>Date: Thu, 14 Oct 1999 15:13:27 -0700 >From: Murray Dobbin <[EMAIL PROTECTED]> >To: [EMAIL PROTECTED] >Subject: phony tax revolt > >Bob... I have just published a booklet called "10 Tax Myths" with the >CCPA. The op ed below highlights some of its more interesting findings. > >Murray D. > >The crisis of high taxes is a phony crisis > >By Murray Dobbin > >Following on months of scare mongering by the National Post, Canadians >now face the country's three largest business lobbies joining together >in a deafening call for massive tax cuts. The call will be repeated and >repeated in the hope that Canadians will gradually give in and accept >the message. It is a repeat performance of the deficit hysteria of the >early nineties and like that campaign based on carefully constructed >myths. > >Let's examine some of them. First and foremost, is the myth about how >high corporate taxes are in Canada. Examining OECD figures reveals that >Canada's corporate tax regime places us in the middle of the pack of 29 >industrialized nations. But what about our main competitors? The >international firm KPMG has done several studies that show Canada's >effective corporate income tax rate (the actual rate of taxes paid) is >very competitive. In on such study, comparing Canada with Britain, the >US, Germany, France, Italy, and Sweden, Canada had the lowest tax rate - >27.4% versus 40% for the US. In addition, respecting the two other major >taxes affecting investment, payroll taxes and property taxes, Canada was >significantly lower than the US and the other countries examined. > >The loudest calls for tax cuts are aimed at personal income taxes >compared with the US. The argument is made that we have to remain >competitive with the US in being able to attract high skilled workers >and to reverse the brain drain. The brain drain argument persists even >though the data shows that in fact Canada has a net brain gain - we lose >8,000 university graduates to the US while gaining over 32,000 from >other countries. Most of those we lose are in the health field, forced >to emigrate because of spending cuts. > >Two studies indicate that though our personal taxes are higher in Canada >than in the US, when other factors are added in the differences >disappear. A study by Standard and Poor's DRI revealed that when you >take account of the money Americans have to spend in the private sector >for health care and education, the so-called "tax burden" is virtually >identical in the two countries. Supporting that conclusion is a study >done by Michael Wolfson, the director general of Stastcan. It revealed >that the average Canadian family has more take-home pay than their >American counterpart: $30,200 versus $29,500. Only in the top one-fifth >of income earners do Americans have a higher take-home pay - in the >bottom four quintiles Canadian do better. > >It is ironic that the tax-cut advocates pitch their appeal on the basis >of job creation when for the past ten years these same voices have >lobbied hard to keep inflation low and unemployment high. But in any >case the argument that tax cuts will actually increase tax revenue >through economic stimulation doesn't hold up either - unless those cuts >are given to the lowest income Canadians who are obliged to spend all >they earn. According to the Ottawa firm Informetrica, the most >stimulative tax cut would be the GST. A $100 million cut here would >produce 55,000 jobs. But a $100 million in increased government spending >on medicare or education would result in 70,000 new jobs, on child care, >130,000 jobs. > >Perhaps the most dubious part of the tax cut campaign is the myth that >there is "tax rage" in the country, that Canadians are demanding tax >cuts. In fact, Canadians have shown in poll after poll that they want >more money spent on health care and education. The most comprehensive >polling in the country, conducted by Ekos in its yearly "Rethinking >Government" study, asked people what the federal government's priority >should be. Tax cuts placed seventh, behind health care, education, child >poverty, improving productivity, supporting children and families, and >reducing the national debt. Even in Ontario, in the middle of the last >provincial election, an Angus Reid poll revealed that 53% wanted the >government to forget the tax cut and spend the equivalent amount of >money on health care and education, while 22% said forget the cut and >bring down the deficit. > >The purpose behind the tax cut campaign is clear and it has nothing to >do with job creation, international competitiveness, or the brain drain. >It has to do with permanently lowering the government's revenue so that >its capacity to provide public services is diminished, clearing the way >for increased privatization of health, education, and other services. >Canadians in their vast majority do not want this. But if they fall for >the tax cutters propaganda that is what they will get. > > > -30- > >Murray Dobbin is a Vancouver writer and broadcaster. His latest work is >"Ten tax myths" has just been published by the Canadian Centre for >Policy Alternatives. The study is available on the CCPA's web site >at: www.policyalternatives.ca > > > ............................................. > Bob Olsen, Toronto [EMAIL PROTECTED] > ............................................. >
