On April 23, the Fraser Institute released the annual update of their misleading Consumer Tax Index report. The piece is meant to feed the anti-tax sentiment with numbers sprinkled liberally for their shock value instead of providing any meaningful analysis. Here are some of the main flaws with the report’s methodology.
If what follows sounds familiar, it’s because I’m drawing heavily from the analysis I did in 2010 here, here and here. All of these critiques continue to apply to the 2013 report, which is based on the exact same problematic methodology as earlier editions employed.
The Fraser Institute’s (Read more…)
Read Committee studying offshore tax evasion will not question revenue minister at The Globe and Mail.
This story comes from the USA but Canadian companies employ similar schemes of tax avoidance. In fact, most of the companies listed here have large Canadian operations. One of the reasons that companies doing business in British Columbia wanted to maintain HST is that, under that system, they avoided nearly all sales taxes.
Many had already managed to avoid income taxes through off shore affiliates and shelters but they wanted to eliminate local consumption taxes as well. The $2 billion of BC sales taxes
. . . → Read More: Northern Insight: Tax issue the Harper Gov’t prefers not to address
Former Canadian Taxpayers Federation Alberta Director Scott Hennig, now the group’s Communications VP, in a nice AstroTurf-coloured sweater at last weekend’s Ottawa conference of the Manning Centre for Undermining Democracy. Below: CTF President Troy Lanigan; CTF member … rrrrrrr … supporter, Riley Climenhaga; CTF Operations VP Shannon Morrison.
When it comes time to hand out the annual Turfy Award – named for AstroTurf, the green synthetic blades that look like grass and feel like grass but do not absorb carbon dioxide like grass – I expect the Canadian Taxpayers Federation to be a contender.
Indeed, consider ’em nominated.
. . . → Read More: Alberta Diary: Minuscule Canadian Taxpayers Federation in running for ‘Turfy Award’
By Canadians for Tax Fairness | Feb. 18, 2013: The growing use of tax havens is costing Canadians an estimated $7.8 billion annually, the executive director of Canadians for Tax Fairness has told a Parliamentary committee studying the issue. “Tax haven use is at an all-time high in Canada,” C4TF’s Dennis Howlett said in his brief to the READ MORE
A new CCPA (National) report by Marc Lee and myself argues that Canada’s tax system needs a “fairness” overhaul and presents a framework for progressive tax reform. Those of you who have been following our tax work so far will find this study a great complement to the BC Tax Options Paper.
Tax policy is an important lever for governments to tackle income inequality, which is why it is particularly important to strengthen tax fairness now, given the increased concentration of income and wealth we’re seeing in Canada. We also call for a comprehensive tax review of the entire system
. . . → Read More: The Progressive Economics Forum: Fairness by design: a framework for tax reform in Canada
Further to Toby’s comments, Miles Corak has posted an excellent commentary on the new numbers on high incomes, together with a spread sheet showing average effective tax rates by income group from the 1980s. The big story is that the average effective tax rate for the very affluent has been stable since the early 1980s as their income share has grown, and that the average effective tax rate for high income groups has fallen significantly since the early 1990s.
I posted an Economy Lab piece on this as well. While opinions will differ on what is fair, I think the
Statistics Canada’s release on the escalating incomes of the top 1 per cent gained a lot of media coverage — and also provoked some very defensive reactions by major organs of the Canadian media.
This included an almost rabid column by Financial Post editor Terence Corcoran accusing Statistics Canada of engaging in class warfare and, in a McCarthyite manner, personally attacking some of their existing and former employees. (I guess he doesn’t read the New York Times much, where that well-known communist Warren Buffett was quoted as saying “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”)
The Globe also weighed in with an editorial urging us to “Hug the 1 per cent“ claiming they get a bad rap and that they are a net benefit to Canada because they pay more than their share in income taxes. The Globe editorialists . . . → Read More: The Progressive Economics Forum: Canada’s bloated 1 per cent
This is a guest blog post written by Whitehorse-based economist, Luigi Zanasi. Please feel free to comment. Also, please note that this was written before Marc’s blog post of Jan. 14 re: BC’s carbon tax.
Towards a fair cap & trade system for GHG emissions
In the last two federal elections, the NDP quite rightly rejected the idea of a carbon tax for greenhouse gas emissions. The party did the same in the past BC election, a position that probably lost it the election because of the outraged Greens. Jack Layton and now Tom Mulcair argue for
. . . → Read More: The Progressive Economics Forum: GHG Cap & Trade
An oped of mine was published by the Vancouver Sun today:
What’s next for BC’s carbon tax?
Climate change forced its way onto the political agenda in 2012, as Hurricane Sandy ripped through the northeast United Stages just days before the election. And while action remains frustratingly slow, extreme weather disasters in the billions of dollars are making a statement that politicians can no longer ignore. The costs of our addiction to fossil fuels are starting to pile up, and we cannot afford to keep dithering.
Recent surveys show that the public is ahead of the politicians in
. . . → Read More: The Progressive Economics Forum: What’s next for BC’s carbon tax?
With less than 20 weeks before the BC election, our Liberal government continues spending tax dollars to promote themselves. It’s not the first time they aimed to influence the vote with government-paid advertising. This is from an opposition press release after the 2005 vote:
“Following revelations that the Campbell government deliberately overspent its advertising budget by $7.5 million to produce pre-election ads, NDP Leader Carole James today re-iterated her call to ban all partisan advertising by government…”
Now almost eight years later, with Clark’s Liberals in bigger trouble, the amounts have escalated. As Adrian Dix told The Tyee
. . . → Read More: Northern Insight: "Improved" PST will look much like HST
Many commentators claim BC Liberals are incompetent and ineffective. While true in ministries such as Justice and Children and Family Development, Liberals have been successful in the centerpiece of their strategic plan. Startlingly successful.
In 2001, Gordon Campbell’s platform document promised a “business environment that is second to none” and BC Liberals have consistently delivered on that objective.
My last article discussed reduction of the public share of revenues from mining and petroleum industries. In fiscal 2001, the last year of NDP rule, the province earned $2.1 billion in forest and water revenues. Eleven years later, the Liberal
. . . → Read More: Northern Insight: BC Liberals’ startling success
A paper produced for the Business Council of British Columbia in 2010 stated:
“Since 2001, British Columbia’s natural gas sector has experienced nothing short of phenomenal growth…”
Mineral production in the province has also trended upward, as demonstrated by this chart, prepared from government statistics:
Despite this, government experienced one deficit after another and taxpayer supported debt rose to incomprehensible levels. At March 2012, BC Hydro owed more than $73 billion in direct debt and future energy purchase commitments.
So, if gas production experienced “phenomenal growth” and commodity prices have been through a cycle of high prices, I
. . . → Read More: Northern Insight: Of shoes–and ships–and sealing-wax–of cabbages–and kings
Warren Buffett, the world’s third richest man, appeared on The Daily Show with Jon Stewart along with Carol Loomis, senior editor-at-large for Fortune and author of Tap Dancing to Work. A few quotes: Warren Buffett: “In the last ten years, I have… . . . → Read More: Northern Insight: Business genius talks
In July 2009, Tom Fletcher of Black Press wrote about the HST announcement, “Premier Gordon Campbell and Finance Minister Colin Hansen announced the change in Vancouver Thursday, presenting it as a revenue-neutral way to simplify the system for busines… . . . → Read More: Northern Insight: If BC Liberals lied before, can we believe them now?
Willard Mitt Romney: “…there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care… . . . → Read More: Northern Insight: The 47% watch
This September, like every year, a new group of high school graduates headed to college or university to pursue higher education. But today’s generation of students is in for a very different experience from the ones their parents had.
On campuses across the country shiny new buildings are popping up, bearing corporate logos or the names of local philanthropists. But most of these are reserved for graduate schools of business, law or medicine, so today’s undergraduate arts and science students can expect to find their classes in the older buildings, often in varying states of disrepair. There, students will be
. . . → Read More: The Progressive Economics Forum: Time to Rethink The Way We Fund Higher Education
The Minister leading up BC’s Carbon Tax Review, Kevin Falcon, may be gone – his departure came just as the deadline for submissions was closing – but the carbon tax lives on. For now. Back in 2008 when the carbon tax was announced, it was scheduled to rise from an initial level of $10 per tonne (2.3 cents at the pump for those who don’t speak fluent carbon) to $30 a tonne as of July 2012.
But the government has been silent on next steps for the carbon tax, reflecting dissent and division within the BC Liberal caucus (witness
. . . → Read More: The Progressive Economics Forum: What’s Next for BC’s Carbon Tax?
Now here is something everyone who wants to be well-informed should watch. Part of TVO’s Big Ideas series, it is a talk entitled How Did Taxes Become a Bad Word? by Alex Himelfarb, Director of the Glendon School of Public and International Affairs at York University, former Clerk of the Privy Council, and fellow blogger.
Unlike the strident and largely irrational hysterics of the right who preach salvation through tax cuts, Himelfarb offers us a carefully reasoned argument about how to achieve greater equality and the kind of society that all of us, in our better moments, hope for.
. . . → Read More: Politics and its Discontents: Why Fair Taxation Is Crucial
A growing share of Canada’s investment overseas is being channeled by Canadian banks into tax havens.
The latest Statistics Canada figures show 24% of Canadian direct investment overseas in 2011 went to the top twelve tax havens, up from 10% in 1987. In fact, tax havens of the Barbados, Cayman Islands, Ireland, Luxembourg and Bermuda were five of the top eight national destinations of total Canadian investment abroad, with the US, UK and Australia the only countries not considered tax havens in this group.
To put this in perspective, over $390 billion of Canadian “investment” has flowed into
. . . → Read More: The Progressive Economics Forum: Canadian banks use of tax havens keeps growing
The latest issue of the Canadian Tax Journal has a number of articles on Tax-Free Savings Accounts. Among the papers of interest: Kevin Milligan projects the potential tax impact of accumulated TFSA contribution room by estimating what a mature TFSA would have meant for income taxation in 2005. Even short of doubling the contribution limit to $10,000, Milligan finds a near “revolutionary” decline in the total federal tax base, leading to “an appreciably different income tax than exists today.” Maureen Donnelly and Allister Young look at the slightly-longer UK experience with Individual Savings Accounts (ISAs), a plan similar to
. . . → Read More: The Progressive Economics Forum: TFSAs: Cutting Taxes for the Affluent
Corporation That Paid Nothing In Taxes For Four Years Tells Congress It Pays Too Much In Taxes, Think Progress, July 20, 2012
“Over a four years period from 2008 to 2011, Corning Inc. was one of 26 companies that managed to avoid paying any American income taxes, even though it earned nearly $3 billion during that time. In fact, according to Citizens For Tax Justice, the company received a $4 million refund from 2008 to 2010. That didn’t stop Susan Ford, a senior executive at the company, from telling the House Ways and Means Committee this week that America’s
. . . → Read More: Northern Insight: Liars believe their own lies
While supply management is bad for our economy, the discussion around it has at least managed to supply how the majority who oppose it are intellectually dishonest.
For the Conservatives, libertarians, Liberals, and the like who are now so vocal in their opposition to supply management, a relatively minor economic program, one must wonder where were these defenders of economic principles when this government made a far more substantial and far worse economic decision, when it reduced the GST.
With artificially inflating the prices of milk and eggs it’s easy to agree with the loud and rancorous crowd who are
. . . → Read More: The Scott Ross: Opposing Supply Management & Economic Principles
Well well, another misinformed tax freedom day has come and gone on June 12th. To mark the occasion this year I wanted to skip over the very serious methodological flaws that others have pointed out, and take a look at several other items that Canadians are “free of” at various points. By gaining “freedom” from the taxes that Canadians pay we also gain “freedom” from the services those taxes pay for. I for one am all about more freedom!!
( let me point out that the back of my envelope got a good workout during these calculations
. . . → Read More: The Progressive Economics Forum: Freedom from government services day