Surge in Federal Tax Revenues
As noted in today’s Globe and Mail,Â income tax revenue growth is significantly exceding GDP growth, surprising Don Drummond of TD Bank. My guess is that current income growth is highly tilted to the very high end of the income distribution, where it is taxed at well above average rates. A quick glance at the revenue stats for the past few years bears out and updates the Saez and Veall study on the fast-rising share of the top 1%. My policy conclusion – a much stronger cas for re-directing any surplus to social programs as opposed to Flaherty’s likely budget measures.