Taxation and economic development

My TJ column this week discusses the proposed tax changes in New Brunswick. In a nutshell, I believe that the government should control spending – within the rate of inflation, try to keep corporate and personal income taxes competitive with other Canadian provinces (even if it means slightly higher consumption taxes) and strategically use tax policy to incentivize specific behaviours.

There will always be jursidictions that have lower tax environments. Applying a “how low can you go” approach to tax policy doesn’t make sense in New Brunswick’s context. If we were awash in cash, it would.

Don’t forget there are something like a dozen U.S. states that do not charge any personal income tax at all. And Nevada, where my brother lives, doesn’t charge any sales tax either. No income tax. No sales tax.