Canada's Tax Burden Shifting From Corporations Onto People: Economist

For the first time in Canadian history, more than half of the federal government’s revenue in 2014 will come from personal income taxes -- a vivid sign that Canada’s tax burden is slowly shifting away from corporations and onto consumers.

It’s the apparent result of successive Liberal and Conservative governments that have cut corporate taxes far more aggressively than they have cut personal income taxes, while increasing “hidden taxes” that mostly impact low-income and middle-income workers.

Mr. Harper’s taxing troubles

Politicians don’t like talking about taxes much. Cutting taxes — they love doing that, and they love getting credit for it. But when it comes to talking about how we collect the money that runs the state, they cling to slogans — “putting money back into taxpayers’ pockets”, for example.

And there’s no question that, since coming to office in 2006, the Conservative government has cut taxes. But they’ve mostly been the wrong taxes, cut for the wrong reasons. Tax cuts aren’t just about reducing the overall tax burden on citizens — although that is important. But cutting the right taxes at the right times can spur economic growth, employment, savings rates. Cutting the wrong taxes can end up accomplishing nothing at all — beyond robbing the state of the revenue it needs to do its work, and winning a few points in the polls, short-term.

States Consider Increasing Taxes for the Poor and Cutting Them for the Affluent

A number of Republican-led states are considering tax changes that in many cases would have the effect of cutting taxes on the rich and raising them on the poor.

Conservatives are known for hating taxes but particularly hate income taxes, which they say have a greater dampening effect on growth. Of the 10 or so Republican governors who have proposed tax increases, nearly all have called for increases in consumption taxes, which hit the poor and middle class harder than the rich.

Favorite targets for the new taxes include gas, e-cigarettes, and goods and services in general. Gov. Paul R. LePage of Maine, who wants to start taxing movie tickets and haircuts, is also proposing a tax break for the lowest-income families to relieve some of the pressure.

How Businesses Get Enriched by Taxes

Millions of tax-paying Americans pick up the check left by multinational corporations that escape their obligations while enjoying all the benefits of doing business in America—including tax credits of up to 33 cents for every dollar of profit—David Cay Johnston writes at Newsweek.

Moving their headquarters “on paper,” as Burger King did this summer, is “just one of several ways multinationals don’t pay their fair share, and they get away with it because the federal government encourages such behavior,” Johnston continues.

How can a tax burden become a boon? Simple. Congress lets multinationals earn profits today but pay their taxes by-and-by. In effect, Uncle Sam is loaning these companies all that money they do not immediately turn over as taxes. And all of these loans come with the same attractive interest rate: zero.

Imagine how your bank statement would look if, instead of having taxes taken out of your weekly paycheck, Congress let you keep that dough in return for your promise to pay your taxes years or decades from now—and sometimes, never.

That’s the extraordinary deal Congress gives many big American companies now sitting on hundreds of billions of dollars of what are, essentially, interest-free loans. Apple and GE owe at least $36 billion in taxes on profits being held tax-free offshore, Microsoft nearly $27 billion and Pfizer $24 billion, according to Citizens for Tax Justice, a nonprofit organization respected for the integrity of its numbers even by groups that dislike its progressive perspective.

Read more here.

Original Article
Source: truthdig.com/
Author: --

BC Gov't Brags Budget Keeps Taxes Low, but for Whom?

British Columbia Finance Minister Mike de Jong today presented what he characterized as a "boring balanced budget" while forecasting more spending in coming years and setting out a framework for taxing the promised liquefied natural gas industry.

He boasted of B.C. having the lowest income taxes in Canada, though budget documents show the total provincial tax burden goes up significantly when Medical Services Plan premiums and other fees are included.

"We continue to balance essentially on a razor's edge," de Jong told reporters and observers at the Victoria conference centre.

The Big Move: Pay-per-kilometre system could be the way of the future

Officials in Oregon saw the problem coming years ago: Fuel-efficient cars and electric vehicles would spell disaster for a state reliant on gas taxes to pay for road repairs.

So they asked some drivers to pony up at the pump in a different way. In 2007, they launched a pilot project involving 300 motorists, who had GPS devices installed in their vehicles to record miles driven. Whenever they filled up, the drivers would pay an additional fee of about one cent per mile travelled, based on the device’s information.

Canada to update tariff system for first time since 1974: Will it hurt consumers?

For the first time in 39 years, Canada is updating its preferential tariff regime, increasing tariffs on more than 1,000 items imported from 72 different countries.

The changes to the system will take effect in 2015 and are estimated to bring in $1 billion in additional government revenue over the first four years, according to last week’s federal budget.

Canada-U.S. Price Gap: Budget's Tariff Changes Could Mean Higher Prices For Consumers

OTTAWA - Canadians will be paying hundreds of millions of dollars more on everything from food to bicycles because of a little-noticed change in tariffs Ottawa places on imports from emerging nations like China and India, say analysts.

The change comes from a notice in Thursday's federal budget that starting in 2015, Canada is "graduating" 72 countries previously classified as developing to full developed status for the purpose of tariffs.

Alberta’s income tax system is serving the province well

A University of Alberta think-tank is blaming the province’s tax system for widening the gap between the richest and the poorest citizens. Indeed, the Parkland Institute calls Calgary the “most unequal city in the country,” calculating that the wealthiest one per cent took in 26 times more than what people in the bottom 90 per cent did in 2010.

Frankly, we’ve never considered a high number of corporate head offices and professionals to be a shortcoming. Like any diverse community, Calgary has lower income earners struggling to make ends meet, but the existence of hardship isn’t a compelling argument to increase taxes on the highly educated, the highly skilled and the highly creative. Jacking up taxes on the wealthy would go some distance to reducing the income gap, but it would do so only by dragging down top earners, not by putting wind in the sails of single-parent families or those whose skills don’t match the employment market.

Meet the Front Group Leading the Fight Against Taxing the Rich

While most Americans don't object to Obama's plan to raise taxes on the wealthy, they're less excited about raising them for family-owned barbershops and ice cream parlors. This may be why Mitt Romney often claims that collecting more taxes from high earners would hurt mom-and-pop employers whose profits are taxed as individual income. "This is a direct attack on small business," he declared at a recent campaign stop in Virginia. His argument has the support of a powerful ally: the National Federation of Independent Businesses (NFIB), a "nonpartisan" small-business advocacy group that has put defending the Bush tax cuts for the richest of the rich near the top of its political agenda.

Federal government partly to blame for higher retail costs: Retail Council

OTTAWA — The federal government should take a chunk of the blame for the stubbornly high cost of consumer goods in Canada when compared with prices south of the border, the retail sector said Tuesday.

Testifying at special Senate hearings probing the reasons for price discrepancies between Canada and the United States given the value of the Canadian dollar, the Retail Council of Canada (RCC) said retailers are being unfairly tarnished as the culprit.

In addition to "outdated" import duties on finished goods and a lack of harmonization of different standards and requirements, council president Diane Brisebois flagged Ottawa's system of supply management affecting dairy and poultry prices as three of the "largest contributing" factors.

"We understand that this is a sensitive issue, but if this committee is really going to look at factors that contribute to the differences in pricing between Canada and the U.S., it would be remiss in not addressing supply management in some way," Brisebois told members of the Senate finance committee.

Vendor pricing in Canada is the fourth "significant" area of concern for the council, she testified.

But it would be wrong to assume that large, multinational retailers "should be able to negotiate one price from suppliers for the products they sell in North America," Brisebois said, pointing out the majority of products that retailers buy are sourced in Canada.

Tax increase for Ontario drivers is not the way to pay off the deficit

Last week, Ontarians — specifically drivers who own vehicles — were shocked to learn that they will soon be paying more for the privilege of driving a vehicle in this province.

Licence plate renewals for vehicles will increase from $74 this year to $98 by 2014, representing a 32 per cent increase. Replacing your driver’s licence will increase from $10 this year to $25 in 2015. Licence renewals will increase from $75 this year to $80 in 2015.

This sudden increase isn’t the result of rising gas prices or insurance costs; rather, it’s in the form of increased taxes and fees, as recommended by Don Drummond, the Chair of the Commission on the Reform of Ontario’s Public Services.

The collective voice of the Toronto and Ontario Automobile Dealers Associations, representing new car dealers across Ontario, strongly disapproves of this blatant tax grab, especially considering that the Drummond Commission had no mandate to recommend tax increases and showed the government how to balance the budget without increasing taxes. The Drummond Report stated that “most of the burden of eliminating the $30.2 billion shortfall in 2017-’18 must fall on spending.”