FOR IMMEDIATE RELEASE

26 MARCH 2012

TAX REFORM MUST BEGIN WITH SPENDING CUTS


Halifax: Before we talk about whether taxes are fair, we need to talk about what taxes are for.

This is the message in AIMS’ latest paper, First Things First, by AIMS Director of Research Don McIver.  

“Recent public demonstrations highlighting the unevenness in income distribution – captured by the “we are the 99 percent” slogan – have amplified demands for tax reforms that would produce greater equity while generating revenue,” says McIver.

Before pursuing tax reform, however, McIver argues that the government needs to cut spending and get their priorities in order. “We must first answer two key questions,” says McIver, “what programs and services is government going to fund, and who are we going to buy those services from? Only then should we discuss who to tax to pay for them.”

In First Things First, McIver explains how the tax and spending systems could be restructured to improve efficiency and effectiveness, while simultaneously achieving equity outcomes.

He calls for all levels of government to immediately and cooperatively perform a dramatic review of their spending, and make cuts before they attempt tax reform. “This spending review should ensure that the level of government delivering a service also collects the taxes or fees associated with funding that service,” says McIver. “Boutique tax credits and special exemptions should be eliminated wherever feasible.”

Ultimately, tax and spending reform should seek to make the tax and spending system as simple as possible.

AIMS President Charles Cirtwill explains, “McIver has provided the outline for the long delayed ‘adult conversation’ about taxes. The question is: are Canadians prepared to have it?”

First Things First: Why tax reform must begin with spending restraint can be found online at: ADDRESS

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For more information, please contact:


Don McIver

Director of Research

Atlantic Institute for Market Studies

donmciver@aims.ca

902.429.1143 ext. 226


Paige T. MacPherson

Communications Officer

Atlantic Institute for Market Studies

paigemacpherson@aims.ca

Cell: 902.266.4754


Click here to read the full press release.