There is little doubt that the Harper government intends to start the tax cuts rolling again as soon as it reaches a balanced budget, but are Canadians really looking at the state of the nation and demanding more of their own money back?
Canada is by international comparison a low tax country. There is no particular need to cut individual or corporate tax revenues further, although taxes could be reformed to be much more fair.
In a November poll done by Nanos for the Canadian Health Coalition, 45 per cent of those surveyed believe surpluses should go to improving the health care system. Only 16 per cent said it should be used for tax cuts.
Further, more than six in ten Canadians would be willing to payer higher taxes if it meant home care or drug costs would be covered under Medicare.
How do Canadians view Federal Finance Minister Jim Flaherty’s plan to let future federal health transfers to the provinces to become dependent on the state of the economy? Sixty-five per cent said they prefer the Government of Canada to commit to a fixed rate rather than let the transfers rise and fall with the economy.
Flaherty has been projecting that the federal government will be back into surpluses by 2015.
Find the full poll results by clicking here.
The Ontario government has long believed that cutting corporate taxes will spur economic growth. A new six-decade study from the U.S. Congressional Research Services says that tax rates “have had little association with saving, investment or productivity growth.” The study did find that reductions of capital gains taxes and top marginal rates have led to greater income inequality. A story in The Atlantic notes that in the 1950s the top marginal rates were about three times what they are today, yet GDP growth was twice as fast in the 1950s as it was in the 2000s.
The former clerk of the privy council, Himelfarb was frank about his assessment that we have been sold a bill of goods with regards to tax cuts and austerity.
The lecture was sponsored by the Canadian Centre for Policy Alternatives and the Literary Review of Canada. It was produced for TVO’s Big Ideas series.
Watch the full lecture and Q&A online here.
Rather read about it? Our Diablogue story is here.
There is no question that the last decade was a period of reinvestment in health care.
The recent report on health care cost drivers by the Canadian Institute for Health Information (CIHI) suggests governments made a conscious decision to invest in health care when revenues became available from eliminating deficits and paying down debt.
By reducing the amount spent on servicing that debt, governments across Canada were able to increase spending on key areas at a rate that exceeded overall revenue growth.