CCPA: Tax cuts causing Canada to fall behind other OECD nations

The Canadian Centre for Policy Alternatives (CCPA) has released a study entitled The Social Benefits and Economic Costs of Taxation: A Comparison of High- and Low-Tax Countries by Neil Brooks and Thaddeus Hwong.

According to the CCPA:

This important new study compares high-tax Nordic countries and low-tax Anglo-America countries on 50 social and economic measures and finds the high-tax Nordic countries score better in 42 categories. In short, tax cuts are disastrous for the well-being of a nation's citizens.

The news release for the study appears below. The complete study can be downloaded from the CCPA web site at http://www.policyalternatives.ca

FOR IMMEDIATE RELEASE
DECEMBER 6, 2006

Taxes are good for a nation's health and well-being -- study

OTTAWA--Canada is falling behind a number of OECD nations in a wide range of social and economic areas, and a study released today by the Canadian Centre for Policy Alternatives points to tax cuts as the culprit.

The study, by Neil Brooks and Thaddeus Hwong, compares high-tax Nordic countries and low-tax Anglo-American countries on 50 social and economic measures and finds the high-tax Nordic countries score better in 42 categories.

According to the study, tax cuts are disastrous for the well-being of a nation's citizens. For example, the high-tax Nordic countries have:

- lower rates of poverty, more equal income distribution, and more economic security for their workers;
- a higher GDP per capita;
- higher rates of household saving and net national saving;
- greater innovation, including a higher percentage of GDP spent on research and development;
- a higher ranking on their growth competitiveness by the World Economic Forum;
- higher rates of secondary school and university completion; and
- less drug use, more leisure time, and higher life satisfaction.

"By cutting taxes the Conservative government is taking Canada in the wrong direction," says Brooks. "It wants to make Canada more like the United States, yet our findings show that Americans bear severe social costs for living in one of the lowest taxed countries in the world."

The U.S. falls near the bottom of the 21 industrialized countries in a strikingly large number of social indicators. It also ranks as the most dysfunctional country by a considerable margin.

In contrast, Finland ranks near the top of the industrialized world in most of the social indicators and has been named the most competitive country in the world by the World Economic Forum four years in a row.

"The tax cut lobby has it backwards," says Hwong. "Not only do government social programs create a healthier society, they also create the conditions for a vibrant and competitive economy."