Inflation is making you pay more taxes: yesterday’s thresholds for today’s dollars – Globe and Mail
There’s been rampant inflation in Canada since early 2021. And while money losing its purchasing power hurts on its own, tax provisions that ignore inflation can multiply the pain for Canadians.
Inflation interacts with various tax provisions, often increasing their bite, with little transparency or legislative oversight. This happens in many ways, notably when prices and incomes rise, but the thresholds for determining tax payable and tax credits do not.
For example, if income tax brackets do not rise with inflation, people whose wages have simply grown with inflation can get inadvertently pushed into higher-taxed categories – even when the real value of their wages has not changed.
Some of these interactions…
Fitch’s recent downgrade of U.S. public debt, dropping it one notch below “AAA,” is good reason to examine the relationship between U.S. debt and the dollar’s future as a reserve currency. The greenback is just the latest in a series of preferred currencies that have been used for foreign exchange reserves and to denominate other assets. But reserve currencies, unlike diamonds, aren’t necessarily forever, and that affects their issuers’ capacity to manage their public debt.
The British pound was the world’s reserve currency in the 19th and early 20th centuries, with a typical exchange rate a century ago of around US$5, vs. US$1.25 per pound today. The pound faded after 1945 because of Britain’s massive war debts, the…
Our national “productivity gap” has spurred analyses, reports and media articles for decades. While public debate in Canada has focused on productivity improvement for more than 50 years, we have made limited progress. Fresh thinking is required.
While innovation through research and development (R&D) is certainly important to productivity growth – and has preoccupied the federal government over the past half-century – there is also a connection between firm size and productivity. The larger the firm, the more productive it typically is. Logically, then – and the research supports this proposition – one way to increase our productivity is to increase the size of our companies from small and medium to large. Something we have…
