1. Ulir'tg such a "high-tax" nation to being an average taxing nation would be a
tax-saving bonanza.
The tix_complainer may be surprised to know that, in 2010, Canada
had a total tax revenue to gross domestic product (GDP) ratio of 3"/,. of
the 30 countries for which tie organization for Economic Cooperation and
Development (OECD) has avai1ab1J010 dutu, the unweighted average is 34'3oo-
This mlans that, if Canada had been an aaeragetaxing country, there lt'ould
have been an additional $43 billion for public spending'
That,sbecauseCanada's total tax revenue to GDP ratio is smaller than thai
of 20 of those 30 countries. Canadais in fact a low-tax iurisdiction.
Imagine an additional $43 billion. It would take only 23% of the nervly
found iurr".r.r" finally to reach former Prime Minister Lester Pearson's
international commitment for international aid. It would take less than 5%
for a fully-funded national affordable housing strategy. we could do both of
those things, eliminate the deficit, and do much more' if we were an aaerage
taxing nation.
Tirose claiming Canada,shigh-tax status might argue that, because of the
progressive tax sy-tem in this country, high-incom" C."119h1s still have to
iuy"-or" than is fair. But it's worth utti.tg if they would like Canada's high-
income earners to take on only an average proportion of what Canadians
p"y i" taxes. surely, the change from such "high" tax rates to an average rate
woula be a tax-saving windfall for Canada's top earners?
The tax complairiers may be surprised to learn that taxpayers in the 5th
income decile (moderate-irio*" Canadians) paid 35.4%of their income on
income, paytoll,consumption, property, capital gains' and-corporate taxes in
2005.Those in the top 17"of incom" euttt"tt paid less -
90:?'/:
of their income'
The top I'/"had, ur,
^urr"tugu
income of $405,000 in2007. If these top earners
had pald the same propoiion of their income in taxes as did people earning
ggs,6oab$45,528,they would have paid on average an additionalfi19,845, or
a combined additional $4.9billion'
And what if we combine these two concepts - Canada being an average
.orrrr,ry and its highest income earners paying an average amount? The top
ly" would also pay ta.8% of the additional g+gUittlott - proportional to their
share of income - for a combined contribution of $10.8billion.
IfCanadaweleanaveragetaxingnation,theadditionalcontributions
of the top I"/"alone could booit us beyond Pearson'sinternational aid goal'
This is an important discussion to have with
,,high-tax,, complainers'
Thereclearlyisapointatwhichhightaxescandoagreatdisservicetoa
country. Canada's iax rates are not near that poin!, especially for very high-
ir.Icomeearners, but misinformation about allegedly high tax rates can have
CUESTEDITORIAL:
Our low-tax country
ow often have you heard that Canada is a high-tax nation?.The next
,irn" yon are toid this, consider asking the speaker if he or she would
rather that Canada's tax rates just be average' Surely, the change{rom
a similarly damaging effect.
Stephen Uurp".,it an informed tax complainer' would not take on this
u.r"*gi taxation challenge. He never agreed that average taxation would
be suificient for CanadafDuring the 2O0aConservative Party leadership
convention, he said he would sirive to make Canada "the lowest taxing
[corrrttry]." It's hard to know what countries he had in mind as a comparator
for Canada. Kuwait? Equatorial Guinea? Based on the United Arab Emirates, if
*" ur" supposed to take Harper's vision for Canada seriously' Canada would
have a tax revenue to GDP iatio of less than 7.4%.This would mean having
an annual tax revenue of less than $20billion, across all levels of government'
Then again, it's hard to take Stephen Harper - or anyone else who says
that Canadi has high taxes - all that seriously-,
-T homasAp pliy ard, lJnioersity of Toronto' t$l
CCPAMonitor 2
Internet=freeilom
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"TheInternet is uncontroliable.Ald
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will prevail.It's assimpleasthat."
-Ai Wei,weiin The[UK] Guardian'
Jun