Skip to main content

“I am a Canadian, free to speak without fear, free to worship in my own way, free to stand for what I think right, free to oppose what I believe wrong, or free to choose those who shall govern my country. This heritage of freedom I pledge to uphold for myself and all mankind.” ~~ John G. Diefenbaker

FRASER INSTITUTE -- Ottawa’s tax hike on high-income earners will take in less revenue than expected—and eventually less than if it hadn’t increased taxes at all


The federal government’s recent tax increase on top earners will not raise the level of revenues expected and will eventually reduce government revenue, finds a study released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

When governments raise tax rates with an eye on more revenue, taxpayers respond by working or investing less, or legally shifting income or expenses to reduce their taxes, which results in less additional revenue than governments expect,” said Finn Poschmann, resident scholar at the Fraser Institute.

In Revenue Effects of Tax Rate Increases on High-income Earners, Ergete Ferede, study author and associate professor of economics at MacEwan University in Edmonton, spotlights the federal government’s top personal income tax rate increase (from 29 per cent to 33 per cent), which took effect in 2016.

He accounts for the fact that when income tax rates change, taxpayers respond.

According to study estimates, if there were no behavioral responses from taxpayers in other words, taxpayers continue to behave as if there were no tax changes — the federal government would collect an additional $10 billion this year due to the tax increase. But after accounting for taxpayer responses, that number drops to $800 million a difference of $9.2 billion.

More worryingly, by 2025, the author estimates that taxpayers’ behavioural responses to the tax rate increase will outweigh any additional revenue collected, meaning Ottawa will actually collect less tax revenue than it would have had it not increased the tax rate.

Tax rate hikes on high-income earners seem to be a popular policy choice for governments facing budget challenges, but this study casts doubt on the appropriateness of raising tax rates on high-income earners as a tool for gaining revenue,” Ferede said.


The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of think-tanks in 87 countries. 

Its mission is to improve the quality of life for Canadians, their families and future generations by studying, measuring and broadly communicating the effects of government policies, entrepreneurship and choice on their well-being. 

To protect the Institute’s independence, it does not accept grants from governments or contracts for research






Comments

Popular posts from this blog

GORDON F. D. WILSON: When The Trick Masquerades as The Treat

Thirty-seven years ago, Halloween 1987, I became the leader of the BC Liberal Party.   British Columbia was badly polarized. Social Credit held one side and the NDP the other. It had been twelve years, 1975, since Liberal MLAs Garde Gardom, Pat McGeer, and Alan Williams had walked away from their party to join Social Credit, one year after the lone Progressive Conservative MLA Hugh Curtis had abandoned his party to sit with Bill Bennett, the son and heir apparent to long-serving BC Premier, WAC Bennett.   An unwritten agreement by the biggest Canadian political shareholders, the federal Liberals and Conservatives, decided that if British Columbia was to remain a lucrative franchise from a revenue perspective, they couldn’t risk splitting the electoral vote and electing the real enemy, the NDP, so no resources would be used to finance either a Liberal or Conservative party provincially.   “There are two sides to every street,” I was told by a very prominent Canadian businessman who cont

FORSETH: As a BC Conservative member, and campaign worker, I will again state that the fact these errors were found -- AND brought to light BY Elections BC -- shows the system IS working

Sadly, two and a half weeks after the BC provincial election campaign, those who want to undermine our political process are still at.  PLUS, we also have one who doesn’t even live in our country, never mind our province. I speak of the buffoon running for President of the United States, who has poisoned the well when it comes to faith in the electoral process. Just today alone, comments such as the following, were being made of posts that I shared online: ... all the votes they keep finding has just favoured NDP on in all critical ridings and soon they will flip another riding in favour of NDP, Come on. ... Elections BC has ridiculed British Columbians, and I no longer have confidence or trust in their process and competence regarding the results Then there are others online, with comments like these – who are claiming fraud in the October 19th election: ... Who is the oversight for Elections BC? They should be investigated for election fraud! ... Fraudulent election ... should be red

“With the talent and dedication of this caucus we will hold David Eby to account for his government’s out of control spending and ongoing failures in healthcare, public safety and addictions" — John Rustad

Today, John Rustad, Leader of the Conservative Party of British Columbia, proudly unveiled his shadow cabinet, a dynamic team of talented individuals ready to hold David Eby’s disastrous government accountable and present a strong alternative vision for British Columbia. “ Our shadow cabinet is a diverse and experienced group, committed to restoring prosperity, public safety, and affordability for every British Columbian ,” said Rustad. “ With experts in every field, we are focused on delivering real solutions for the challenges our province faces .” Rustad emphasized the historic appointment of Aaliya Warbus as House Leader. The shadow cabinet reflects the Conservative Party’s vision to build a brighter future for British Columbia. The appointments are as follows: Leadership Positions : Aaliya Warbus – House Leader Bruce Banman – Whip Sheldon Claire – Deputy Whip Portfolios : Tony Luck – Municipal Affairs and Local Government Sharon Hartwell – Rural Communities and Rural Development I

Labels

Show more