Montreal, November 11, 2004 – An Economic Note published today by the Montreal Economic Institute (MEI) concludes that a flat rate for personal income taxes would be fairer and more efficient than the current progressive tax system. Nearly half of the Quebec population would support such a reform.
“A flat tax is not only justified from the standpoint of fairness but also avoids penalizing productive effort and wealth creation, as a progressive system does,” wrote Maxime Bernier, author of the Note.
Titled Why a flat tax would be fairer and more efficient, the document asserts that progressive rates are arbitrary rather than objective and discourage individuals from earning more by imposing a tax burden that increases the more they work.
The author cites several studies showing that American states with high marginal tax rates have lower growth rates.
Flat taxes around the world
Mr. Bernier notes that Alberta and several American states (Colorado, Illinois, Indiana, Massachusetts, Michigan and Pennsylvania) have already adopted flat taxes, as well as Eastern European countries such as Estonia, Latvia, Lithuania, Russia, Serbia, Slovakia and the Ukraine.
Half of Quebec agrees
In Quebec, a Leger Marketing survey carried out in October on behalf of the MEI found that 46% of Quebecers believe the Quebec government should adopt a flat-rate personal income tax.
“Already, nearly half of the Quebec population supports the idea even though it has never been given a vigorous public hearing,” said Mr. Bernier.
Among respondents who expressed support for a flat tax, Léger Marketing observed stronger proportions among those who intend to vote for the Action démocratique du Québec (54%) and the Liberal Party (52%). But a strong proportion of voters who support the Parti québécois (43%) are also in favour of introducing a flat tax.
Me Maxime Bernier is vice-president of a major insurance company and author of the book Pour un taux unique d’imposition published in 2003 by Éditions Varia. The Economic Note and Leger Marketing poll were sent to all Members of the National Assembly. Both documents are available on this site.
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