High and increasing personal income tax rates discourage people from working, saving, investing, and being entrepreneurial—activities that form the basis of a thriving economy.
canadian income tax
The federal Liberals delivered their Throne Speech last week, emphasizing the planned middle-class tax cut. Yet there are two major problems with the government's proposed tax reform.
Tax hikes—particularly on upper earners—tend to bring in less revenue for governments than expected because people change their behaviour in ways that reduce the impact of the tax hikes on their tax bill.
Earlier this month, Bill Morneau, the former chair of the C.D. Howe Institute, was appointed Canada’s minister of finance.
The appointment of Bill Morneau as minister of finance is particularly interesting because of his involvement in the world of public policy think-tanks. In recent years, the Fraser Institute and the C.D. Howe Institute (where Mr. Morneau recently served as Chair) have both produced important research that provides insights that can help guide the policy decisions of the new finance minister on a number of different files. This series of blog posts will highlight a number of key policy areas where Mr. Morneau’s think-tank experience can be especially useful.
Prime Minister Trudeau's letter to Finance Minister Bill Morneau lists 27 priorities—we offer a quick reaction to 13 of these priorities.
There are clear parallels between the campaigns and governing approaches of President Obama and the Trudeau Liberals.
Raising tax rates increases revenues at lower tax rates—but as rates rise, a work disincentive effect kicks in, as well as a stronger tax-planning incentive that erodes revenues.
Deficits and debt, uncompetitive personal income tax rates, and the decline in business start-ups.