Chapter 12 The Design Of the Tax System
Gain an overview of how Canadian Gov't raises and spends money.
Examine efficiency costs of taxes.
Learn alternative ways to judge the equity of a tax system.
See why studying tax incidence is crucial for evaluating tax equity
Consider tradeoff between efficiency and equity in the deisgn of a tax system.
Financial Overview of Canadian Governments
economy's income has grown and governments have grown even more.
Canada has federalist structure= political power is divided between federal provincial and territorial gov't
with more power going to federal gov't.
BNA sets out responsibilities of the fed and prov and territorial gov'ts.
fed: national interest. Pension Plan (Canada's national social programs)
provinces & territories: health care, education, welfare, natural resources, civil law, natural resources.
Local gov't: cities, towns, and municipalities are creatures of provinces.
Federalist Canadian government: Role of transfers from federal to provinces and territories. Federal
system influences provincial and territorial programs thru "power of the purse"
Transfer systems: CST (education, social services and Canada health transfer.
Equalization payments: federal gov't provides services to provinces who do not have services other
provinces have. Provinces who do not have equalization payments: Alberta, Ontario, BC.
The Federal Government