The fourth chapter, by Susan Van Der Hout, reviews the application of the GAAR ... competitor's are Quebec and Manitoba, but given the relatively small ... sick; to lower the administrative costs of group insurance, payroll systems can be used to ..... very different results about the company's effective tax rate on book income.
Current Tax Reading Co-Editors: David Duff, Tim Edgar, Glenn Feltham, and Alan Macnaughton*
Harry Erlichman, ed., Tax Avoidance in Canada: The General Anti-Avoidance Rule (Toronto: Irwin Law, 2002), 309 pages, ISBN 1-55221-060-X
This is a particularly timely book because a number of income tax cases have considered the general anti-avoidance rule (GAAR) in section 245 of the Income Tax Act,1 but the Supreme Court of Canada has yet to address the provision. Written by a number of contributors, the book consists of five chapters and three appendixes (which reproduce the text of specific anti-avoidance rules and the GAAR) and provides a valuable reference for future considerations of the GAAR. The first chapter, written by four lawyers at the Tax Law Services Section of the Ontario Regional Office of the federal Department of Justice, examines “The Statutory Context of the GAAR”—reviewing the rationale for the GAAR as expressed in the 1987 white paper2 when the rule was first announced, the intended scope of the GAAR as expressed in Department of Finance technical notes and the GAAR circulars,3 and the difference between the GAAR and provisions that are directed at tax evasion or that impose civil penalties. The final section of the chapter examines the concept of a taxpayer’s “purpose” in the context of section 245 and other tax provisions. Curiously absent from the chapter is any discussion of the crucial “misuse or abuse” test in subsection 245(4). The second chapter, written by Brian Arnold and entitled “Ref lections on the Relationship Between Statutory Interpretation and Tax Avoidance,” is a reprint of an article published in the Canadian Tax Journal over a year ago.4 Tracing the historical connection between the strict construction of taxing statutes and formalist approaches to tax avoidance, Arnold argues that the rejection of strict construction in Stubart Investments Limited v. The Queen5 should have caused Canadian courts to
* David Duff is of the Faculty of Law, University of Toronto. Tim Edgar is of the Faculty of Law, The University of Western Ontario, London, and a senior research fellow, Taxation Law and Policy Research Institute, Deakin University, Melbourne. Glenn Feltham is of the College of Commerce, The University of Saskatchewan. Alan Macnaughton is the holder of the KPMG professorship in accounting at the University of Waterloo. The initials below each review indicate which of the four co-editors authored the review.
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re-examine the key principles set forth in Inland Revenue Commissioners v. Westminster (Duke):6 that a taxpayer’s motive or purpose is irrelevant to the assessment of tax and that tax consequences should turn on the legal substance of transactions rather than on their economic substance. Of course, that the decision in Stubart did not take this step is the reason why the GAAR was enacted in 1988. Therefore, Arnold concludes, it would be inappropriate for the Supreme Court of Canada to reaffirm the Westminster approach in its interpretation of the GAAR. The third chapter, on tax avoidance in the United Kingdom, was written by Ian Roxan, a transplanted Canadian who teaches tax law at the London School of Economics. Divided into two parts, the chapter examines specific proposals for the introduction of a statutory GAAR in the United Kingdom and the leading taxavoidance cases following the watershed case of W.T. Ramsay v. Inland Revenue Comrs.7 On the subject of statutory GAAR proposals, Roxan concludes that their rejection turned less on conceptual challenges than on “problems of the environment into which a GAAR would have to fit in the UK: the lack of a well-established rulings system, combined with a surprising amount of conceptual foundation from the judicial Ramsay doctrine that provided both a framework and a limitation for a UK GAAR.”8 With respect to judicial developments in the United Kingdom, Roxan emphasizes that the “step transaction” doctrine developed in Ramsay looks to the “legal substance” of composite transactions rather than their economic substance or commercial form. While this approach “reduces the risk that application of the Ramsay doctrine will re-describe the composite transaction in a wholly artificial way” and “prevent[s] established rights . . . from being disturbed,” Roxan concludes that “it gives the taxpayer much more opportunity to define the legal substance of his own transaction . . . and becomes a much less valuable tool for identifying unacceptable tax avoidance.”9 The fourth chapter, by Susan Van Der Hout, reviews the application of the GAAR in judicial decisions made before 2002. Largely descriptive, the chapter summarizes the facts and reasons in GAAR cases from Michelin Tires (Canada) Ltd. v. MNR10 and McNichol et al. v. The Queen11 to OSFC Holdings Ltd. v. The Queen12 and The Queen v. Canadian Pacific Limited.13 Although emphasizing that the decisions are factually driven and “maddeningly unpredictable,” 14 the author attempts to draw “preliminary conclusions . . . regarding how the GAAR will be applied.”15 Perhaps most significantly, Van Der Hout concludes that “[i]t is unlikely that the Supreme Court, which has adopted a ‘plain meaning’ approach to statutory interpretation, will find justification for departing from that approach in interpreting the language of the GAAR.”16 While Van Der Hout appears to concur with Brian Arnold in this prediction, Arnold emphasizes that the Supreme Court’s plain meaning approach to statutory interpretation would be contrary to the language and purpose of the GAAR. The final chapter, written by James Wilson and Jillian Welch, considers the possible role of the GAAR in the interpretation of Canada’s tax treaties. The bulk of the chapter provides an impressive review of the different approaches that Canadian courts have adopted in interpreting tax treaties, the Income Tax Act in general, and the GAAR. The authors conclude that the purposive approach to treaty interpretation
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affirmed in The Queen v. Crown Forest Limited et al.17 makes it unlikely that a treaty entitlement could constitute a misuse or abuse of the Income Tax Act, as required by subsection 245(4). On this basis, the authors suggest that “while the question whether the GAAR overrides Canada’s tax treaties is a perplexing and open one that will not be answered soon, the answer may not be that important.”18 Nonetheless, they affirm that although “a strong case can be made that the GAAR should override the treaty provision in cases where the GAAR and a tax treaty are in real conf lict,”19 a “better case” can be made that it should generally not.20 D.D. Alejandro Esteller-Moré and Albert Solé-Ollé, “Tax Setting in a Federal System: The Case of Personal Income Taxation in Canada” (2002) vol. 9, no. 3 International Tax and Public Finance 235-57
The purpose of this paper is to explain the variations in average provincial personal income tax rates from 1982 to 1996. The authors statistically relate changes in these tax rates to changes in the federal tax rate, the tax rate of competing provinces, and the standard equalization rate. Competing provinces are generally defined as those that share borders, the exception to this being the Atlantic provinces, which are considered to be in competition with each other and Quebec. The degree of competition is measured by the population and the inverse of distance; thus, Ontario’s competitor’s are Quebec and Manitoba, but given the relatively small population of Manitoba and the large distance between Toronto and Winnipeg, the competitive effect of Quebec on Ontario is considered to be much greater. The authors’ main finding is that provincial tax rates rise and fall with those of competing provinces, but the effect of the f luctuations depends on whether a province receives equalization payments. A 1 percentage point increase or decrease in the competing provinces’ tax rates causes a province to change its tax rate in the same direction by about three-tenths of 1 percentage point if it does not receive equalization, but only by half as much if it is an equalization recipient. Thus, equalization-receiving provinces have reduced incentives to compete with other jurisdictions in tax rate adjustment. Tax-competition sensitivity varies from province to province. For example, Ontario is particularly sensitive to tax competition: a 1 percentage point change in Quebec’s tax rate leads to a 1 percentage point reaction in Ontario’s tax rate, which is more than three times the average effect noted above. However, the response of Quebec’s tax rate to changes in Ontario’s tax rate is much less pronounced and is similar to the tax adjustments in other equalization-receiving provinces. The authors suggest that the formula used to determine equalization payments may explain why tax competition depends on whether the province receives equalization payments. Roughly speaking, the equalization program provides that if a province has a tax base below the threshold of a standard tax base, the equalization payment that the province receives is the average tax rate of the entire federation multiplied by the difference between the standard tax base and the province’s tax
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base. Thus, if a competing province’s tax rate increase causes a province’s own tax base to decline, the revenue losses will be partly cushioned by the resulting increase in equalization payments. Similarly, if a province lowers its tax rate in order to attract some of the tax base from other provinces, the resulting gains in its tax base will cause its equalization payments to decline. A.M. François Vaillancourt and Mathieu Turgeon, “Highway Revenues and Expenditures in a Federal Setting: A Canada/United States Comparison,” in Proceedings: Ninety-Third Annual Conference on Taxation (Washington, DC: National Tax Association, 2001), 25-31
Canada-US trade has increased greatly since the enactment of the North American free trade agreement (NAFTA) in 1989. This study compares highway revenues and expenditures since 1989 with a view to determining whether the increase in trade can be sustained in the long run with the existing highway infrastructure. The authors find that American governments spend 1.6 times more per user than Canadian governments spend. They also find that the Canadian federal contribution to highway spending is much lower than that of the US federal government— 4 percent as opposed to 20 percent. Nevertheless, the Canadian average tax rate on gasoline is nearly 1.5 times that of the United States (although diesel fuel tax rates are similar in the two countries). This contradiction between Canadian and American relative expenditures and revenues can be explained by the fact that US spending is not fully funded by revenues from users, while in Canada the situation is reversed—not all user revenue is spent on highways. The authors conclude that Canadian highways will need to be upgraded through higher expenditures if current trade levels are to be sustained. They suggest an increase in provincial diesel fuel tax rates because trucks produce a disproportionate amount of wear and tear on highways. A.M. Mark Stabile, “The Role of Tax Subsidies in the Market for Health Insurance” (2002) vol. 9, no. 1 International Tax and Public Finance 33-50
The taxability of employer-paid health and dental insurance premiums is a highly relevant policy issue because in the mid-1990s it was widely rumoured that the federal government was considering making employer-paid coverage a taxable benefit, a policy Quebec employs for provincial tax purposes. This paper contributes to the policy debate surrounding the taxability of employer-paid coverage by providing statistical evidence demonstrating that the tax subsidy available to employerprovided supplemental health insurance disproportionately affects small firms (fewer than 20 employees), and that the removal of this subsidy would cause the level of insurance provided by smaller firms to decline by about one-half relative to the current level.
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The author’s argument is based on an analysis of the reasons for providing employer-paid insurance as opposed to the purchase of individual policies. Three reasons have been suggested: purchase through a firm allows an insurance company to pool risks and avoid the chance that those buying the coverage will be especially sick; to lower the administrative costs of group insurance, payroll systems can be used to keep track of individual contributions; and a tax subsidy is available for employer contributions due to the lack of a taxable benefit. The author argues that the pooling and administrative advantages are more pronounced for larger firms, whereas the availability of the tax subsidy is the only motivation for smaller firms—the data support this argument in that smaller firms are much less likely to provide coverage. Currently, more than two-thirds of the Canadian population receives supplemental health insurance (medical or dental) through an employer.21 But a closer look at the data indicates that only 24 percent of workers in firms with fewer than 20 workers receive supplemental coverage, while 79 percent of workers in firms with more than 500 employees receive supplemental health insurance.22 Hence, one would expect that in the absence of tax subsidies, bigger firms would still provide health insurance, while smaller firms would likely suspend such coverage. The paper’s statistical analysis is based on Statistics Canada’s Canadian Labour Force Survey, which provides data for almost 16,000 workers. The dependent variable explained in the logit analysis is whether the worker has employer-provided health coverage, while the key independent variables are the size of the employee’s firm and the after-tax cost of $1 of health insurance. To calculate this last variable, the authors calculate the marginal tax rate for each employee and then take into account Quebec’s provincial tax inclusion of a taxable benefit for employer-provided health insurance. The variable, which is thus an inverse measure of the tax subsidy, varies much more than one might expect—58 cents in Ontario, 74 cents in Alberta, and 82 cents in Quebec.23 Simulations using the estimated logit equation show, as mentioned above, that eliminating the tax subsidy would cause the proportion of smaller firms offering health coverage to decline by about one-half. Compared with firms in other provinces, firms in Ontario, where the current tax subsidy is the largest, would be affected the most. Further simulations show that the decline in the number of small firms offering health coverage would not be balanced by an increase in the number of employees seeking private insurance, resulting in an increased proportion of individuals who are uninsured. A.M. Ann Mumford, Taxing Culture: Towards a Theory of Tax Collection Law (Aldershot, UK: Ashgate, 2002), 317 pages, ISBN 1-84014-710-5
The inspiration for this book is the United Kingdom’s introduction in the late 1990s of a self-assessment system for the collection of income tax, such as that which has existed in Canada and the United States since the inception of the
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income tax in these countries. Curious about the implications of this important reform for the politics and structure of income taxation in the United Kingdom, the author embarks on a sweeping inquiry into comparative “taxing cultures” in the United States and the United Kingdom. For this purpose, the author reviews procedures for the collection and enforcement of income tax in the United States and the United Kingdom (chapter 4), the legal and constitutional foundations for the imposition of income tax in both countries (chapter 5), the manner in which tax statutes are drafted in each country (chapter 6), the differing approaches to tax avoidance (chapter 7), and selected issues in the enforcement and design of income taxes in the United States and the United Kingdom (chapter 8). Throughout the book, the author adopts a “critical, cultural approach” to the subject at hand,24 suggesting that methods of imposing and collecting tax in each country both ref lect and construct different cultures through which taxes are understood. This is an interesting and important point, and it calls into question the piecemeal importation of specific features of another country’s tax system without careful attention to its compatibility with other elements of a country’s “taxing culture.”25 Unfortunately, the task of comparative legal and cultural analysis is enormous, and it is often difficult to find the common thread that runs through the various issues that the author chooses to address. Nor is this reviewer particularly satisfied with the author’s conclusion that [i]t has not been possible to produce a simple answer to the question whether selfassessment will “work” in the UK, particularly if it is introduced on a far wider scale than currently envisaged. Rather, this study has attempted to show that that question is a far more wide-ranging one than is acknowledged. More importantly, it has tried to establish that laws surrounding the collection of tax provide a fertile area of study for public lawyers, legal historians and sociolegal scholars.26
Fine and well, but one might hope for something more from such an extensive survey. D.D. Kevin Milligan, “Tax-Preferred Savings Accounts and Marginal Tax Rates: Evidence on RRSP Participation” (2002) vol. 35, no. 3 Canadian Journal of Economics 436-56
Participation in registered retirement savings plans (RRSPs) has increased tremendously over the last 30 years, making RRSP participation a success. Measuring participation as the number of tax filers making an RRSP contribution divided by the proportion of Canadians with employment income, participation has risen steadily from 2.4 percent in 1968 to 46.0 percent in 1996.27 The author attempts to explain this time trend statistically by using a series of annual cross-sections from Statistics Canada’s Family Expenditure Survey from 1982 to 1996. The most important variable in the author’s statistical analysis is the marginal tax rate, which is still relatively insignificant in that a 10 percentage point
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increase in the marginal tax rate increases the probability of contributing to an RRSP by only 8 percent. Overall, all of the model’s variables can explain only about 5 percent of increasing RRSP participation during the studied time period. How can the other 95 percent of the increased participation be explained? The author speculates that the increase could be a result of the desire of many Canadians to increase savings in order to offset decreases (or anticipated decreases) in other sources of retirement income, such as government benefits or employer-provided pension coverage. Alternatively, the diffusion of information about the tax benefits of RRSP contributions may take time to reach all eligible Canadians. The federal government’s recent practice of sending out reminders with an individual’s notice of assessment of available RRSP room may be having some effect, although this is impossible to tell without survey data that relate to participation motivation. Interestingly, the author also finds that participation in registered pension plans increases the probability of participation in RRSPs, a fact that suggests that individuals do not regard registered pension plans and RRSPs as substitutes, and hence raises doubts about the government policy of having an integrated set of limits for all types of retirement savings. However, this counterintuitive finding may simply be a result of variations in a household’s unobserved determinants of the propensity to save. In an interesting sidelight, the author also considers the effects of allowing the carryforward of RRSP room. As one would expect, the introduction of the carryforward caused an end to the “use it or lose it” philosophy of RRSP contributions and hence caused those who have higher expected future marginal tax rates to be much less likely to contribute to RRSPs. A.M. Jack Mintz and Michael Smart, “Tax-Exempt Investors and the Asset Allocation Puzzle” (2002) vol. 83, no. 2 Journal of Public Economics 195-216
Standard theories in finance suggest that tax-exempt investors (such as RRSPs or pension funds) should hold only bonds while taxable investors should hold only equities. The authors of this article argue that this standard theory may be misguided because it does not consider that capital losses may not produce any tax saving because they are only deductible against capital gains. This is a common situation; Canadian data show that the number of investors reporting non-refundable net losses was almost one-half of the number reporting net gains, and the dollar value of these net losses was almost one-quarter of the dollar value of the net gains.28 The authors extend the standard theory to allow for the capital loss/tax-saving feature and find that tax-exempt investors are now predicted to hold risky, highly leveraged equities. This is consistent with recent transactions in which corporations have sought financing from pension plans while at the same time increasing leverage significantly in order to pay returns to investors in a form that is taxdeductible to the corporation. A.M.
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Liam Murphy and Thomas Nagel, The Myth of Ownership: Taxes and Justice (Oxford: Oxford University Press, 2002), 228 pages, ISBN 0-19-515016-3
Conventional tax policy analysis traditionally proceeds on the assumption that taxes should be designed to raise revenues equitably (both horizontally and vertically), efficiently (distorting otherwise efficient behaviour as little as possible), and simply (minimizing costs of collection and compliance). Written by two legal philosophers at New York University, Liam Murphy and Thomas Nagel, this important book challenges this conventional approach by evaluating taxes as “the most important instrument by which the political system puts into practice a conception of economic or distributive justice.”29 The basic premise of the book, which informs its critique of traditional tax policy and its evaluation of specific tax issues, is the argument that property rights are not properly defined prior to the establishment of a particular tax structure but are “defined in part through the tax system.”30 As a result, the authors emphasize, to the extent that traditional tax-equity criteria, such as the benefit or ability-topay principles, presume an antecedent set of property rights, they “do not adequately capture the considerations that ought to enter into the normative assessment of tax policy.”31 On the contrary, say Murphy and Nagel, because taxes are essential to the definition of property rights, justice in taxation must refer to “the system of property rights and entitlements that result from a particular tax regime.”32 This is an important insight that underlies a sweeping and often persuasive critique of traditional conceptions of tax fairness.33 In practice, however, this approach appears to collapse questions of tax policy into the broader subject of distributive justice, making it impossible to distinguish questions of tax policy from those of expenditure policy, and difficult for the authors to derive concrete implications for the definition of the tax base or the choice of a rate structure, both of which assume “purely instrumental significance” in the achievement of just social outcomes.34 As a result, specific chapters on the tax base (chapter 5), progressivity (chapter 6), inheritance (chapter 7), and tax discrimination (chapter 8) seem largely disconnected from the philosophical analysis of the first few chapters. Moreover, though the book emphasizes the dual purpose of taxes to redistribute economic resources and to finance public goods and services, the authors do not contemplate the possibility of a mix of taxes fulfilling different functions, but adhere instead to a traditional emphasis in much tax policy analysis on the idea of a single tax. Although something of a disappointment (attributable, no doubt, to this reviewer’s high expectations), The Myth of Ownership is a ground-breaking work that should be included in any academic course on tax policy. More importantly, it should encourage those thinking and writing in the area of tax policy to take questions of distributive justice more seriously, at the same time as it encourages legal philosophers and other academics to take the subject of tax policy more seriously as a crucial instrument for the pursuit of distributive justice. As a result, it is hoped, the book is only the beginning of a more extensive interdisciplinary dialogue. D.D.
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Karen Setze, “Tax Holidays and Amnesties: Resistance Is Futile” (2002) vol. 95, no. 11 Tax Notes 1570-73
A popular trend has recently developed in the United States whereby states provide consumers with a temporary sales tax holiday (often for only particular types of goods); the public enjoys the tax relief, while the lawmakers enjoy its short duration (reduced revenue cost). To date, no Canadian province has adopted such a measure, but it might be prudent for any government interested in promoting a sales tax holiday to read this article to learn about the programs’ drawbacks. The economic benefits are doubtful at best because consumers may simply shift their purchases to the holiday period; determining what goods and services are eligible for the holiday takes a lot of effort and creates many problems for such a short period of applicability; and there is a temptation for unscrupulous retailers to misreport their sales as occurring in the tax holiday period and pocket the resulting tax money. A.M. United States, General Accounting Office, Tax-Exempt Organizations: Improvements Possible in Public, IRS, and State Oversight of Charities, GAO-02-526 (Washington, DC: General Accounting Office, April 2002), 83 pages. Available on the Web at http://www.gao.gov/.
Those who recall the auditor general’s investigation into Canadian charities’ compliance (or lack thereof ) with the income tax filing rules35 will find the contents of this report interesting but not at all surprising. According to the report, US charities have a low rate of compliance with the existing rules, but with insufficient resources in this area available to the Internal Revenue Service, there is no prospect of improvement any time soon. A.M. Gary McGill and Edmund Outslay, “Did Enron Pay Taxes? Using Accounting Information to Decipher Tax Status” (2002) vol. 96, no. 8 Tax Notes 1125-36
Although many people think that the amount of income tax paid by a public corporation can be determined from its financial statements by looking at the line for current tax expense, this is far from true in either Canada or the United States. The authors explain that in the case of Enron, different methodologies can lead to very different results about the company’s effective tax rate on book income. With the post-Enron concern for fuller disclosure of corporate financial results, it has been suggested that tax returns of public corporations be disclosed to the public. Although the authors believe this suggestion to be “extreme” in light of the potential for leaking investment and financial strategies to competitors, they suggest that disclosure is not an “all or nothing” proposition and that the release of
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some key numbers would help the public to understand how tax rules are being applied to public companies both domestically and internationally. A.M. Miranda Stewart, Global Trajectories of Tax Reform: Mapping Tax Reform in Developing and Transition Countries, Public Law and Legal Theory Research Paper no. 29 (Melbourne: University of Melbourne, Faculty of Law, May 2002) (also Harvard Journal of International Law (forthcoming)). Available on the Web at http://ssrn.com/abstract_id=319200.
Since the Second World War, tax reform efforts have been a significant part of economic development projects and structural adjustment programs in developing countries and countries engaged in the transition from a command economy to a market economy. In this paper, Miranda Stewart, a senior lecturer at the University of Melbourne Law School, provides a critical analysis of the theory and practice of tax reform in these countries. The first part of the paper surveys the agencies and processes by which tax reform projects are conducted in developing and transition countries. Although acknowledging that domestic factors are essential to the process of tax reform, Stewart emphasizes the important role of external inf luences that make the impetus for and content of most exercises in tax reform appear inevitable. Categorizing these external inf luences as governments of developed countries, non-government tax experts and organizations like the Harvard Institute for International Development (HIID), and international institutions such as the International Monetary Fund (IMF) and the World Bank, Stewart traces the many ways in which these organizations and individuals have shaped the content of tax reform in developing and transition countries. Having thus “mapped” the process of tax reform in these countries, the second part of the paper examines the discourse of tax reform associated with this process, questioning its assumptions and effects. Noting that most tax reform proposals favour broad-based low-rate corporate and personal income taxes, broad-based single-rate value-added taxes, the elimination of tax incentives, and the gradual reduction and eventual elimination of import and export duties, Stewart observes that this “remarkable consensus” excludes alternative perspectives, depoliticizes the policy choices that are necessarily involved in tax reform, disregards domestic circumstances that may favour alternative approaches, and downplays distributive issues both within developing and transition countries themselves and between these countries and developed countries. Concluding that tax reform discourse is neither monolithic nor incapable of change, however, Stewart states that a revised discourse that recognizes the political character of tax reform, the relationship between taxes and social and economic context, and the need for state action in the context of economic globalization can “push tax reform beyond the needs of the market to the needs of the people themselves in developing and transition countries.” D.D.
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NOTES 1 RSC 1985, c. 1 (5th Supp.), as amended. 2 Canada, Department of Finance, The White Paper: Tax Reform 1987 (Ottawa: Department of Finance, June 18, 1987). 3 Information Circular 88-2, “General Anti-Avoidance Rule: Section 245 of the Income Tax Act,” October 21, 1988; and Information Circular 88-2, “Supplement 1,” July 13, 1990. 4 Brian J. Arnold, “Ref lections on the Relationship Between Statutory Interpretation and Tax Avoidance” (2001) vol. 49, no. 1 Canadian Tax Journal 1-39. 5 84 DTC 6305; [1984] CTC 294 (SCC). 6 [1936] AC 1 (HL). 7 [1982] AC 300 (HL). 8 At 112. 9 At 113. 10 (1995), 3 GTC 4040; [1995] GSTC 17 (CITT). 11 97 DTC 111; [1997] 2 CTC 2088 (TCC). 12 2001 DTC 5471; [2001] 4 CTC 82 (FCA). 13 2002 DTC 6742; [2002] 2 CTC 197 (FCA). 14 At 177-78. 15 At 178. 16 At 179. 17 95 DTC 5389; [1995] 2 CTC 64 (SCC). 18 At 185. 19 At 241. 20 At 243. 21 At 33. 22 At 34. 23 At 39, table 3. The reason for the Ontario-Alberta difference is the marginal tax rate of 42 percent in Ontario versus 26 percent in Alberta. The author also conducts a similar analysis for the United States. 24 At 6. 25 In this respect, see also Miranda Stewart, Global Trajectories of Tax Reform: Mapping Tax Reform in Developing and Transition Countries, Public Law and Legal Theory Research Paper no. 29 (Melbourne: University of Melbourne, Faculty of Law, May 2002) (also Harvard Journal of International Law (forthcoming)), which is also reviewed in this issue. 26 At 259. 27 At 441. As the author notes, there is some error in this analysis in that some tax filers without employment income, such as the self-employed, also have earned income and thus are eligible to contribute to RRSPs. Average contributions show no particular pattern over time, so the growth in total contributions seems to be driven more by increased participation than by increased average contributions. 28 At 197. 29 At 3. 30 At 8. This argument is f leshed out in chapter 3 of the book, which examines the question of “Economic Justice in Political Theory.”
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31 At 7-8. 32 At 8. 33 At chapter 2. 34 At 99. See also ibid., at 131: “The real issue of political morality is the extent to which social outcomes are just, and knowledge of the distribution of real tax burdens is important only insofar as it helps us advance that aim.” 35 See the 1990 report of the auditor general: Canada, Report of the Auditor General of Canada to the House of Commons (Ottawa: Supply and Services, 1990), chapter 10.
