Taxation

The economic costs of the capital tax

Imposing a direct tax on a factor of production such as capital is a way of taxing the very process of production and wealth creation instead of taxing individual income or consumption. This involves substantial costs in terms of economic efficiency, and it harms the competitiveness of Canada and Quebec.

Le Point de l’IEDM sur les excédents budgétaires fédéraux

Le ministre canadien des Finances Ralph Goodale annonçait la semaine dernière que l’excédent budgétaire fédéral pour 2004-2005, que le gouvernement prévoyait être de 4 milliards de dollars, atteindra 9 milliards, soit le même montant que l’année précédente. Le ministre prévoit affecter une partie de ce montant au remboursement de la dette et le reste à de nouvelles dépenses, comme le réclament de nombreux groupes de pression. L’IEDM rappelle pour sa part qu’une baisse des impôts comporterait des avantages beaucoup plus significatifs pour l’économie canadienne.

Why a flat tax would be fairer and more efficient

A widespread myth holds that our personal income tax system with its progressive marginal rates is meant to embody values of fairness, justice and "social solidarity." Supporters of this system argue that tax rates should rise with income as a way of creating a more even "level of sacrifice" among citizens. It is possible, however, to show solidarity in taxation without relying on progressive rates. Social solidarity can also be financed through a flat rate tax system in which, lest we forget, higher-income individuals would continue to pay more in taxes in absolute terms.

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