{"id":8038,"date":"2024-04-13T15:00:07","date_gmt":"2024-04-13T12:00:07","guid":{"rendered":"https:\/\/ch.jfdi.cc\/?p=8038"},"modified":"2024-04-13T15:00:07","modified_gmt":"2024-04-13T12:00:07","slug":"opinion-new-taxes-would-be-a-mistake-freeland-is-still-likely-to-hike-levies-on-corporations-and-the-wealthy","status":"publish","type":"post","link":"https:\/\/ch.jfdi.cc\/?p=8038","title":{"rendered":"Opinion: New taxes would be a mistake. Freeland is still likely to hike levies on corporations and the wealthy"},"content":{"rendered":"<figure class=\"BodyImage__BodyImagePhoto-xeeopr-0 hMuyCA\">Open this photo in gallery:<figcaption class=\"c-image-figcap c-image-figcap--block\"><span class=\"caption text-gmr-4\">Deputy Prime Minister and Minister of Finance Chrystia Freeland participates in a news conference to announce a new youth mental health fund at the National Press Theatre in Ottawa on April 9.<\/span><span class=\"credit text-gmr-5\">PATRICK DOYLE\/The Canadian Press<\/span><\/figcaption><\/figure>\n<p>Federal Finance Minister Chrystia Freeland knows hiking taxes would be a mistake.But she\u2019s still likely to raise levies on the country\u2019s largest companies and wealthiest citizens in Tuesday\u2019s budget.Increasing government revenues is the only way to square Ms. Freeland\u2019s repeated pledges to respect the fiscal anchors she set last year and pay for the new programs Prime Minister Justin Trudeau has scattered like candy across the country in recent weeks.\u201cTax hikes are a tool that the Liberals have previously reached for, with increases in top marginal personal tax rates, alternative minimum taxes, and more recently, higher taxes on banks and insurers,\u201d said Avery Shenfeld, chief economist at CIBC, in a report Friday.In Ottawa and on Bay Street, discussions about tax hikes are focused on two possible scenarios. Economists and policy shops, such as the Business Council of Canada, say the Finance Minister is considering a tax surcharge on companies in sectors the government deems to be excessively profitable. Ms. Freeland is also contemplating a wealth tax on individuals.\u201cBoth of those would be on brand for the current government,\u201d said Bank of Montreal senior economist Robert Kavcic in a report Friday.Higher corporate taxes on specific sectors \u2013 the grocery stores, telecoms and energy producers that consumers love to hate \u2013 would be consistent with last year\u2019s increase in levies on banks and insurers.The extra revenue would help Ms. Freeland deliver on her promise to keep this year\u2019s deficit below $40-billion and bring down debt as a percentage of the overall economy. In 2023, the Finance Department forecast that higher taxes on financial institutions would bring in an extra $2.25-billion over five years.You don\u2019t need to be an economist to realize that punishing one industry, while favouring others, is bad public policy. That is, however, what economists say. \u201cPicking specific sectors, perhaps those that just happen to be making more money in the last year, goes against the grain of having a tax system that doesn\u2019t arbitrarily tilt capital flows,\u201d Mr. Shenfeld said.Raising corporate taxes also makes it harder for Ms. Freeland to solve one of the government\u2019s most vexing long-term challenges: the steady decline in Canadian productivity.To increase prosperity \u2013 to boost the wages of workers who elect governments \u2013 Ms. Freeland needs to get CEOs to invest more money in their businesses. Higher taxes achieve the opposite. Mr. Shenfeld said: \u201cTaxes on profits will, unless passed on to consumers in higher prices, serve as a disincentive for the capital spending.\u201dThe potential of companies to pass along at least a portion of any tax hikes to their customers would feed the inflation dragon the Finance Minister has spent the past two years trying to slay. \u201cHigher taxes will be passed on in part to consumers, and that can only fuel inflation and have a negative impact on affordability,\u201d said Robert Asselin, a former budget director of the Finance Department and now a senior vice-president at the Business Council of Canada.Raising taxes on the wealthy \u2013 again \u2013 is equally problematic.Canada already has one of the highest top statutory personal income tax rates in the OECD, at 53.5 per cent. Boosting this burden is more likely to fuel flight than fill government coffers. When France opted for a so-called \u201csupertax\u201d on its richest citizens in 2012, its soccer players threatened to go on strike and numerous luminaries, including actor G\u00e9rard Depardieu, quit the country. The tax brought in far less revenue than expected and was scrapped within two years.France also dropped a four-decade flirtation with wealth taxes in 2017 after the measures brought in minimal revenues while prompting an estimated 10,000 citizens to depart. Most simply relocated to next-door neighbour Belgium.New taxes can\u2019t be at the top of the list as Ms. Freeland tries to balance the country\u2019s financial health with her government\u2019s ambitions, including winning the next election. Economists recommend the government look to common sense measures \u2013 spending cuts, slowing new program launches \u2013 in the coming budget. Mr. Shenfeld said the Finance Minister should \u201conly opt for new taxes as a last resort, and in a way that avoids barriers to much-needed productivity gains.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Chrystia Freeland is likely to raise taxes on the country&#8217;s largest companies and wealthiest citizens in the upcoming budget to increase government revenues and pay for new programs.<\/p>\n","protected":false},"author":6,"featured_media":8039,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[1521,1902,611,2508,1766,186,913,2134,33,2542,2021,3399,5099,3471,898,2190,26,1600,358,569,518,5240,6259,1315,499,2658,415,6258,3970,210,2294,3398,4924,1823,1991,67,2828,3356,2628,3331,634,3682,4833,4843,1033,1792,5957,5051,4620,5612,5614,1824,3862,3480,729,1065,4222,5680,5681,1183,3876,226,618,4870,5490,4928,5447],"class_list":["post-8038","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-other","tag-1521","tag-bank","tag-banks","tag-belgium","tag-budget","tag-business","tag-canada","tag-challenges","tag-companies","tag-conference","tag-consumers","tag-corporate-taxes","tag-corporations","tag-customers","tag-debt","tag-decline","tag-economy","tag-election","tag-energy","tag-finance","tag-finance-minister","tag-financial-institutions","tag-fiscal-anchors","tag-flight","tag-france","tag-fuel","tag-government","tag-government-revenues","tag-grain","tag-health","tag-income","tag-income-tax","tag-income-tax-rates","tag-increase","tag-industry","tag-inflation","tag-institutions","tag-mental-health","tag-money","tag-news","tag-opinion","tag-personal-income-tax","tag-policy","tag-president","tag-prices","tag-prime-minister","tag-productivity","tag-raising-taxes","tag-report","tag-revenue","tag-revenues","tag-sectors","tag-shops","tag-spending","tag-strike","tag-tax","tag-tax-hikes","tag-tax-rates","tag-tax-system","tag-taxes","tag-telecoms","tag-theatre","tag-top","tag-wages","tag-wealth-tax","tag-wealthy","tag-youth"],"acf":{"keyphrase":"","keywords":"","sourceimg":"","country-category":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Opinion: New taxes would be a mistake. 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