Study
| EST. READ TIME 1 MIN.Quebecers pay more in taxes than most North Americans, high tax rates hurt overall economy
Empirical research and history provide evidence that high marginal tax rates and uncompetitive tax policies can hurt a jurisdiction’s economic performance. This is because individuals and businesses respond by working, saving, and investing less, and by not hiring or expanding their activities. High personal and corporate income tax rates can also cause workers and capital to move to other jurisdictions with lower tax rates.
Quebec’s tax system—particularly with respect to personal income taxes—is decidedly uncompetitive within Canada and more broadly North America. This has contributed to its relatively poor economic performance across a range of indicators, including one of the lowest levels of real GDP per capita growth among the ten provinces over the past ten years.
The Quebec government has recently created the Quebec Taxation Review Committee to evaluate the provincial tax system and make recommendations on how to improve its competitiveness. The recommendations are expected in advance of the 2015 budget.
If the government wants to improve Quebec’s economic prospects, it should move ahead with changes to its tax system focused on increasing its competitiveness. The province’s personal income tax rates and the income thresholds at which they apply ought to be a top priority.
Share
-
Sean Speer
-
Milagros Palacios
Director, Addington Centre for Measurement, Fraser InstituteMilagros Palacios is the Director for the Addington Centre for Measurement at the Fraser Institute. She holds a B.S. in IndustrialEngineering from the Pontifical Catholic University of Peru and a M.Sc. in Economics from the University of Concepcion, Chile. Ms. Palacios has studied public policy involving taxation, government finances, investment, productivity, labour markets, and charitable giving, for nearly 10 years. Since joining the Institute, Ms. Palacios has authored or coauthored over 70 comprehensive research studies, 70 commentaries and four books. Her recent commentaries have appeared in major Canadian newspapers such as the National Post, Toronto Sun, Windsor Star, and Vancouver Sun.… Read more Read Less… -
Feixue Ren
Feixue Ren is a former Economist at the Fraser Institute. She holds a M.A. in Economics from Lakehead University and aB.A. in Statistics from Hunan Normal University in China. She has co-authored an assortment of studies on fiscal and labour market policy issues.… Read more Read Less…
Related Topics
Related Articles
By: Jake Fuss and Grady Munro
By: Jake Fuss and Grady Munro
By: Ben Eisen and Jake Fuss
By: Jake Fuss and Alex Whalen