Meet the Canadian Tax Dollar, the mascot for the Tackle Tax Havens campaign. He has been sent off to a tax haven by some wealthy individuals and large corporations in order to avoid paying taxes. He had a good time at first, but now he is homesick and wants to come home so he can do something useful, like help fund health care or education.
This is the second feature in a series of highlighting CPJ’s recommendations for the 2013 federal budget in Promoting the Common Good. Last week we explored the need for an economic recovery that includes all Canadians. This week, we discuss the need for government action to encourage the creation of high-quality jobs.
The case for corporate taxes gained some ground recently. For decades now, government and business leaders have been telling us we need to keep corporate taxes as low as possible in order to attract and retain investment, and spark new industries, research and development, and, most importantly, more jobs. We’ve run with this idea, particularly as a strategy for post-recession recovery, without giving enough consideration to whether it actually works.
“Paying taxes is a noble enterprise.”
These words spoken by Neil Brooks, professor of tax law at Osgoode Hall Law School, served as a leitmotif of the Tax Fairness Summit in Ottawa, March 29-30, organized and run by Canadians for Tax Fairness.
The federal government's announcement last week of possible reforms to the retirement income system highlights the fact that financial decisions are never just that. We must consider the social implications behind the numbers and how they reflect our values as a nation. The 2012 federal budget will soon be tabled, and Canadians have the opportunity to make their voice heard.
Federal budgets are meant to be about more than just finances; they’re to reflect our nation’s deeply-held values and priorities. Unfortunately, the House of Commons Standing Committee on Finance’s just-released pre-budget report, Staying Focused on Canadian Jobs and Growth, seems to narrowly promote the status quo. Is this what Canadians really need?
The Financial Transactions Tax (FTT) has been attracting a lot of attention lately. While the Canadian government has stated its opposition to increased taxation and decided to pursue austerity measures instead, what are the implications for the economy and common good?
To achieve a sustainable economic recovery in Canada, all Canadians need an affordable place to call home. Canada’s serious housing problem is cause to reconsider priorities for the next federal budget. Included in this budget are plans to cut corporate taxes. CPJ’s recommendation: hold the corporate tax cuts and direct funds toward affordable housing.
Does Canada benefit from attracting wealthy tax dodgers to invest in local business while enjoying the low tax rates of the “Switzerland of the North?” A story by Macleans business writer Jason Kirby this week argues that Canada should avoid the urge to tax the wealthy because these “Golden Geese” bring with them innumerable economic benefits. The article highlights how Canada’s comparatively low personal and corporate income tax rates, combined with its lack of inheritance or gift taxes, appeal to those super-rich who are tired of paying higher taxes elsewhere.
But while Macleans is singing the praises of low taxes for the high income, other business voices are sounding a message of concern about growing income inequality. In January, the Risk Report of the World Economic Forum called increasing wealth and income disparities a significant concern, linking the rising disparity to the evolution of most other global risks. Min Zhu, a special advisor to the Director of the International Monetary Fund, told the Forum’s gathering in Davos that “The increase in inequality is the most serious challenge for the world.”
Last month I participated in a press conference on behalf of Canadians for Tax Fairness, arguing for fairer taxes instead of service cuts. A reporter called me afterward and asked me if tax cuts weren’t necessary to ensure economic growth. “Oh no,” I assured him. “The Finance Department’s own calculations show that investing tax revenues in public services that Canadians need has a higher rate of economic return than tax cuts.”
My answer was true, but I nonetheless wondered later if I had in fact given the right answer. The reporter’s question assumed that economic growth was so important that we should do anything to achieve it – even lose valuable public services for the sake of cutting taxes if tax cuts were necessary to stimulate growth. My answer to him accepted this assumption.