The Pandora Papers were released just last week and they are already having in impact in Canada. The non-profit Canadians for Tax Fairness is pushing the recently elected politicians to get on closing loopholes and exploits that only the rich get to use. All parties support tax reform to address the growing wealth divide in the country, and with the Pandora leak the need for tax reform is clear. Two Canadian celebrity athletes were exposed in the financial papers leak, which has hurt their reputations.
Support for tax fairness in Canada appears overwhelming. Eighty-nine per cent of Canadians want to see a wealth tax of one per cent paid by the richest Canadians as part of the countryâ€™spandemicrecovery, according to a recentAbacus Data pollbased on the NDPâ€™s 2021 platform, and 92 per cent support closing tax loopholes and making it harder for corporations to strategically book profits in tax havens.
â€œThere seems to be universal acknowledgment across the parties that economic inequality is a problem, and it’s a problem that requires government action,â€ said Cochrane.
In ablog postfor C4TF, Cochrane outlined policies the major parties could work together on, based on similarities between party platforms, and identified an excess profits tax as one possibility.
Corporations love keeping their shareholders money instead of contributing to society, and it’s the role of governments to ensure that corporations do their part. Usually this comes in the form of taxation. Multinational corporations create multiple subsidiaries to obfuscate and obstruct the ability of governments to collect tax, it’s the corporate equivalent of dining and dashing.
A recent G7 meeting revealed that the largest economies in the world are going to enact a global minimum taxation rate for corporations. Having an agreed-upon minimum will remove the incentive to corporations to create subsidiaries to avoid taxation, while increasing the wealth of nations.
The rules on making multinationals pay taxes where they operate – known as “pillar one” of the agreement – would apply to global companies with at least a 10% profit margin.
Short-term thinkers who put quarterly profits above all else consistently argue that caring for the environment destroys business. They are wrong. The evidence keeps growing that planet (and people) friendly policies encourage economic growth while also forcing companies to increase their efficiency. It’s a win-win for businesses and the planet.
An Italian team of economists have concluded that by taxing companies, and individual behaviours, that damage the environment create great success for the planet and profits.
Green taxes, or taxes levied on businesses and individuals in order to promote environmentally friendly practices, had the largest impact on multifactor productivity, though De Santis and her colleagues wrote that green taxes need to be paired with complementary redistributive policies, such subsidies and grants for companies transitioning to environmentally friendly practices, in order to avoid damaging productivity.
â€œWhat is clear is that you have to face this increasing environmental policy stringency, and as a firm, probably the best is if you try to create this win-win solution so itâ€™s passed through an improvement in technology,â€ De Santis said.
Historically, the International Monetary Fund (IMF) argued for lower taxes for everyone, particularly those that need it the least: the wealthy. Due to increases in multiple forms of inequality since the last global recession the IMF has changed its tune. The institution now calls for countries around the world to implement a wealth tax while lessening the financial burden on workers through tax breaks. They argue that by doing so we can fend off a global depression.
For individuals, the IMF encouraged slashing payroll taxes as well as cash transfers to help those hardest hit with job losses or other circumstances.
The IMF’s recommendation for a wealth tax marks a stark turnaround for an institution that long pushed tax cuts as a central element of its policy menu for developing nations. It serves as a lender of last resort to countries in dire financial straits.
British Columbia shows carbon pricing works while another province looks uselessly backwards.
The regressive and antidemocratic Ontario “conservative” government is set to sue the Canadian government for protecting the environment. The argument by the Conservatives is basically that an economy allowed to inefficiently consume non-renewable resources is good and that sustainable policy (carbon pricing) is bad. Yes, it’s as ludicrous as it sounds.
Hopefully this wasteful battle between governments ends in the environment’s favour. If Ontario just followed British Columbia’s lead this wouldn’t be an issue and arguably the economy would be in better shape. In B.C. the carbon pricing has reduced emissions while making a more energy efficient economy. Sustainable businesses are seeing growth in B.C. that they wouldn’t see elsewhere.
“This carbon tax is a model for the world that well-designed carbon pricing can be good for the environment and the economy. In the 11 years since B.C. brought in its carbon tax, it’s outpaced the rest of Canada both on emission reduction and GDP growth,” said Stewart Elgie, a professor of law and economics at the University of Ottawa.
In the meantime, numerous researchers have tried to determine the impact of the tax. According to a2015 paper, B.C.’s emissions had dropped by between five and 15 per cent since the tax was implemented, and it had a “negligible impact” on the overall economy.
Elgie, of the University of Ottawa, was part of awide-ranging 2013 studythat showed a 19 per cent drop in B.C.’s per capita fuel consumption in the first four years of the tax, while the province’s economy slightly outperformed the rest of the country.