Are the rich paying their fair share of taxes in Canada?
When the credit crunch threatened Canadian financial institutions in 2008, the Conservative government came to the rescue with $200 billion in support through an “extraordinary financing framework.” At the time, increasing taxes or cracking down on tax havens was not on the radar. The government simply decided to make money available and used the resources of its central bank to do so.
There are indeed many legitimate reasons to crack down on tax evasion, since growing inequality harms the economy and threatens democracy. But tax collection does not increase the fiscal capacity of a government with a floating, fiat currency. Money needed for hospitals, schools and infrastructure does not depend on first collecting tax from miscreants.
A government that has demonstrated it can bail out mega-banks and corporations can also meet the needs of its people just as immediately as it has met the wants of its elites.
Larry Kazdan, Vancouver, B.C.
Copyright 2017. Toronto Star Newspapers Limited. All Rights Reserved
"To soften the impact of the crisis, the first phase of Canada’s Economic Action Plan included measures to provide up to $200 billion to support lending to Canadian households and businesses through the Extraordinary Financing Framework."
2. What matters about the Paradise Papers
William Mitchell is Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), University of Newcastle, NSW, Australia
"The idea that the savings and tax receipts of the rich are in some way important in order for governments to be able to provide high quality services, public infrastructure and jobs to advance the well-being of society is a very dangerous and misguided narrative for progressives to engage in.
If there are child-care staff available for hire in Canadian dollars, then the Canadian government can always afford to hire them.
Similarly the rest of the wish list – better housing (presumably there are available carpenters and materials) and the rest of it.
The same logic applies to all currency-issuing governments, which have the capacity to purchase anything that is for sale in the currency they issue – at any time.
The choice is political not financial."
3. Taxes and the Public Purpose
"....taxes do not “pay for” government spending. Indeed, no taxes can becollected until government has spent. Taxes create a demand for thegovernment’s spending and logically precede that spending.As we’ve argued, it is neither correct nor politically sensible tolink “give to the poor” policy to “tax the rich” policy. The purpose ofthe tax is to free up resources to pursue the public purpose—includinganti-poverty programs.But our tax system is already doing a HECKUV A JOB creatingunemployed resources. We can spend on the poor (and on a full range ofother public policies) and thereby mobilize those unemployed resources...."