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Tax Policy and Tax Research in Canada

In: The State of Economics in Canada: Festschrift in Honour of David Slater

Author

Listed:
  • Richard Bird
  • Michael Smart
Abstract
In a survey of tax reform in recent years, Richard Bird and Michael Smart explore the relationship between tax policy and tax research. They conclude that there have been important examples of apparent influences of research on policy. For instance, they are encouraged that the downward pressure on personal and corporate taxes has certainly been supported, if not initiated, by the increasing evidence of distortions caused by high marginal tax rates. In their view, the adoption of the GST can be explained by the acceptance of the federal government of the economic argument that Canada had to switch to a value-added tax to reduce economic distortions. On the other hand, they are disappointed that the equally convincing economic studies of the damage done by poorly-designed excise, property and payroll taxes do not seem to have had any effect. Consequently, they believe that political economy factors were probably the more dominant explanation of the tax reforms than the simple acceptance of advice from economists. Their conclusion is that if economists want to have a greater influence on policy, they need to pay more attention to the issues that motivate policymakers, including, most notably, distributional issues, and they need to write in a way, and in a forum, that will most likely come to the notice of the policy-makers.

Suggested Citation

  • Richard Bird & Michael Smart, 2001. "Tax Policy and Tax Research in Canada," The State of Economics in Canada: Festschrift in Honour of David Slater, in: Patrick Grady & Andrew Sharpe (ed.),The State of Economics in Canada: Festschrift in Honour of David Slater, pages 59-78, Centre for the Study of Living Standards.
    • Handle: RePEc:sls:secfds:04
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    File URL: http://www.csls.ca/events/slt01/bird.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Sergey Sinelnikov & Pavel Kadochnikov & Ilya Trunin, 2008. "From Elections to Appointments of the Regional Governors: Major Challenges and Outcomes," Published Papers 2, Gaidar Institute for Economic Policy, revised 2008.
    2. Emmanuel Saez & Michael R. Veall, 2003. "The Evolution of High Incomes in Canada, 1920-2000," Quantitative Studies in Economics and Population Research Reports 382, McMaster University.
    3. Lori J. Curtis & JoAnn Kingston-Riechers, 2010. "Implications of the Introduction of the Goods and Services Tax for Families in Canada," Canadian Public Policy, University of Toronto Press, vol. 36(4), pages 503-520, December.
    4. Kevin Milligan, 2011. "The design of tax policy in Canada: thoughts prompted by Richard Blundell's `Empirical evidence and tax policy design'," Canadian Journal of Economics, Canadian Economics Association, vol. 44(4), pages 1184-1194, November.

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    More about this item

    Keywords

    Canada; Taxation; Income Tax; Value-Added Tax; Value Added Tax; VAT;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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