We need to get out the message beyond that a healthy business sector pays for government services
Business owners know the power of profits. Being in the black equals the ability to hire new staff, increase compensation for current staff, and invest in growing the company. Positive returns even have the side effect of companies cutting larger cheques for the army of tax collectors.
And, most importantly, profits mean the business will be around tomorrow – and so will the jobs, investments, and tax payments.
But knowledge of the power of profits seems to end there. Just flip on the nightly news, or open your daily paper to see profits under attack. May Day offered a renewed call from “Occupy” across North America…for something. The message about what they wanted wasn’t clear other than that profits are bad, and government needs to take away those profits to spend on a myriad of “Occupy” interests.
What the “Occupy” movement represents is a shocking lack of knowledge about what drives the economy – and how a private-sector strong economy benefits everyone. It’s the same force that saw the HST – and all its job creation and increased government revenues – handily rejected by voters.
Business owners have much to worry about. Whether it’s tax policies, regulations, or rezonings, federal, provincial and municipal governments have a huge impact on the bottom line. We need government to hear a different message when it comes to policy – a message that favours lower taxes and less regulation. And that message must come from more than the business community.
We need to get out the message beyond our own ranks that a healthy, thriving private-sector business community build jobs and pay for government services. And the place to start is with our own employees.
That’s why the Independent Contractors and Businesses Association of B.C. has put together its first in a series of publications designed to help spread economic literacy. Our latest Construction Monitor publication looks at the basics of business profits and the benefits they bring beyond the bottom line.
ICBA’s report lays out the important connections between profits and the public since 1980: both employment and personal incomes have risen and fallen in lockstep with corporate profits. In other words – paycheques and jobs are at risk when people look to government to grab a bigger slice of the pie for the public purse.
The Monitor is designed so it can be posted on any workplace bulletin board in the province – or emailed and shared with friends, colleagues, and workers. Its message can be taken at a glance.
We also show the impact tax reductions and increased profits had during the past three decades in Canada. Unemployment, the number of jobs, personal income, and money for public services were all tied directly to profits in the private sector.
It’s an important message that needs to be shared. You can get a copy of the report online at www.icba.ca – or you can get in touch with us at info@icba.ca if you’d like hard copies for your staff or your bulletin boards.
Profits – and all their potential – will be stripped away if the business community fails to spread the word that profits are something everyone in society wants to see. We need more and more people encouraging government to do everything it can to keep taxes low, regulation light, and profits high.
B.C.’s future and prosperity depend on it.
- post by Philip Hochstein
Print 
PDF
As a business owner I fully appreciate the need for profit. Not just profit but abundance. We do not employ without profit. We do not support roads, airports, social services and well being without profit. I am with you Philip. However what has been occurring in the financial sector since 2008 and still continues has nothing to do with business, employment, or any form of social responsibility. In fact it is the exact opposite. It is the termites bringing down the structure. This is what occupy is protesting. Incoherently yes but absolutely justified.
Your comments may be appropriate for the US financial sector but it is not fair to pin the financial crisis on the Canadian banks. Our solid financial sector was the biggest reason we weathered the financial crisis as well as we did.
“However what has been occurring in the financial sector since 2008 and still continues has nothing to do with business, employment, or any form of social responsibility. In fact it is the exact opposite. It is the termites bringing down the structure. This is what occupy is protesting. Incoherently yes but absolutely justified.”
This is exactly it. While ‘occupy’ gets blasted in the media for this and that, the actual reasons are totally justified. This house of cards is coming down, the question is just how ugly it’ll get.
“We need government to hear a different message”
Where have you been for the last 30 years? The message of deregulation and low taxes has been the only one government has been paying attention too since the 1980s.
Canada and British Columbia have both experienced significant deregulation and tax cuts. The Liberals (both Federally and Provincially) have delivered some of the biggest tax cuts in history. Corporate and capital taxes have fallen or even been eliminated.
As a result, need social services have been cut back in the name of ‘prosperity.’ Well, where is it? After more than a decade the average British Columbian still hasn’t caught up and continues to fall behind. Meanwhile, the wealthiest segments of our society continue to get wealthier at a massive rate.
After all of the cutbacks, all of the tax cuts, the argument being made is that it hasn’t been enough? When will it be enough? How many times must this mantra fail before its time to do something different?
You say Canada and BC have experienced significant deregulation, which is partially true but only in regards to giant companies. If you think starting a small business is easier and simpler now than it was 30 years ago, you’re mistaken.
What’s happening here is the larger companies use their money and influence to bribe the government into regulating their smaller competition out of business. This is not deregulation, but is pointed at and called deregulation regularly. Rather it’s regulation with exceptions for the government-chosen monopoly.
That’s one of the many reasons why the average person on the street has not experienced the benefits of economic freedom. Other factors such as the government’s devaluation of the money that they *force* us to use, government manipulation of interest rates which destroys the incentive to save while ensuring perpetual 1% credit for banks to leverage up then loan back to us at 20%, and of course tariffs and other trade barriers.
Look at it this way, if you bought an iPhone on eBay, but when it arrived it was just a picture of an iPhone, not the real deal, would you conclude that iPhones don’t work? Or would you conclude that a criminal had defrauded you?
This is not a deregulated economy, it’s a fraudulent crony-driven edge-teetering joke of an economy, and the answer is not putting more politicians and regulators up for sale so the giant monopolies can buy them up and shut down even more mom & pop type competition with “regulations.”
Hey, we actually agree on something! I agree that most government policy is driven by large companies that are trying, often successfully, to capture rents and get subsidies, and that the role of smaller and often more innovative companies is mostly given lip service.
Tax Freedom day is in late June. We’ve plenty of taxes people and we need cut a little spending. The loudest complainers need to “Get off the couch and get a job.”
Karla, considering your previous comments I have one suggestion for you:
“Silence is golden!”
I wonder, do you have a job?
@Karla Sofen
Typical, attack anyone who disagrees as someone who needs to ‘get a job.’ Classic diversionary tactic with no substance.
And ‘Tax Freedom Day’ (which FYI is actually June 6, not ‘late June’) is based on a flawed methodology to make it appear Canadians pay quite a bit more than they do.
Do you know what ‘Tax Freedom Day’ for corporations in this country is? February 1.
Listening to the tax debate in the US I have begun to wonder if a radical simplification of the tax system is possible. Could we have the same rate for all forms of income (wage, dividend, capital gains, interest) with no loopholes and could individuals and organizations be taxed at the same rate? Could we also get rid of tax exempt status for all non-profits, religions etc. This might free up some accountants and lawyers, generally clever people, to do more productive work that would help the economy to grow.
Does the threat to the profit of BC companies come from the tax burden? If so, please provide some evidence of this. I quite agree that profit is a good thing, a necessary thing, and that reinvestment of surplus cashflow is a good thing. But I have not seen that government taxation is the main, or even the major issue. Access to capital is. And for small, innovative companies, government preference for large projects with large investments is a big issue. Equally important are cities full of educated people that are excited about where they are and committed to the future. The most vibrant companies today rely on the abilities of their people. Investments in education, culture and social infrastructure have big payoofs for the private sector, especially for the most innovative companies, the ones that are creating jobs for the future. A tax rate that is too low to support these investments will destroy growth.
I think it depends on how you define “taxes”. To me, it appears that all levels of government look at businesses as the cash piñata they keep whacking until it breaks. Corporate tax rate is only one factor in the equation – disproportionate property taxes, municipal red tape, payroll burdens, WCB, etc all add up.
Before people go purple in the face, I’m not for an instance suggesting we don’t need as an example, WCB. More I am suggesting we look at “taxation” on businesses on the whole to try to find the balance and ensure those services that they do pay for are run efficiently and provide service rather than just consume funds.
There are lots of examples of over regulation and of under regulation, but I think the real problem is overly complex regulation. If you need a lawyer to understand the regulation then it was badly drafted and should not be accpetable to anyone. There is a lot to be done on simplifying regulations and realigning them to focus on outcomes. There is also a common problem of fees for specific programs getting absorbed into general revenue.
Payroll burdens are what provide a living for people. a standard employee, apart from any extended medical or pension arrangements, will cost you four percent holiday pay off the gross income, equaling two Weeks of regular pay, equal cpp contribution to what is deducted from their pay, and 1.4 times the ei that they pay, and wcb which varies based on the number of claims in your field and your businesses history of wcb claims, as well as the cost of administration. Providing a living for other people is something I think one should be proud to do, rather than view them as objects or expenses.
Hockstein and his ilk are building a country nobody would ever fight for. I’m surprised he hasn’t drowned in his gold coins swimming like scrooge McDuck. Thumbs up to rich selfish patsies. hey hey hey.