At least David Murrell at UNB has some idea of the relationship between taxation and economic growth. He says:
Our government need only give such a large tax break to exporters. Consider the many fast food outlets run by corporations – an industry which sells its product to domestic consumers. If New Brunswick still maintains its 13 per cent tax rate on large-corporation income for the fast-food industry, the sector would not suffer appreciably, since it does not “compete” with out-of-province businesses.
Consider now two New Brunswick exporters: New Brunswick’s forest industry and Ganong’s chocolates. If the provincial government reduced its corporation income tax rate from 13 to zero per cent, for these two sectors, both could reinvest some of the tax savings and be in a stronger position to compete with out-of-province exporters. And, as said, prospective exporters would consider moving operations to New Brunswick. In 2007-08, New Brunswick collected $267-million in corporate taxes. If our province still taxed companies catering to in-province “consumption” (like fast food restaurants), the province would still receive about $135-million.
He is still assuming that there is enough corporate taxes paid now that would be in the future reinvested in expansion/growth if the tax rate was cut. And the statement (echoed by the discussion paper and AIMS) that “prospective exporters would consider moving operations to New Brunswick” once again has been thrown out there like a large matzah ball with no proof or even reference to other research that proves this.
I am not sure that a company based in Michigan that puts a small manufacturing plant in New Brunswick will pay much corporate income tax in New Brunswick. My hunch is that they will pay very little as I believe corporate income tax is levied based on local markets and not local operations.