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Unemployment rate indexing of income tax rate

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  • Unemployment rate indexing of income tax rate

    NOTE: THIS IS NOT ABOUT CURRENT GOVERNMENT TAXATION PROPOSALS...

    An idea:

    Set regional indexing of federal (and/ or provincial) income tax based on local rates of unemployment.

    Reason:

    Tax regions that are doing well in terms of employing people a bit more and tax people within regions where unemployment is high to control inflation in one case and stimulate the economy in another.

    May be an alternative to federal equalization payments.

    Discuss...

  • #2
    for some reason I thought this may generate some discussion... Maybe I should have added a poll. Everybody loves a poll

    Comment


    • #3
      Maybe go here?
      http://www.easypolls.net/poll.html?p...b092a588114bc0

      I promise to update the results

      Comment


      • #4
        Nice to see some creativity! People are getting tired of old solutions that don't work being forever foisted upon them.

        It's high time that we all start thinking outside of the box. Thanks!
        Last edited by KC; 12-12-2015, 06:30 AM.

        Comment


        • #5
          Originally posted by grish View Post
          NOTE: THIS IS NOT ABOUT CURRENT GOVERNMENT TAXATION PROPOSALS...

          An idea:

          Set regional indexing of federal (and/ or provincial) income tax based on local rates of unemployment.

          Reason:

          Tax regions that are doing well in terms of employing people a bit more and tax people within regions where unemployment is high to control inflation in one case and stimulate the economy in another.

          May be an alternative to federal equalization payments.

          Discuss...
          one of the concerns with this would be trying to connect the place of employment and the tax jurisdiction. how would you tax someone who lives in edmonton but may work throughout the province over the course of a year who would have lower and/or higher unemployment rates than edmonton or someone who works in fort mcmurray but whose place of residence and tax jurisdiction is newfoundland and labrador? would it make a difference if the employer was located in a high or low unemployment jurisdiction? what about employers who have employees in multiple jurisdictions doing the same job and possibly moving between them?
          "If you did not want much, there was plenty." Harper Lee

          Comment


          • #6
            The problem I see is that income tax rates pertain to the person. I'm not sure why someone who is fortunate enough to retain highly paid employment during a period of high general unemployment should be rewarded even further. And I say this against interest because under this scheme my taxes would definitely go down.

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            • #7
              I think the answer to Ken and Eve is that as it is, we have some people who reside in one place and have employment in another thus potentially benefiting from or suffering from a different provincial tax rate. also, as it is, those who live in provinces with high economic output indirectly pay higher taxes through transfer payments.

              Under this system, like all systems, being directed at entire populations of taxpayers, the individual nuanced cases will be just exceptions... The system would function as intended when whole population is considered.

              Comment


              • #8
                What I don't understand is how your proposal would replace federal equalization payments.

                Currently, all Canadians pay the same rate of federal income tax. Albertans collectively are net contributors to equalization because our average incomes are higher not because we pay a higher rate of tax on the same amount of income.

                Your proposal would create new inequities much worse than existing equalization rules. Lower income taxpayers in provinces with low unemployment would end up paying more federal tax than higher income taxpayers in provinces with high unemployment. How would that be fair?

                Comment


                • #9
                  Originally posted by grish View Post
                  I think the answer to Ken and Eve is that as it is, we have some people who reside in one place and have employment in another thus potentially benefiting from or suffering from a different provincial tax rate. also, as it is, those who live in provinces with high economic output indirectly pay higher taxes through transfer payments.

                  Under this system, like all systems, being directed at entire populations of taxpayers, the individual nuanced cases will be just exceptions... The system would function as intended when whole population is considered.
                  it might "function as intended" but that still doesn't address the fact it won't work as intended. those are two different things. if you want to augment the current transfer payments at the federal level and the ability of individual provinces - and even cities although to a much lesser level - to adjust taxation and benefits based on local circumstances, you would be better off instituting a minimum income that would benefit only those who need it and none who don't regardless of where they live or what their neighbor earns.
                  "If you did not want much, there was plenty." Harper Lee

                  Comment


                  • #10
                    ^ the intended taxation is to act as a mechanism to stimulate economies that struggle by providing more disposable income and to keep in check economies that overheat. I think that should happen.

                    Equalization payments augment taxation revenues in have-not provinces. That means that part of a have province's revenues leaves that province to go to another. If canadians pay different tax rates based on unemployment, the portion of taxation revenue would go from "have" province to a have not province to augment taxation revenue in another. I get your argument that while the rate is the same the income is different... It is definitely something to consider as a reasonable vote against my suggestion...

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