Tax Comparisons & No More Tax Cuts – PLEASE

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Here I am, a typical middle-class dude with lots to lose and I’m begging the so-called leaders of my federal government to avoid the Harpie-like calls for tax relief for businesses and on the personal level.

Why?  Because our social infrastructure will come to a drastic and complete failure if we do.

Mel Hurtig doees comparisons of tax rates for corporations and for personal income across the globe as research for his book, The Truth About Canada .

Last week, I received a newsletter update related to one of his chapters on tax rates.

Here’s an update from the OECD. For the most recent year for which reliable statistics are available (2007), of the 30 OECD countries, Canada is 20th when you compare the total tax revenue as a percentage of GDP.

Of the 10 countries that have lower total taxes, most have miserably poor social programs e.g. Mexico, Turkey, U.S.A., Korea.

Bear in mind that since 2007 total Canadian taxes as a percentage of GDP have come down substantially.

Here is a list of countries with higher taxes than Canada, with Denmark being the highest, followed by Sweden, Belgium, France, Norway, Italy, Finland, Austria, Iceland, Hungary, Netherlands, Spain, Luxembourg, Portugal, U.K., Czech Republic, Germany, New Zealand, Poland.

Overall, the OECD average is about 35.9% while the figure for Canada today is estimated to be about 33%.

The reality, as Mr. Hurtig points out, is that we are no longer in need of more tax cuts just to ‘be competitive’ with other nations.  In fact, I’d argue that in order to attract quality employees and talented professionals, we need a stable and reliable social safety net that takes care of everyone in our society.

As we head into the final days without government (when we’ve needed it more than any time in our history), question the clarion call for tax cuts and understand that cutting taxes in an age when people aren’t making money is foolish and only benefits an elite few.

Supoprt new initiatives that will re-build Canada’s manufacturing base and goals that are geared towards a green economy.  Only then will our investments pay off.

2 comments on “Tax Comparisons & No More Tax Cuts – PLEASE

  1. Our health care system is a competitive advantage over the U.S. There, employers provide health insurance which is part of worker compensation – and the cost is built into their exports. Our health care costs come from taxes. When you make a more fair comparison by removing health care costs from our tax rates (or add them to theirs) we're already competitive with the U.S (my speculation).

    Do you know if this is factored into the OECD numbers?

    I agree there is more to competing for internation investments than simply “price” (e.g. taxes). And we have to properly promote those benefits.

    In the absurd extreme, would you set up an auto parts plant in Afghanistan if the tax rate were near zero? And this leads into a rant about helping the developing world, too long for this comment.

  2. To be honest, I'm not 100% sure, but are these kind of numbers ever 100% complete? To your point, we know that most companies and employees want some kind of stability, but in many cases, the employees may NOT have the choice. Think of China. Someone told me recently that there's nearly an entire province in the Western region that is basically a complete prison camp. Millions of inmates are made to work for many companies that we buy from on a regular basis. Is this decent?

    Also, our health care system is one of the critically important factors that are saving us from the crisis that's taking place in the US with the debt crisis. Of course, many people shouldn't have been buying houses if they didn't have jobs or down payments, but we all WANT things too badly to turn that kind of stuff down (this is a different discussion). For those that got into financial situations because of their medical bills (there have been many on record), they have to sell of their only assets to pay their bills.

    I'd be interested in seeing any of our parties refer to quality of life indeces as the main rationale for doing what we do. Canada used to lead the world in quality of life, but we've slipped a lot in recent years because of reductions. Expect more with the Harpercrite and Iguana in charge.

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