Taxes - Blog

Public debate about how to deal with Canada’s $53.8 billion deficit has largely focused on spending cuts. Prime Minister Stephen Harper has explicitly ruled out the possibility of tax increases (except for an increase in EI premiums), while Liberal leader Michael Ignatieff has suggested a freeze on continued corporate tax cuts until Canada is in better fiscal shape. The New Democratic Party has consistently called for the repeal of corporate tax cuts to restore government revenue. In April, nearly three-fifths of senior executives polled said they believed some kind of tax increase would be necessary to deal with the deficit. So far, however, there hasn’t been much debate about this option in Canada.

While responding to the deficit and appropriately and sufficiently investing in social security may require a rise in several different taxes, today I want to take a closer look at corporate taxation. Read more »

As new research from CPJ demonstrates, the poor bore the brunt of the recent recession. In Canada, hundreds of thousands lost their jobs and were left at the mercy of inadequate Employment Insurance and social assistance. Globally, millions suffered from rising unemployment, deep financial uncertainty, and high food prices. Yet it was not the poor that caused the economic downturn.

The economic crisis was caused by financial activity – speculation – taking place far from the everyday lives of the poor. The banks and financial institutions and other actors involved in creating the speculation bubble have taken their bailout and moved on into recovery. The poor are still waiting for their recovery. Read more »

I always think its funny when people talk about how bad taxes are without ever referring to the fact that those taxes are actually paying for things we all rely on.

Apparently, John Stapleton thinks so too. He wrote this lovely, scathing article on a world without taxes for The Mark, highlighting all of the ways in which "individuals can spend their money better than governments." Read more »

As February comes to an end and T4s are arriving in our mailboxes, many Canadians are beginning to think about tax returns for 2009. Taxes sometimes have a negative connotation, but in terms of lessening the gap between the rich and poor, they could make the difference between living in poverty and having adequate income.

But John Stapleton from the Metcalf Foundation (as cited in the Toronto Star) says that many low income Canadians are not filing tax returns and therefore not accessing the benefits available to them. Stapleton offers multiple reasons for this, most related to a lack of access to services or a misunderstanding of how the system works. Read more »

CBC News has a great article on paying taxes, by Robert Smol. Smol points out that in business, everyone knows that the best-quality goods and services come at a cost, yet this rule doesn’t get applied to government services. Read more »

Congratulations on reaching Tax Freedom Day. According to the Fraser Institute, today’s the day that we all stop working for the government and start working for ourselves.

Finance Minister Jim Flaherty also wants you to know that he’s very proud Tax Freedom Day came three days earlier this year than last year. Three less days this year of working for the Man.

The only problem with this happy scenario is that it’s not even remotely true. Tax Freedom Day is (unsurprisingly) an anti-taxation, anti-government event that has more to do with ideology than reality. Equally unsurprisingly, it relies on some fancy work with numbers to arrive at its conclusions. Read more »

In Ontario’s provincial budget last month, the government announced its intention to harmonize the GST (5%) and PST (8%) into an HST: a Harmonized Sales Tax. While at first glance the HST appears to be a simple policy change, it in fact will have a significant impact on individuals and families, and disproportionately those with low-incomes. Read more »

CPJ believes that taxes are one way that we can contribute to the common good. But now a new study from the Canadian Centre for Policy Alternatives demonstrates that by paying taxes, we are also contributing to our own individual good.

The study, Canada’s Quiet Bargain: The benefits of public spending by Hugh Mackenzie and Richard Shillington, examines the benefits of public services paid by taxes. It finds that the average benefit received by public services is equivalent to $17,000. Read more »

CPJ has noted before that tax cuts are not good economic stimulus. Many economists agree that they provide less “bang for the buck” than direct government spending, and in this current economic climate, many people will choose to save rather than spend their tax cut money.

Today, the Canadian Centre for Policy Alternative released a report suggesting that tax cuts might be worse than that – rather than failing to provide good economic stimulus, they might actually harm the economy. Read more »

Further to my post on tax cuts last week, the Toronto Star has an excellent article by Lisa Philipps today on the breakdown of the benefits. 

Philipps notes that those earning less than $35,000 - more than 60% of tax filers and mostly women - will gain no benefit but the additional $33 a year due to the increased personal amount. Read more »