OECD study fingers Canada for its tax cut agenda

The Financial Post reported today on a new OECD study that shows Canada's legacy of tax cuts only deepens the gap between the rich and the rest of Canadians.

The OECD study, Taxing Wages 07, shows Canada is out of step with many other countries. Of 30 OECD nations, 13 raised taxes and 15 lowered them between 2000 and 2006.

Canada is among the 15 nations that lowered taxes -- but here's the thing: Canada, the U.S. and Australia didn't just lower taxes; they implemented the type of tax cuts that worsen income inequality.

This report is just one more document that shows the folly of Canada's tax cut agenda.

We know that tax cuts don't reach 31% of Canadian taxfilers at all, because their incomes are too low to be taxable.

These Canadians -- one-third of the population -- would get more benefit from governments that invest in public services such as child care, affordable housing, postsecondary education, and public transit. Fittingly, the OECD report also notes that Canadian employers' social security contributions are "far below" the average for industrial countries.

Let's be clear about Canada's history with the tax cut agenda. Tax cutting isn't just about cutting personal income taxes. It's about shifting responsibility for the public into private, individual hands. It's a twisted perversion of the line "ask not what your government can do for you" and instead, leaves Canadians to fend for themselves.

The OECD report gives yet another reason to reflect on the relentless tax cut campaign in Canada. It begs the important and telling question: who benefits from this one-dimensional kind of economic fundamentalism? And who doesn't?

-- Armine Yalnizyan