As Andrew Jackson has written recently on this blog, the New Brunswick government is proposing a set of truly dreadful tax reforms. The proposals include: a 10% flat tax for personal income, or a two-tier rate at 9% and 12% reducing the corporate income tax from 13% down to as low as 5% a carbon tax increasing the provincial sales tax by […]
Read moreRoutledge has just published a book comparing Australian, Canadian, and Mexican experiences of free trade with the United States. There are three chapters on each country examining long-run socioeconomic development prior to free trade, the specific free trade deals, and future policy alternatives. I wrote the Canadian chapter on the Canada-US Free Trade Agreement and NAFTA. A “pre-print” version follows. […]
Read moreAfter weeks of speculation, Stephane Dion has tabled the Liberals’ carbon tax plan, dubbed The Green Shift. The plan seems heavily influenced by both BC’s carbon tax and the Mintz/Olewiler plan released in April. Tax revenues, which reach $15 billion by year four, are fully recycled into PIT and CIT cuts plus some low income measures. The tax starts at […]
Read moreIn a new report released today for Sustainable Prosperity (a new research institute), Jack Mintz and Nancy Olewiler pitch a federal carbon tax constructed by broadening the base of the federal excise tax (which currently raises over $5 billion per year based on a tax of 10 cents per litre of gas and 4 cents per liter of diesel) to […]
Read moreExcellent analysis by Marc and Andrew leaves me with relatively little to add. The Steelworkers and NDP made many of the same points. Budget 2008’s minor new investments in public programs will amount to only one-sixth the value of recent corporate tax cuts during the next fiscal year. Budget 2008 (Table 1.1, page 10) proposes $1.4 billion of new spending […]
Read moreThree weeks ago, I wrote, “Budget 2007 used the federal spending power quite aggressively to pay provincial governments to eliminate their Corporate Capital Taxes. A similar use of the power will be needed if the Conservatives are serious about harmonizing provincial sales taxes with the GST.” The front page of Friday’s National Post reported, “The Conservatives will encourage the five […]
Read moreIn successfully seeking the 1980 Republican nomination for President, Ronald Reagan embraced the Laffer Curve theory that tax cuts would increase tax revenues. At the time, rival candidate George Bush Sr. derided this notion as “Voodoo economics” and it has been since been discredited many times. Jack Mintz struggles to revive the theory in today’s 2007 Tax Competitiveness Report, declaring […]
Read moreOn Monday, Ontario’s Institute for Competitiveness and Prosperity released a paper entitled, Prosperity, Inequality, and Poverty. As Andrew Sharpe pointed out in a review of Jack Mintz’s book, free-market “policy entrepreneurs” often completely ignore the distributional consequences of their recommendations. The Institute deserves credit for trying to grapple with distributional issues (and also for quoting Sharpe extensively). The Institute observes […]
Read moreAs noted yesterday, Canadian advocates of corporate-tax cuts have proliferated alternative measures of corporate taxes. The C. D. Howe Institute’s “Tax Competitiveness Program,” which largely consists of papers by Jack Mintz and Duanjie Chen, has focused almost exclusively on marginal effective tax rates (METRs) on capital, expressed as percentages of pre-tax rates of return. There have been a couple of […]
Read moreProgressives often present corporate-tax cuts as having transferred billions of dollars from the Canadian government to big business. This characterization is largely correct, but neglects the fact that many foreign-based corporations operating in Canada are also taxed on a worldwide basis by foreign governments. To the extent that corporations in Canada are affiliates of American and Japanese multinationals, Canadian corporate-tax […]
Read moreRecently, CLC President Ken Georgetti sent the following letter to Jim Flaherty: May 8, 2007 Honourable Jim Flaherty, P.C., M.P. Minister of Finance House of Commons Ottawa, ON K1A 0A6 Dear Minister: On behalf of the Canadian Labour Congress (CLC), I write to express our support for your promise, in Budget 2007, to end the corporate-tax deduction for interest on […]
Read moreA rather strange – not to say bizzarre – hypothesis on the Conservative decision to restrict income trusts was put forward today (March 31) by Green Party Leader and ostensible progressive, Elizabeth May. Speaking to the Council of Canadians Integrate this! conference on the “deep integration” Security and Prosperity Partnership with the US, May said she found allegations of revenue […]
Read moreYesterday, Finance Canada released “Tax Expenditures and Evaluations 2006.” The tax-expenditure figures confirm Andrew’s suggestion that the partial inclusion of capital gains now costs the federal government about $3 billion per year of forgone personal taxes: the 2006 projection is $3.1 billion. This partial inclusion cost an additional $3.4 billion of forgone corporate taxes that year. By comparison, the research-and-development […]
Read moreThis is bad news indeed. Right-wingers are no strangers to the hallowed halls of the Department of Finance (Jack Mintz held this position in the past before heading off to the CD Howe Institute), but for my money Crowley is much more a Fraser Institute clone right-wing ideologue than credible professional economist. He has been a strong opponent of minimum […]
Read moreThe dust has now settled on the Tories’ decision to tax income trusts. The government deserves credit for dealing with this issue even though they had promised to do otherwise. While there is some fury on Bay Street and among some retirees, the reality is that the government and corporate Canada were playing a game of chicken, and at some […]
Read moreThe Conservatives are at it again. As reported in the Globe and Mail on October 31, federal Finance Minister Flaherty is reviving and polishing-up the Conservative Party’s ill-conceived election proposal to end taxation of individual capital gains if the proceeds are re-invested. Light taxation of capital gains compared to wages is undoubtedly a gift to the rich. In the 2003 […]
Read moreThe push for “competitiveness” is often framed around differences in corporate taxation. Our tax rates, it is argued, must be equivalent to or less than those of our competitors so that we can attract the investment we need to increase our standard of living. There is some truth to that in that if our taxes were way out of line […]
Read moreJust weeks ago it was Telus that was the biggest ever conversion to an income trust. Now BCE jumps to the top. This mania for income trusts has me wondering how the rash of conversions from corporate entities to income trusts can make good economic sense. Income trusts are clearly a vehicle by which corporate taxes can be avoided, that […]
Read moreThe Howe released today yet another study on marginal effective tax rates on business (METRs) by Jack Mintz today, this time calculating METRs for many countries. http://www.cdhowe.org/pdf/ebrief_34.pdf The CD Howe’s METR findings and methodology seem to be taken at face-value almost universally these days eg cited by the Department of Finance and the latest OECD Economic Review of Canada. Yet […]
Read more