News: Taxation

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Taxation News

Want to know what CPJ staff have been saying on taxation in Canada? 

Read the latest news and views from staff at CPJ on taxation. 

BC's regressive tax system

In 2007, CCPA-BC economist Marc Lee studied tax incidence in Canada and discovered that our tax system had become an inverted u-shape, with middle-income Canadians paying the highest proportion of their income in taxes and the richest Canadians paying the lowest proportion of their income in taxes.

Yesterday, CCPA-BC released an even more disturbing report – a study of tax incidence in BC reveals that the tax system in BC is downright regressive. Not only does the richest 20% of British Columbians pay the smallest proportion of their income in tax, but the poor pay the highest! This shift has taken place over the last decade as the province has cut income taxes (which are still modestly progressive) and increasingly relied on regressive sales taxes.

Drummond on corporate tax rates

Don Drummond had a bit of a strange op-ed in the Toronto Star on Sunday. On the one hand, he acknowledged the debate over the option of corporate tax cuts and called for the impact of cuts to be monitored so that we know whether or not they are actually delivering on their goals. On the other, he reviewed and dismissed all of the arguments against corporate tax cuts as negligible.

French presidential candidate proposes citizen's income

The Basic Income Earth Network Newsflash arrived in my mailbox this morning, and I was surprised to learn that one of the candidates pursuing the French presidency in the 2012 election is basing his campaign on a citizen’s income, also known as a Guaranteed Livable Income. And not just any candidate: former prime minister Dominique de Villepin, best known for his opposition to the Iraq war as France’s Foreign Minister in 2003.

I went to school in France for a year and a half and witnessed a historic presidential campaign up close, and I have retained a fascination with French politics ever since. The French political system is quite different than the Canadian system, with an elected President who selects the Prime Minister who may or may not be elected him/herself.

Taxes and the Common Good: Backgrounder & position paper

May 2011
CPJ’s public justice framework supports the notion that taxes are an important contribution to the common good. Taxes are one way in which we as citizens fulfill our obligation to promote justice and to respect the right of all people to live in dignity. For governments, tax policy can be used to foster justice, in addition to tax revenues paying for infrastructure that benefit all and promote an equitable society. Public justice also supports a progressive distribution of taxes, and transparent and accountable decisions from governments on taxation and spending.
 

Trickle down's complete and utter failure

The OECD released a report last week highlighting the rapid growth of inequality in Canada and other rich OECD countries. The report covers the period from the mid-1980s to the late 2000s, meaning that this rapid growth of inequality took place during a period of strong economic growth. In other words, trickle down is a complete and utter failure – it’s led to the rich getting richer, not to a rising tide that lifted all boats.

The OECD report offers several reasons for the rapid growth of inequality. Not surprisingly, distribution of salaries and wages is primarily responsible (that’s not hard to figure out when the best paid CEOs make 155 times more than the average worker). This also reflects the growing trend of precarious labour, in which nearly one-third of jobs are low paid, part-time or temporary, offering few or no benefits, and provide no job security. The OECD report identifies globalization as a driver of change in employment structure impacting wages.

Using corporate tax rates to create good corporate citizens

The debate over corporate tax rates often seems to ignore the fact that corporations receive benefits for the taxes they pay. Those who demand corporate tax cuts rarely demand lower government expenditures that favour corporations, points out Greg Lang in The Mark News this week. But while the cynic might suggest that we eliminate corporate taxes and the free services corporations receive – including free road use – Lang suggests that there is an alternative way to think about corporate taxes.

Election 2011: A good deal about taxes

Taxes offer Canadians a great deal on public services they probably couldn’t afford if they had to pay for them directly. But political parties seem to ignore these benefits to focus on tax cuts – tax cuts which have already significantly contributed to our debt.

Taxes should be seen as an investment in the shared prosperity of neighbours and a crucial way to promote the common good.

Federal budget fails to address real needs of Canadians

FOR IMMEDIATE RELEASE

Ottawa, ON: March 23, 2011 - Citizens for Public Justice (CPJ) is disappointed that the federal budget did not address the real needs of Canadians, ignoring the social and environmental deficits.“This budget offers tinkering instead of real change,” said Joe Gunn, executive director. “Instead of a poverty elimination strategy, the government is pursuing a jobs-based approach to recovery that just isn’t sufficient.”

Increasing tax fairness

The Globe and Mail has an excellent op-ed today by Peter Shawn Taylor and Ben Sand highlighting the conclusions of a Frontier Centre for Public Policy study on tax expenditures. They argue that tackling the deficit requires a good, hard look at tax expenditures.

Tax expenditures are a different form of government spending. Rather than writing a cheque, the government chooses not to collect certain tax income. The RRSP tax deduction or the Charitable Donations credit are two examples. Taylor and Sand report that “Ottawa annually gives away more than $100 billion worth of tax expenditures on personal taxes through various deductions and credits.”

Responsibility and care in Budget 2011

Last week CPJ submitted our pre-budget recommendations to the House of Commons Standing Committee on Finance for Budget 2011. Every year this committee invites Canadians to raise concerns and offer suggestions for the drafting of the next federal budget.

Our recommendations come at a time of economic recovery after the recent recession, when the government is facing challenges concerning how to invest Canadian revenues for the best possible outcome. CPJ recognizes that these decisions are not always easy. But in order to promote the well-being of all Canadians, the budget must be made up of responsible and caring investments.

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