Suchergebnisse

Since the Notley government was elected in May 2015, total government expense has increased 14.3 per cent, well in excess of the growth of population and inflation - 8.9 per cent. Capital spending and grants have increased by a whopping 40 per cent, all of it financed by selling off financial assets and issuing new debt. Total debt servicing costs have increased from $776 million to $1.355 billion, an increase of $579 million - larger than the increase in the education budget and second only to the increase in the health care expense.

The NDP government's plan to balance the provincial budget by 2023-24 is based on drastically cutting capital spending and on optimistic revenue projections.In order to show that these are the key elements of the "Path to Balance", we need to know how interest payments on debt, total operating expenditures, and the cash deficits will evolve under the government's plan, but these key fiscal variables are not reported in the budget documents.

In this paper, we provide an overview of the equalization grant system in Canada and the issues that have been raised concerning the reform of the fiscal transfer system. Any reforms to the equalization grant system have to balance three concerns — "efficiency" effects that arise through federal financing of transfers, and the incentive effects on provincial fiscal policies, "entitlement" to reasonably comparable public services at reasonably comparable levels of taxation, and "ownership" of resources and independence of fiscal policies by provincial governments. Five proposals for reform of the equalization system are discussed. With regard to the inclusion rate for resource revenues in equalization formula, we argue that the rate should be reduced from 50 per cent to 25 per cent and that ceiling on total equalization payments should be eliminated. We argue against the proposal to exempt from the calculation of equalization entitlements that are deposited in provincial sovereign wealth funds because this would not reduce total equalization entitlements in present value terms, it would be complex to implement if it extended to all forms of savings by provinces (such as debt reduction), and it would not alter the resource rich provinces' incentives to save more of their resource revenues. We argue against a proposal to reduce CHT and CST to provinces with above average fiscal capacities because this would reduce their incentive to develop and tax their resources, and it would be counter to the purpose of these block grants, which is to reduce the vertical fiscal imbalance between the federal and the provincial governments. We review the Gusen (2012a) proto-type model for incorporating variations in costs and needs in the computation of the equalization entitlements and argue that this procedure seems feasible and merits further analysis.

Periodically, tax systems need major reforms to remove the "barnacles" that accumulate under the short-term pressures of political expediency and to adapt to the long-term forces of technological and economic change. The current fiscal and economic problems that confront the provinces require an assessment of much-needed reforms. Raising tax revenue imposes large costs on our society, not only because of the administration and compliance costs of collecting taxes, but because taxes distort economic decisions in the private sector. This is especially true of provincial corporate income taxes. Taxing highly mobile corporate capital and corporate profits encourages firms to shift their investments and profits across provincial and international boundaries. The provinces would enjoy significant boosts to economic growth and efficiency gains by enacting a revenue-neutral switch from corporate to sales or personal income taxes. For Alberta, such a shift would yield up to $40 per dollar of tax revenue shifted from corporate to personal income taxes; for fiscal year 2011-12, this would amount to a percapita welfare gain of roughly $19,000. Other options for tax reform are also discussed in this paper, including the adoption of a penny tax to the GST to fund infrastructure spending by municipalities. However, we think this would saddle the private sector with significant compliance costs and create major economic distortions between neighbouring municipalities by creating an incentive to shop where the penny tax proposal was not adopted. In surveying the most pressing tax reform issues facing Canada, we offer policymakers a firm basis for coming to grips with them, so they can treat tax dollars with the care and foresight Canadians expect.

Racing to the Bottom? Provincial Interdependence in the Canadian
Federation, Kathryn Harrison, ed., Vancouver: UBC Press, 2006, pp.
305.There is a widely expressed concern that technological changes and
lower barriers to trade and investment have reduced governments'
ability to impose taxes on mobile inputs, such as financial capital or
venture capitalists, and this will constrain their ability to provide
basic public services and redistribute income. These forces are often
described as producing a "race to the bottom," in which
governments compete through their tax, regulatory, and expenditure
policies to attract footloose investments.

Abstract
An expression for the welfare cost of a marginal increase in the public debt is derived using a simple AK endogenous growth model. This measure of the marginal cost of public funds (MCF) can be interpreted as the marginal benefit-cost ratio that a debt-financed public project needs in order to generate a net social gain. The model predicts an increase in the public debt ratio will have little effect on the optimal public expenditure ratio and that most of the adjustment will occur on the tax side of the budget.

This article examines the tax assignment question ‐ what level of government should levy taxes and what tax bases should they use? The general principles and specific recommendations of the 'consensus' position on tax assignment are reviewed. Some of the problems with the consensus view are discussed, including its top‐down benevolent government perspective, its lack of emphasis on accountability, and its failure to acknowledge the problems that are created by the joint occupancy of tax fields. Data are presented indicating that there is wide variation in the levels of taxation and in the tax bases used by subnational governments in eight federations. It is argued that globalisation may strengthen the relative tax powers of state and local governments, while at the same time increasing the public's willingness to pay for education and infrastructure, public services which are provided by subnational governments in many federations.