Finance Canada published its annual Tax Expenditure Report for 2011 and it shows that the cost of some of the most inequitable tax preferences and loopholes continues to rise. For instance the stock option deduction, which allows CEOs and executives to pay tax at half the rate of ordinary working income, is estimated to cost the federal government $725 million last year. […]
Read moreDecember marked the three-year anniversary of Ontario’s Poverty Reduction Strategy. While I believe there is much to celebrate, much remains to be done. The Strategy surprised a lot of observers, especially in light of the fact that it was announced in December 2008, just as Ontario was entering a recession. Its focus was almost exclusively child poverty, and at full […]
Read moreAmidst the plethora of media reports on “payroll tax” increases for 2012, there was little mention of increases in benefits. For example, the Toronto Sun,cued by the Canadian Taxpayers Federation, reported: If you feel a hand grabbing at your wallet next week, calling the cops won’t do any good because it’s the federal government picking your pocket. It’s that time […]
Read moreFollowing recent dismal reports on rising unemployment, stagnant GDP growth, and a deteriorating economic outlook, we can only hope federal Finance minister Jim Flaherty will provide some Christmas cheer with changes “to better promote job creation and economic growth†(as he’s  asked for advice on through his pre-budget consultations). Unfortunately, Santa Flaherty seems to have got his Christmas list all […]
Read moreThe following also appears in The Globe and Mail’s Economy Lab: Earlier this week, Kevin Milligan questioned proposals to increase the tax on capital gains. Currently, Canadian income tax applies to only 50 per cent of capital gains. Milligan argues that light personal taxation is justified for income that has already been subject to corporate tax. He quickly expands the […]
Read moreAs Christmas presents go, this one was a shocker: Over lunch on Monday, cash-strapped Finance Minister Jim Flaherty promised provincial and territorial finance ministers he’d increase federal funding for health care by six per cent each year for the next five years.  No strings attached. No negotiations. A done deal. With a catch. The provinces and territories have five years […]
Read moreFollowing concern expressed by the IMF, the Conference Board and of course thousands of protesters around the world, the OECD has just released an extensive 400 page report on the problem of growing inequality: Divided We Stand: Why Inequality Keeps on Rising. I haven’t read through it yet, and it also has quite a lot of other information for downloading […]
Read moreThis new study from Education International looks interesting. “This EI study follows on from a previous study published in March 2010 by Global Financial Integrity, a research and advocacy organisation promoting transparency in the international financial system, estimating that current total deposits just by non-residents in offshore and secrecy jurisdictions were close to US$10 trillion. The US, the UK and […]
Read moreIn a week when business lobby groups are appearing before the House of Commons Committee on Finance and calling for more tax breaks, the federal R&D Panel appointed a year ago released a very good report saying Canada’s very generous system of R&D tax incentives haven’t been effective and what we need instead are more direct grants to spur innovation. Not only […]
Read moreThis is not the stuff of usual protests. Over the past month, a little idea from a Vancouver outfit has mushroomed into a cross-continent movement. Occupy Wall Street, kicked off by Adbusters in July and coming to Toronto this weekend, has already spread to 70 American cities and is going global as protestors challenge society to rethink how the economy […]
Read moreI rarely give thanks for Neil Reynolds, but today’s column is a must-read. The point is that taxing large inheritances should appeal not only to those of us concerned about highly unequal outcomes, but also to those simply concerned about equality of opportunity. It may or may not be possible to justify inequalities based on differences in effort, skill, intelligence, etc. […]
Read moreOver at the Globe and Mail Economy Lab our friend Stephen Gordon argues that there are only limited revenues to be gained by taxing the rich. He plays around with some back of the envelope calculations based on CRA data on the incomes of those making more than $500,000 – accurately enough, I think -Â and concludes that each percentage […]
Read morePollsters tell us that Ontario’s New Democrats may double their seat total in next month’s provincial election. It’s also entirely conceivable that they could be part of a coalition government at Queen’s Park. But what’s actually in the party’s election platform? One central feature of the NDP’s proposals is to implement a tax credit for companies that hire new workers. The tax credits would be valued at […]
Read moreBesides the carbon tax, one of the most important BC government climate action initiatives has been the adoption of Carbon Neutral Government. That is, count emissions from public buildings and travel, reduce them as much as possible and pay for carbon offsets to negate the rest. As of the 2010 calendar year, the BC government announced mission accomplished, at the […]
Read moreDown south, the Obama administration is in a dangerous game of chicken with Republican congressional leaders, who are cynically holding the US economy hostage in order to impose a radical agenda of spending cuts. Obama has seemingly bought into the rhetoric of cutting debt, rather than focusing on the real US problem of unemployment. Yet, even his foolish offer to […]
Read moreStatscan have produced interesting and important new estimates of the upper bound size of the “underground” or “non observed” economy, putting it at a seemingly modest 2.2% of GDP in 2008. (Some of this is already included in GDP which is adjusted to take into account some hidden and unreported economic activity.) The 2.2% estimate shows that we are a […]
Read moreWith much of the talk on taxes in BC about the HST, we issued a new report today that looks at the bigger context for BC’s tax system (Vancouver Sun oped here, CTV News story here). Iglika Ivanova, Seth Klein and I compare and contrast BC’s tax system after a decade where tax cuts were touted as the solution to […]
Read moreUniversity of Sherbrooke economist and fiscal specialist Luc Godbout with Suzie St-Cerny and Michaël Robert-Angers has just published a timely research paper evaluating the net fiscal impact on households of Québec’s income tax system.Timely because, as discussed here be Armine Yalnizyan recent data from stats can shows that though globally income inequality has risen during the last recession, they have […]
Read moreWas it worth the wait? Hardly.  Today’s federal budget is about as appetizing as two month-old pizza warmed up in the microwave. I guess they deserve high marks for consistency, though not for economic policy or a long list of other things. The Harper government’s June Budget is almost entirely a reprinted version of the budget they tabled two and […]
Read moreDoug Saunders, of the Globe and Mail, has gamely launched a real and meaningful discussion about corporate tax cuts on these pages. See the comments section of this post. Since that forum was getting unwieldly, I’m starting a new post. Doug’s stated pursuit (and mine, and I wager most readers’) – how to harness growth to maximize social welfare – […]
Read moreThere’s a disturbing trend buried in this morning’s report by Statscan on Canada’s foreign direct investment (FDI) abroad. Not only is an increasing share of Canadian direct investment abroad going through finance and insurance industries, but a growing share is also being funnelled into tax havens. The finance and insurance now accounts for over 52% of all Canadian direct investment abroad, a total of […]
Read moreA new progressive, grassroots tax fairness advocacy organization has just been established in Canada–and its first initiative is a petition and campaign to stop additional corporate tax cuts.  The text is below.  If you are in agreement, please sign on and pass this on to your contacts. We, the undersigned, oppose additional corporate tax cuts which will give billions of dollars […]
Read moreA shorter version of this analysis was published today in the Globe and Mail’s online business feature Economy Lab. Stephen Harper has unveiled yet another plank in a platform that seems remarkably out of touch with the concerns of an electorate walking on post-recession eggshells. His latest proposal would double the contribution limit to the Tax Free Savings Account (TSFA) […]
Read moreIn response to some recent PEF commentary (now in the mainstream media thanks to today’s Globe article) on corporations in Canada hoarding cash (after-tax profits greater than new investment), PEF member Eric Pineault weighs in with some more detailed analysis: The great corporate cash stash Eric Pineault As we debate the merits and uses of a corporate tax cut, corporations […]
Read moreFirst of all, today’s top Globe story on corporate income tax cuts not leading to increased investment is a nice example of “you heard it here first”, so a big pat on the back to Relentlessly Progressive Economics. As we like to say: tomorrow’s conventional wisdom, today. I want to take issue with Stephen Gordon’s response, an effort to torture […]
Read moreToday the CCPA released a study that I authored which examines and debunks one of the biggest contentions of this campaign, that corporate tax cuts create jobs. The payoff of corporate tax cuts has come under increasing scrutiny from various angles, although I focus specifically on job creation. To examine this contention, I took Canada’s biggest public companies, those on […]
Read moreCanada’s economic context at the time of Election 2011 is one of “precarious recovery”, and overall demand conditions are weakened by a few major factors. Unemployment is still just under 8%, which is good compared to the double-digit unemployment of the early 1990s, but not great compared to the expansions of the late 1990s and 2000s. Too much of the […]
Read moreI did my taxes yesterday and once again was surprised to see how low my family’s income taxes have gone. In 2010, my wife and I paid a combined 13.7% of our income in federal and provincial income tax. Canadian modesty does not permit me to disclose the exact amount of income, but it was under six figures, and about […]
Read moreI recently posted on the CCPA’s “Making it Count†blog covering election 2011 issues. In that post, I calculated the distributional impacts of the “Family Tax Cut†proposed by the Conservatives that would allow couples with children under 18yrs old to split up to $50,000 of their income. The “Making it Count†post is meant for popular consumption, but I […]
Read moreThe 2011 federal budget was clearly designed to fail and provoke an election. It only went part way to meet some of the opposition parties’ priorities while also showering the country with dozens of different politically opportunistic relatively minor spending measures, extensions of expiring programs and boutique tax cuts.  Quite appropriately, it became D.O.A.–and now we’ll soon be into an election. What’s concerning […]
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