Op-Eds
Federal tax hikes on banks and insurers risk causing broader economic damage – Globe and Mail Op-Ed
Taxes are a necessary evil. Necessary, because we must fund government services. Evil, because they do damage beyond the cost to those who pay them – discouraging work and saving, misallocating where our scarce resources go, and encouraging underground activity. The federal government’s coming levies on banks and insurers – a corporate income surtax and the “Canada Recovery Dividend” – don’t even qualify as “necessary.”
These taxes were part of the Liberal campaign platform for last year’s federal election. The platform committed to raising the corporate income tax rate on bank and insurer profits above $1-billion from the 15 per cent other businesses pay to 18 per cent. It also proposed the Canada Recovery Dividend: a…
Inflation around 8 per cent is something many Canadians had never experienced until this summer. As a country, we are rediscovering how much inflation hurts. The shrinking value of our dollars is bad enough on its own, but inflation harms us in more subtle ways, including through its interactions with taxes and government benefits. Now would be a good time for some changes to lessen the pain.
Below are several examples.
When personal income tax thresholds and benefits are fixed in dollar terms, inflation pushes workers into higher tax brackets even when their real incomes do not rise. Some tax thresholds are indexed to inflation, but others are not.
Alberta, for instance, has just announced it will resume indexation…
Prices are rising and stock markets are falling — a toxic combination, especially for older Canadians who rely on savings in registered retirement saving plans (RRSPs) and defined-contribution pension plans, and who are drawing down savings in registered retirement income funds (RRIFs) and Life Income Funds (LIFs).
Many will now want to save more, to alleviate their risk of running out of money before they die. At the very least, Canadians over 71 should not face tax rules that force them to sell when the market is down, permanently lowering their prospects for retirement.
Instead of exacerbating their problems the federal government should help solve them.
To begin with, retirees need a break on mandatory RRIF…
Ça, étant une inflation persistante et généralisée, que les banques centrales doivent écraser par une hausse accélérée des taux d’intérêt, au risque élevé de récession ! Ça, expliquant l’humeur massacrante en Bourse.
« We fought the last war. » On s’est battu comme si on livrait la guerre précédente, explique Jason Furman, professeur à Harvard et ex-conseiller économique du président Obama. Erreur classique des généraux obnubilés par le dernier conflit, en l’occurrence celui de la grande crise financière de 2007-2008.
La grande récession qu’elle a engendrée fut des plus longues, car il a fallu désendetter le secteur privé et recapitaliser le système bancaire. On a aussi blâmé les gouvernements pour la…
With inflation on the rise, the Bank of Canada kicked its tightening cycle into high gear Wednesday by announcing a 50-basis-point increase in its target for the overnight rate — the first non-25-basis-point hike in over 20 years. It also modified its stance concerning its over-sized holdings of Government of Canada bonds, which swelled its balance sheet during so-called Quantitative Easing (QE). Those days are over: it will now initiate Quantitative Tightening, or QT, by not replacing bonds on its balance sheet as they mature, thus reducing its bond holdings over time.
Some might be disappointed the bank didn’t go further on QT by announcing it would actually start selling its holdings of government bonds. Not to worry.…
