Microeconomics,, 16th Canadian Edition

Taxation and Efficiency The tax system influences the allocation of resources by altering such things as the relative prices of ...

The Two Burdens of Taxation A tax normally does two things. It takes money from the taxpayers, and it changes their behaviour. T ...

Figure 18-2 Direct and Excess Burdens of an Excise Tax The allocative inefficiency of a tax is measured by its excess burden. Th ...

is no allocative inefficiency; the cost of raising $10 a month for the provincial government is just the $10 a month that you pa ...

Figure 18-3 Direct and Excess Burdens of an Income Tax supply any given amount of labour services only if the pre-tax wage is in ...

creates an excess burden. As with the case of excise taxes, the revenue collected by the tax understates the total cost of the t ...

Figure 18-4 A Laffer Curve labour is relatively inelastic with respect to the real wage. Figure 18-3 shows that an income tax do ...

Increases in income-tax rates beyond some level will decrease rather than increase tax revenues. The curve relates the governmen ...

debates, one side will often cite the logic of the Laffer curve, arguing that a reduction in tax rates will lead to such an incr ...

Table 18-2 Expenditures by Canadian Governments, 2017 18.3 Public Expenditure in Canada Spending by the consolidated public sect ...

Canadian governments together spend an annual amount equal to 40 percent of GDP; almost half is for transfers of various kinds. ...

Another kind of expenditure is the interest payments that governments make every year on their outstanding stock of public debt. ...

Table 18-3 Government Transfer Payments to Individuals, 2017 ...

(www.statcan.gc.ca.)Source: Adapted from Statistics Canada, “Government Transfer Payments to Persons,” ...

Canadian “Fiscal Federalism” Canada is a federal state with governing powers divided between the central authority and the ten p ...

Edward Island and Nova Scotia are below the average. Ontario is slightly below the national average of about $59 000 per person. ...

defence is normally delegated to the central government because it provides benefits to all residents of the country. At the oth ...

Intergovernmental Transfers Canada’s system of fiscal federalism requires transfers between various levels of government. Some o ...

accommodate the rapidly growing demands on Canada’s public healthcare system. In 2018–2019, the total CHT payment was $38.6 bill ...

Canadian Social Programs Table 18-2 shows that government spending on health, education, and other social services represents ro ...