June 12, 2011

TAX WHAT YOU DON'T WANT, NOT WHAT YOU DO:

Fixing America's Economy: Nine Ideas from Around the World: Countries as diverse as Germany, Brazil, Singapore, and Thailand can offer ways for the U.S. to shore up its economy (Peter Coy, 6/08/11, Business Week)

From: Canada

Idea: A Worthwhile Tax

With the 2012 Presidential election looming, the idea of springing any new taxes on the American public verges on heresy. But digging out of our fiscal hole will require the government to find ways to increase tax revenues one way or the other. For a start, look north. Unlike the U.S., Canada has a national sales tax—the Goods and Services Tax, currently levied at 5 percent. Consumption taxes such as these are less harmful than a tax on wages and salaries (which discourages work) or a tax on investment (which discourages saving). Livio Di Matteo, an economist at Lakehead University in Thunder Bay, Ont., believes the U.S. could go a long way toward solving its budget problems with a national sales tax and a fatter gasoline tax. "The U.S. is a rich country," he says, "and its deficit situation is more a political rather than economic problem." Consumption taxes might be one "worthwhile Canadian initiative" that's worth a closer look.

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Posted by at June 12, 2011 7:14 PM
  

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