounts of money from environmental degradation aren't going to relinquish their publicly-subsidized profits without a fight. On that front, Justin Mikulka reports that the oil industry is now shipping even more dangerous fuels by train than the ones which blew up Lac-Megantic. And David Ball discusses the imminent reopening of the Mount Polley mine whose tailings pond failure destroyed water sources for a large surrounding area.

- Alana Semuels writes about the U.S.' first large-scale study as to how to combat homelessness - and finds that unconditional subsidies for housing tend to produce far better social outcomes than traditional and limited interventions. And Semuels also points out how community ownership can offer a needed alternative to both decay and unaffordability in urban housing.

- David Walker is the latest to highlight how hard work is no guarantee of escaping from poverty. But Rob Evans exposes how the UK has engaged in domestic espionage against the unions working to improve living conditions, rather than doing anything to fight poverty itself.

- Finally, Andrew Jackson discusses how corporate tax slashing has done little other than to ensure that rent-seekers keep more of what they were already extracting from Canada's economy:
The case for a much lower CIT rate was that higher after tax profits would boost business investment. But that has turned out to be a mirage.

Investment in machinery and equipment and in intellectual property combined is below the 2006 level in real dollar terms, and has fallen from 7.2% to 6.2% of GDP. Sluggish investment is recognized by the Bank of Canada, the IMF and the OECD to be one of Canada's key economic problems, but tax cuts have had little or no impact.
(A) cut in the tax rate is irrelevant to companies earning so-called rents or above average profits. During the resource boom, companies would have invested in the tar sands and new mines even if the CIT rate had been higher. The financial sector is also highly profitable.

Tax expert Robin Boadway, Professor Emeritus of economics at Queen's University, notes that, "to the extent that corporate taxable income constitutes rents, the need to maintain internationally competitive rates of return on capital is unaffected."

And a lot of business investment would not leave for other countries simply due to a somewhat higher corporate tax rate. Canadian banks, utilities, airlines, railways, retailers and cultural industries among others all have to operate mainly in Canada to serve the Canadian market and could not just up and pull stakes to the US or elsewhere.

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