Orange Shift Part 2

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Adam T
Orange Shift Part 2

 

Adam T

quote:


I don't know of too many corporations with 'vast pools of cash', that would be an enormous waste of resources...
Banks have them. That's why they hate capital taxes.

1.There are a tiny number of corporations that may have a lot of excess cash at any time. I understand that is why General Electric started up G.E Finance Corp. However, for most large companies, it isn't exactly 'free' money. For instance, many companies invest in order to pay off future liabilities like pensions (and, in many cases, they don't appear to be investing enough) or to replace warn out assets.

2.In the case of banks, I don't know if you're attempting to be snarky or not, but obviously the banks aren't actually the owners of the cash.

3.'Capital taxes' are badly named. Most people assume capital means money, but that is not the case. In economics, capital means all of land, equipment, buildings... In B.C, the 'corporate capital tax' would better be termed a 'corporate equity tax', as it appears to be a tax that follows this: assets - liabilities. Which leaves equity. Again, equity is not actual cash sitting somewhere in a bank.