Taxing smarter for prosperity Working Paper 7 - March 2005
Ontario can and should tax smarter in order to close the prosperity gap with its peer group of US states. For businesses, this means shifting taxation away from productivity-enhancing investments. For individuals, it means removing high marginal tax burdens on families with low incomes. This is the key conclusion of the seventh working paper, released today by Ontario’s Institute for Competitiveness & Prosperity.
“Smart taxation” creates the right balance between equity, when taxes are paid by those most able to afford them, and efficiency, when the negative impact of taxation on decisions to work, save, and invest is limited. The working paper proposes several options for governments, including closer integration of the tax and benefit system, new ways to encourage investment for retirement – as seniors also face high marginal effective tax burdens – and greater focus on taxation of consumption, instead of earnings or savings.
Martin expressed his hope that, “the working paper helps Ontarians and Canadians think through ways of achieving a smarter tax system. Taxation is a complex issue; we’re proposing some ideas that are worth exploring further because of their potential to contribute to higher prosperity for all.”
