Replica | The weight of the tax burden

The author responds to the column “No, taxes do not harm the economy” by Vincent Brousseau-Pouliot.

I would like to respond to the column by Vincent Brousseau-Pouliot published in The Press of March 19 where he asserts without any nuance that it is false to claim that a heavier tax burden harms the economy. In doing so, he directly criticizes the modest tax cut granted by the Quebec government last year.

The columnist’s analysis is based on rigorous economic studies, but the results of which are valid “on average” and in this case, the average is strongly influenced by a good number of European countries. However, this average lends itself very poorly to the case of Quebec for two fundamental reasons that Mr. Brousseau-Pouliot is completely unaware of.

1. Quebec is not a European country. We belong to a completely different economic space and in this space we occupy the leading position in terms of tax burden. Our main economic partner, the United States, is about forty times bigger than us and we do not share the same currency. It is also much richer than us and offers a much lower tax burden.

Our immediate neighbor Ontario, with which we also do a lot of business, is 1.5 times larger than us while also having a lower tax burden than ours.

Our heavier tax burden weighs on the competitiveness of our businesses and, as a result, they innovate less, invest less and are less productive, which has a direct effect on our standard of living. In short, we are poorer.

2. Vincent Brousseau-Pouliot’s analysis also fails to consider the composition of our tax burden. In North America, we tax more on income and less on consumption (with the GST and the QST in Quebec for example). In Europe, it is exactly the opposite. However, the economic literature is very clear on this subject: the least damaging taxes for the economy are consumption taxes.

Unfortunately, North American Quebec cannot move away from the fiscal balance in force on our continent at the risk of further harming the competitiveness of our businesses.

In Quebec, we have had one of the heaviest tax burdens in our region of the world for almost fifty years and we are among the poorest in this same region.

Obviously, the average is not representative of our particular situation. For my part, I applaud any effort to reduce our tax burden. This is how we will boost our economy and be able to afford all the public services we want, simply because we will be collectively richer.

Read the column “No, taxes do not harm the economy”, by Vincent Brousseau-Pouliot

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