Category Tax policy
Taxing the rich is harder than you think, part 2
A few weeks ago, I wrote this on the effectiveness of introducing a tax surcharge on high income earners as a way to reduce income inequality: [We] have to look at the incidence of the increased tax on high earners. The burden of the tax does not necessarily fall on the people who actually pay […]
Optimal Tax Theorist bleg; can 100% marginal tax rates ever make sense?
This is a bleg. I'm looking for someone who: understands optimal tax theory better than me (shouldn't be too hard); can explain it simply (may be harder). Here's the question: can it ever be part of an optimal tax system to have 100% marginal tax rates on some part of the income distribution?
Taxing the rich is harder than you think
In this post on Ed Broadbent's suggestion for a 6 ppt increase in the income tax rates faced by people earning $250k or more, I mentioned that some serious econometric work had to be done before this could be treated as a meaningful proposal. It soon occurred to me that there very likely had been […]
Quebec: An oasis of sanity in a desert of GST/HST silliness
The Charest government is floating the idea of increasing the QST – which has been harmonised with the GST since the very beginning – by another percentage point (in addition to the one-point increase announced in last spring's budget) as a way of dealing with the post-recession deficit. This is clearly the right thing to […]
Economic policy advice for the NDP, Part IV: Corporate income taxes
Here is my first recommendation to the NDP on corporate income taxes: accept the fact that previous NDP positions have been – to put it kindly – painfully amateurish and should be discreetly tossed into the Dumpster of Disavowed Doctrines. It's tabula rasa time, and the long path back to reality-based policy starts below the […]
Economic policy advice for the NDP, Part III: The GST
The NDP has never been a fan of the GST, and persuading Canadian progressives of its merits 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. […]
Why the GST is a good idea
It occurs to me that although most of the media coverage on the cuts to the Goods and Services Tax – and the various proposals to reverse those cuts to the GST – makes note of of the fact that there is a broad consensus among economists about the merits of consumption taxes, I haven't […]
Strengthen automatic stabilisers instead?
Suppose you believe that Canada (or the US, or wherever), needs a more expansionary fiscal policy now. If so, answer these questions: 1. Would you also recommend a more expansionary fiscal policy at some future time, if Canada ever found itself in the same situation as it is now? 2. If so, why would you […]
A GST fiscal stimulus
There are a number of fiscal stimulus proposals out there, but none of them incorporate my suggestion for using the GST to promote an explicitly short-term stimulus and to ensure that the government's ability to pay for future spending is not permanently compromised. For those of you who have not been paying close attention [Cries […]
The Basil Fawlty theory of corporate taxes
Fawlty Towers is one of the best television shows ever. It ran for 12 episodes, and each is a highly-polished gem. One of my favourites is the episode ‘Gourmet Night’, in which Basil Fawlty – the incomparable John Cleese – tries to increase the tone of his run-down hotel. At a crucial point, Basil’s car […]
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