The Big Bang Theory (of creating a fiscal revolution)
Canada's federal budget deficits are increasing, prompting discussions about the need for tax reforms. A recent study suggests a comprehensive approach to tax changes could significantly boost investment and GDP. The study advocates for deep cuts to income taxes while increasing consumption taxes to revitalize the economy.
- ▪Deficits in Canada are projected to continue growing due to major defense spending commitments.
- ▪The tax burden has risen to 34.9 percent of GDP by 2024, the highest since 1999.
- ▪A proposed 'Big Bang' approach to tax reform could increase GDP by 2.5 percent and annual tax revenue by $26 billion.
Opening excerpt (first ~120 words) tap to expand
Deficits are stretching as far as the fiscal eye can see in federal budgets. Major defence spending commitments are looming. Government needs to spend more, some say, to galvanize economic growth. The time is right for a tax increase to close that fiscal gap, or so the argument goes. But even a cursory look at fiscal history shows that governments in Canada do not have a revenue problem (although there is a problem with the mix of revenue they collect).As this first chart shows, the tax bite (from all three levels of government) has been on the rise over the last decade.
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Excerpt limited to ~120 words for fair-use compliance. The full article is at The Globe and Mail.
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