Quote:
Originally Posted by RedHot25
I'm no expert, Firefly, but I think that you may be getting things mixed up a bit?
I believe like Marchare said that a standard level of taxation is used. So each province is based on (in his/her example) a 15% rate, no matter what each individual province's rate is.
Secondly, it is the ability to raise revenue, but the fiscal capacity part is talking about overall I believe...in the sense that after the formula calculations have been done, if your "total revenue" (or fiscal capacity or whatever they call it) is below the "total revenue" of the calculated average I believe of the 5 provinces mentioned earlier in this thread, then you get money. If its above, you chip the difference back in.
Now theoretically, yes a province could raise its tax rates so high...say to 30% in this example...and it might have some overall effect on their revenue, I don't think it is done as a conspiratorial (I know you don't mean it to this extent) means of getting more equalization payments/money...
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It's not that simple though. They don't just say that Province A has the capacity to make 8 billion dollars and Province B can only make 3 so let's even it out. There are ways to adjust your capacity...
You have to realize that BC was only barely a have province and is now barely a have not. It's not like they changed their own taxation formulas drastically. BC is one of the 5 provinces that make up the standard, so when they adjust it adjusts the standard.