I don't necessarily think that we are over taxed. We still have pretty good productivity, savings rates are better than in the U.S. where taxes are quite lower, and our economy is running as efficiently as it ever has. There isn't alot of economic data indicating that the tax burden is creating abnormal inefficiencies.
With that said, I think that the federal government is occupying too much tax room and that the provinces need more direct revenue. The federal government would be wise to cede tax room to the provinces as program costs that are provincial responsibility are rising much higher than their revenue potential.
The federal government is encroaching on provincial jurisdiction which could be either a good or a bad thing. The latest infrastructure funding to the cities, tax rebates on public transit and this big dollop to PSE are all examples of that. It really remains to be determined how effective these program expenditures will be.
|
