🚀 go-pugleaf

Stuart Croall (umcroall@cc.umanitoba.ca) wrote:
: Obviously our low tax rates haven't help us in attracting a significant 
: amount of employment opportunities for Canadians.  I think that stuff 
: about the Royal Bank is probably bullshit, but I don't have the energy to 
: check.  I do know that in 1992 there were literally hundreds of companies 
: in Canada that paid NO TAXES and received TAX CREDITS from the 
: government.  I'm sorry, but I've misplaced the sheet that had these stats 
: on them, but I'll look them up and post them later.  Of course you're 
: going to say companies need a 2:1 ratio of profits to assets or whatever, 
: but I can possibly immagine why.  Could your voodo economics ass please 
: explain.  It's fine to tell me this, but it makes not common sense 
: without a little clarification for us "ignorant" folks.

	Yes, I agree that many companies do not pay taxes when they should.  It's 
just that a small few are giving a bad rap to big business (which I'm 
trying to change)

	Why should a company try to stand by that 2:1 ratio?  To survive. 
I'll bring it down to the bare bones....  1:1 is breaking even.  2:1 is 
good because investment is needed.  The dollars made with a 2:1 ratio is 
used for expansion, research and development, and to protect the company 
from contingent liabilities.  Without a cash reserve a company is 
worthless.  Take a look at Exxon.  After that terrible oil spill by a 
drunk captain, they faced $200M (or maybe $200B, i forget) in damages in 
one trial alone.  Without the cash to protect a company from such a 
liability (that could happen at any time), it would become bankrupt when 
it happened. 
	On the other end of a scale, if a company has more than a 2:1 
ratio, then something is also wrong.  They have literally too much cash 
sitting around for their own good, which they could be re-investing in 
thier company (ie. R&D, expansion) to keep a leg up on their 
competeitors - who are probably doing the same thing...

: At least I know who you don't vote for now.  I'll remember not to bother 
: pitching you when I go out campaigning in a few years...

	I think you mentioned earlier that you're NDP....  Send me one of 
those pamphlets (I'll give you my home adress as long as you can promise 
not to send a letter bomb ;-) ).  I may not vote for them, but my parents 
do, they'll appreciate it.

-- 
Mike Steele			| St. Catharines -- Canada's Canal City
msteele@freenet.niagara.com	|              Go Leafs!