Category Tax policy
Lloyd George and Avatar
I haven't seen Avatar. That's good. It means I can take a clearer look at the underlying policy problem. The policy problem in Avatar is that some blue people own all of some valuable natural resource, and won't let anybody else have any. Lloyd George, as UK Chancellor of the Exchequer, addressed the same policy […]
In which I applaud the Nova Scotia budget
I don't follow what happens in Nova Scotia all that closely, but since the budget brought down by its new-ish NDP government reproduces the main features of the Quebec budget (of which I approved), it seems only fair to give credit where credit is due. To summarise: An increase in the HST by two percentage […]
The Quebec budget: Will good economics be good politics?
The media are reporting that economists are singing the praises of the Quebec budget, and if asked, I'd add my voice to that chorus. This is the work of adults who take their responsibilities seriously, and the Charest government is to be congratulated for finally paying attention to what economists have been telling successive governments […]
The optimal size of government is a partisan issue. The optimal tax mix isn’t.
There are so many misconceptions about tax policy and the size of government that it's almost impossible to sort through them all. But I'm going to do the best I can.
A bad argument against lower corporate income tax rates
Here it is: The case for corporate tax cuts is that they supposedly prompt businesses to invest more in Canada. Critics have countered that an unconditional gift to those corporations which are already profitable will not necessarily increase investment. A third possibility that has received little attention helps explain why corporate tax cuts are so […]
Taxation in Canada – Part II: Constraints Faced When Designing a Tax System
In Part I we saw that the goals of taxation were two-fold: to collect revenue for the government and to discourage certain activities. However, the government hoarding Jacques Plante as an Edmonton Oiler hockey cards in an attempt to reduce the after-tax income of rich-people is not aligned with our goals. If there were no […]
Taxation in Canada – Part I: What Are the Purposes of Taxation?
This is the first in a series of posts that will examine the tax system in Canada, from an economist’s point of view. If we better understand how the tax system works, we can find ways to improve it. It turns out that there are a number of ways the Canadian tax system can be […]
The corporate tax on workers and consumers
One of the NDP's lines on the budget – the very first words spoken by Jack Layton in his reaction during the CBC coverage – is to denounce the continuation of the corporate tax rate reductions that began under Jean Chrétien's government in 2000. (The basic rate was 28% in 2000, is at 18% now […]
“Fire-and-forget” fiscal policy
If you wanted to build a "fire-and-forget" fiscal policy, or where you at least minimised the chances you would ever again want to change any of the tax and spend rules, what would it look like? I was thinking about Stephen's question: if we had a good enough social safety net, wouldn't that create a […]
The Nigel Tufnel school of tax analysis
This is from a post awhile ago: [P]ersuading Canadian progressives of [the] merits [of the GST] is a never-ending variation on the theme of "but these go to eleven:" Progressive Person: How do we raise the tax revenues we need for the social programs we want to implement without tanking the economy?Economist: Consumption taxes. Theory […]
Worthwhile Canadian Initiative 
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