Category Tax policy
Doing it by the (text)book: The Nordic approach to financing the welfare state
These are the slides I prepared for the session on ‘Taxation and Social Democracy‘, organised by the Progressive Economics Forum at the Canadian Economics Association meetings; the invitation was based on my blog posts on the nordic model. One of the things that distinguishes blogging from research is that although academia frowns on recycling ideas, […]
Corporate profits are not driving the increase in the top-fractile income shares. So how would higher corporate taxes reduce inequality?
Jason Furman, guest-blogging at Free Exchange, advocates higher corporate taxes. He gets at least two important things wrong: He seems to think that corporate taxes will be entirely paid by owners of capital. It’s more likely that investors will bear approximately none of the tax. He suggests that corporate taxes will help slow the growth […]
Why focus on progressive taxes and not on progressive transfers?
Many posts in the economics blogosphere on the subject of progressive taxation today: Greg Mankiw discusses this paper, Mark Thoma points us to a WSJ article, and Brad DeLong links to Mark’s post twice (here and here). Inequality – both its level and the rate at which it has been increasing in Canada and the […]
Income-splitting: An expensive way to solve a small problem, and to make a bigger problem worse
The Conservatives are floating the idea of income-splitting, and Andrew Coyne – who has apparently read Jean-Yves Duclos’ Innis Lecture that I referred to here – approves on the basis of fairness: For once, the crass appeal to the base is also the perfect means of broadening the base; the cynical vote-buying thing is also […]
A good decision on income trusts
The federal Conservatives’ decision to eliminate income trusts has generated a certain amount of fuss (even The Economist noticed), especially in the form of sharply reduced share prices for companies that had structured themselves to take advantage of the tax breaks they provided. Much of the media coverage about the pros and cons of income […]
Voters’ economic acumen underestimated
The Conservatives’ promise to reduce the GST to 6% put economists once again in the painful position of witnessing economic sensibility being sacrificed for electoral gain. ‘Why’, we asked ourselves, ‘is bad economics good politics?’ Maybe it isn’t. From this morning’s Globe and Mail: Voters cool to GST cut, Tories warned: The GST cut at […]
Marginal tax rates: flat and fuzzy
I noted earlier that average tax rates in Canada are an approximately constant fraction of income. What about marginal income tax rates (MITRs)?
Canada already has a flat tax
I suspect that the typical Canadian – and this includes economists – has the impression that the tax system in Canada is progressive. Maybe too progressive, or not progressive enough according to their taste, but progressive. It turns out that this isn’t the case. According to this paper (pdf), the most recent study that tries […]
The Irish exception
In some circles (such as on the pages of the National Post), whenever the virtues of the Nordic model are cited, a standard riposte is "What about Ireland?" Well, indeed. When I was putting together the graphs for this post, I found that Ireland was quite literally off the chart.
Nordic Canada: The tax mix
The ‘Nordic model’ has many admirers, and I’m one of them. It appears to have the best of both worlds: the wealth that markets provide best, combined with the social programs that governments provide best. As I noted earlier, there’s no obvious tradeoff between these two objectives: we can have both, if we want. For […]
Worthwhile Canadian Initiative 
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