a 1991 Statistics Canada study on the origins of the debt found that only 2% of the debt was caused by social programs. If the debt did not come from social programs, where did it come from?
Canada's tax system has changed significantly since the mid-1970's, increasing the amount of taxes paid by middle class and poor individuals and decreasing the amount paid by corporations and wealthy individuals. Canada also now relies more on sales taxes that are paid equally by rich and poor people (i.e. the GST). Similarly, user fees for services introduced by the government of Ontario will be paid equally by rich people and poor people
Statistics Canada identified that tax breaks to Corporations and Wealthy individuals contributed to 50% of the debt. Due to tax policy changes (tax breaks, benefits and loopholes), corporate tax rates in Canada have declined since the mid-1970's. For example, in the mid 1960s, corporate income tax provided 20% of federal government revenue - but it was 7% of government revenue in 1994. This corporate taxation rate is lower than for all G-7 countries, including the United States, and lower than the G-7 average of 10%.
As corporate taxes fell, personal income tax rose from 32% to 50% of federal revenue. In addition, personal income taxes have not been paid proportionately by wealthy Canadians. For example, in 1992, there were 98,347 Canadians with incomes of $100,000 or more who paid absolutely no income tax.
High Unemployment
The impact of unemployment on the debt in Ontario is seen in the shift from a budget surplus in 1988/1989 to a $12B deficit in 1992. This is deficit increase was linked to the rise in the unemployment rate from 5.1% in 1991 to 10.9% in 1992
Canada's tax system has changed significantly since the mid-1970's, increasing the amount of taxes paid by middle class and poor individuals and decreasing the amount paid by corporations and wealthy individuals. Canada also now relies more on sales taxes that are paid equally by rich and poor people (i.e. the GST). Similarly, user fees for services introduced by the government of Ontario will be paid equally by rich people and poor people
Statistics Canada identified that tax breaks to Corporations and Wealthy individuals contributed to 50% of the debt. Due to tax policy changes (tax breaks, benefits and loopholes), corporate tax rates in Canada have declined since the mid-1970's. For example, in the mid 1960s, corporate income tax provided 20% of federal government revenue - but it was 7% of government revenue in 1994. This corporate taxation rate is lower than for all G-7 countries, including the United States, and lower than the G-7 average of 10%.
As corporate taxes fell, personal income tax rose from 32% to 50% of federal revenue. In addition, personal income taxes have not been paid proportionately by wealthy Canadians. For example, in 1992, there were 98,347 Canadians with incomes of $100,000 or more who paid absolutely no income tax.
High Unemployment
The impact of unemployment on the debt in Ontario is seen in the shift from a budget surplus in 1988/1989 to a $12B deficit in 1992. This is deficit increase was linked to the rise in the unemployment rate from 5.1% in 1991 to 10.9% in 1992
