曼昆微观经济学chapter.pptVIP

12 The Design of the Tax System Learning Objectives Get an overview of how the Canadian government raises and spends money Examine the efficiency costs of taxes Learn alternative ways to judge the equity of a tax system See why studying tax incidence is crucial for evaluating tax equity Consider the tradeoff between efficiency and equity in the design of a tax system “In this world nothing is certain but death and taxes.”  . . . Benjamin Franklin “In this world nothing is certain but death and taxes.”  . . . Benjamin Franklin Figure 1 Government Revenue as a Percentage of GDP Table 1 Federal and Provincial/State Government Tax as a Percent of GDP Structure of Canadian Government Federalist structure Political power divided between federal government and provincial governments Federal government has the greater power Local and municipal governments are granted powers by the provincial government Structure of Canadian Government Federal government responsibilities Matters of national interest: national defence and foreign policy, international trade, competition policy, criminal law and money and banking Delivery of national social programs, e.g., Employment Insurance (EI) and Canadian Pension Plan (CPP). Has unlimited taxing powers Structure of Canadian Government Provincial government responsibilities Health care, education, welfare, natural resources within their boundaries, and civil law Extensive taxing powers, but less than federal government Account for more than half of activities by the public sector in Canada Structure of Canadian Government Transfers from federal government to provinces Intended help finance provincial programs in health, education and welfare Equalization payments To make it possible for all provinces to provide comparable services to residents The Federal Government Tax revenues The Canadian federal government collects about 45 percent of the taxes in our economy. The largest source of revenue for the federal government is the p