OTTAWA—Each summer the Fraser Institute announces the arrival of “tax freedom day:” the day when Canadians allegedly stop “working for the government” and start “working for themselves.” A study by Neil Brooks, released today by the Canadian Centre for Policy Alternatives, takes a closer look at Tax Freedom Day and finds that to arrive at this politically loaded and heavily-reported date the Fraser Institute’s calculations understate the income of Canadians, overstate their taxes and misuse the concept of averages.
Taxes and tax cuts
BC’s economy is a lot like a rollercoaster ride. Commodity prices for our resource exports (like energy, forest and mining products) go up and down over the years, and our economic fortunes lurch along for the ride. This is especially true in BC’s “heartlands”. While the current economic upswing masks differences, BC actually has two economies: the diversified and populous Greater Vancouver and Victoria areas, and the rest of the province, which continues to be highly vulnerable to the resource rollercoaster’s ups and downs.
This study builds on analysis originally published in Bleeding the Hinterland: A Regional Analysis of BC's Tax and Spending Cuts.
(Vancouver) Provincial taxation and spending policies have worsened the gap between BC’s two economies — the diversified Lower Mainland and Victoria areas, and the more resource-dependent ‘hinterland’ regions. Soutwestern BC received a skewed share of income tax cuts, while subsequent tax increases and spending cuts have hit harder in the regions. For most communities, the value of income tax cuts has been largely offset, or eliminated altogether, by tax increases and lost income from government downsizing.
“Canada’s Top 10% Pay 52% Of The Total Tax Bill” announced the front-page story in the Saturday Globe and Mail. Quite a sensational claim on the front page of a national newspaper. But take another look--some very peculiar conclusions are possible with the dubious use of statistics.
OTTAWA—Despite outraged business and media reaction to the NDP’s demand for rescinding a new round of corporate tax cuts in return for supporting the Liberal government’s 2005 Budget, a strong case can be made that further reductions in corporate taxes are unjustified.
In a study released today by the Canadian Centre for Policy Alternatives, economist Andrew Jackson points to the fact that corporate profits have already soared to a record high, in large part because of the substantial business tax cuts enacted in previous government Budgets.
So there is an agreement in principle between the Liberals and the NDP. In return for helping to prevent this government from falling before it can even get the 2005 Budget passed, the NDP has extracted promises of about $4.6 billion in new spending, plus a roll-back of future tax cuts for big business.
Inside this issue:
BC Budget 2005: A Missed Opportunity
Who Benefits? Revisiting BC’s Income Tax Cuts
The $150 Million Question: What Does New K-12 Funding Mean For BC’s Schools?
Is the Province Equipped to Tackle the Pine Beetle’s Long-term Impact?
BC’s Economic Recovery: The Role of Commodity Prices
(Vancouver) The Canadian Centre for Policy Alternatives has updated its analysis of who got how much from BC’s income tax cuts, and how tax increases and new costs for services are impacting different individuals and families. The analysis shows that the lion’s share of tax cuts — even after incorporating those announced in the latest provincial budget — went to higher income earners. And while everyone has taken on additional costs, the larger a person’s income, the more likely they are to have money left over.