TORONTO, Sept. 20 /CNW/ - Canada has made slow but steady progress in
improving its tax system, yet the effective tax rate on new business
investment remains 11th highest in the world, according to the C.D. Howe
Institute's 2007 Tax Competitiveness Report: A Call for Comprehensive Tax
Written by Jack Mintz, Professor of Business Economics, Joseph L. Rotman
School of Business, University of Toronto, and Fellow-in-Residence, C.D. Howe
Institute, the report ranks 80 developed and developing countries according to
their effective tax rates on capital for new business investment. As part of
bold reforms, Mintz suggests that all businesses should be taxed at a common
rate, equivalent to the small business rate - roughly 20 percent. Reductions
in the current corporate rate could increase corporate tax revenues for
government, as Canadian and foreign multinationals shifted fewer costs into
Canada and fewer profits out.
The complementary part of a reform program would shift taxes toward
consumption. Broadening the existing federal-provincial fuel excise tax base,
to include other energy sources, would deliver a low-rate, broad-based,
consumption-based environmental tax that put a price on environmental damage.
The 2007 Tax Competitiveness Report: A Call for Comprehensive Tax Reform
is available at http://www.cdhowe.org/pdf/commentary_254.pdf.
For further information:
For further information: Jack Mintz, Professor of Business Economics,
Joseph L. Rotman School of Business, University of Toronto, and
Fellow-in-Residence, C.D. Howe Institute, (416) 978-2451; Finn Poschmann,
Director of Research, C.D. Howe Institute, (416) 865-1904