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It’s time for an adult discussion about HST/GST
Friday, September 16th, 2011
September 16, 2011
It is long past time that the NDP – and Canadian progressives in general – made their peace with the GST/HST and appreciated its potential for reducing poverty and inequality… Concerns about the regressive nature of the GST/HST can be addressed by improving the system of credits that compensate low-income households. Indeed, research suggests that the most effective way of reducing poverty and inequality is – surprisingly enough – to provide low-income households with more money. The GST/HST tax credit can be used as a basis for an even more ambitious system of transfers at almost no additional administrative cost.
Tags: budget, economy, featured, ideology, standard of living, tax
Posted in Governance Debates | 1 Comment »
Forget what Tories say, Ottawa has structural deficit
Tuesday, June 7th, 2011
June 7, 2011
… the federal government is running a structural deficit that will not go away on its own when the economy fully recovers from the recession… the beginning of the federal government’s slide into deficit in early 2008 coincides with the cut in the GST rate from 6 per cent to 5 per cent… the Conservatives inherited a structural balance of approximately zero when they came to power in 2006: the structural surplus of the Chrétien years had been distributed to the provinces when the Martin government increased the Canada Health Transfer.
Tags: budget, economy, tax
Posted in Governance Debates | No Comments »
How sensible tax policy gets mired in politics
Monday, April 25th, 2011
April 25, 2011
The GST cut was almost certainly a mistake, but no opposition party has challenged this decision in the election campaign… the losses associated with the GST cuts are on the order of $12-billion to $14-billon, while those of the CIT cuts are around $2-billion. Moreover, corporate income taxes are a rickety foundation upon which to build social democracies: all the countries that have pulled off the trick of supporting high levels of social spending without sacrificing economic growth have learned that theoptimal tax mix relies less on corporate taxes and more on consumption taxes such as the GST.
Tags: economy, globalization, ideology, standard of living, tax
Posted in Governance Debates | No Comments »
Does hike in minimum wage cut poverty? Findings say no
Friday, March 18th, 2011
March 18, 2011
Discussions about the effects of increasing the minimum wage are usually dominated by its possible effects on employment. But an unspoken assumption underlying the debate is that increasing the minimum wage does in fact reduce poverty. This assumption turns out to be at odds with the evidence… two recent empirical studies – one for Ontario, another for Quebec – show that the intersection between those who earn minimum wage and those who are in low-income households is surprisingly small.
Tags: economy, ideology, poverty, standard of living
Posted in Policy Context | No Comments »
Ottawa’s GST cut a mistake
Wednesday, March 16th, 2011
March 16, 2011
It’s getting harder and harder to view the Conservative government’s cuts to the GST as anything other than a mistake. When the idea was first raised, economists were unanimous in their criticism: even if you were in favour of lower taxes and a smaller government, the GST would have been the very last item on the agenda. Cutting other taxes – most notably corporate and perhaps personal income taxes – would have produced efficiency gains and increased incomes. The GST was and is the federal tax that is least harmful to economic growth, and should have been left alone.
Tags: budget, economy, ideology, tax
Posted in Governance Debates | No Comments »
Tax hikes or lower transfers Ottawa’s only deficit solutions
Monday, February 28th, 2011
February 28, 2011
When expressed as a share of GDP – which is the proper measure – the federal governments of Paul Martin and Stephen Harper are smaller than the one presided by John Diefenbaker… the Public Accounts of Canada reveals that the business of the federal government consists largely of sending cheques to individuals (the elderly, the unemployed, etc), to other levels of government (the Canada Health Transfer, equalization payments, etc) and to federal government bondholders (debt service payments)… A realistic deficit-reduction strategy has to involve higher taxes and/or lower transfer payments.
Tags: budget, economy, ideology, tax
Posted in Governance Policy Context | No Comments »
Memo to Ottawa: Take jobs out of corporate tax debate
Monday, January 31st, 2011
January 31, 2011
There is considerable evidence showing that lower CIT rates increase investment and output. And available evidence also shows that reducing corporate taxesincreases wages. But there doesn’t seem to be much evidence showing that CIT rates affect employment one way or the other. People who expect the CIT cut to have a measurable effect on employment are likely to be disappointed… Employment is an important dimension for policy evaluation, but it is not the only one. Corporate tax policy isn’t about jobs, and it is a mistake to conduct the policy debate as if it were.
Tags: economy, ideology, tax
Posted in Debates | 2 Comments »
Flaherty’s choice
Monday, January 10th, 2011
January 10, 2011
A two-year stimulus package was introduced in 2009, which meant that the 2010 budget didn’t have much to say… The story in 2010Q2-2010Q3 isn’t one of Canada lagging behind so much as the other G7 countries catching up… So should we embark on a round of austerity to deal with the deficit? Well, no: the recovery isn’t really complete. Yes, total employment has recovered its pre-recession peak, but important series such as full-time employment, private-sector employment and hours worked have not.
Tags: budget, economy, ideology
Posted in Policy Context | No Comments »
Why libertarians can’t possibly support the census decision
Tuesday, August 10th, 2010
August 9, 2010
Yes, there are several examples of countries – especially in Scandinavia – that have abandoned the traditional census. These countries maintain databases that keep track of all interactions between the citizen and the State, so a census is simply redundant… If you’re concerned about issues such as privacy and state coercion, these are not counter-examples that you should be citing… It should now be clear that the sweaty-palmed fanboy libertarians who jumped on the anti-census bandwagon are being played like a cheap vuvezela.
Tags: ideology, participation, rights
Posted in Governance Debates | No Comments »
When it comes to the census, markets fail
Wednesday, July 21st, 2010
July 21, 2010
… of all the publicy-provided services that small-government advocates could target, the census is very near the bottom of the list of priorities. Many of the services provided by governments could and perhaps should be produced by the private sector. But the economics of databases such as the census aren’t the same as the goods that inhabit most economic models… When it comes to things like the census, markets fail.
Tags: participation, rights
Posted in Governance Debates | No Comments »
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