The Resource Fiscal redistribution in Canada, 1994-2000

Fiscal redistribution in Canada, 1994-2000

Fiscal redistribution in Canada, 1994-2000
Fiscal redistribution in Canada, 1994-2000
Families pay taxes in exchange for the benefits of government expenditure, such as unemployment insurance, health care, or defence. Because taxes may be either more or less than benefits received, there may be a broad relationship between a family's income and the additions to or deductions from income that result from the fiscal operations of government. This article examines the gain or loss in income attributable to the public sector in Canada -referred to as "fiscal redistribution" - using previous theoretical and empirical economic research to allocate government revenues and expenditures to family income groups. Fiscal redistribution across family income groups in Canada has not been studied since the 1980s. Fiscal policy has changed markedly since that time. One of the most significant changes has been the consolidation of government finances, resulting in a turnaround in the Canadian fiscal position beginning in 1997. This article attempts to determine how fiscal redistribution evolved during the fiscal consolidation period from 1994 to 2000, when governments introduced measures to reduce budget deficits and improve the ratio of public debt to gross domestic product. Results are similar to those of studies using 1980s data and show that the Canadian fiscal system continued to redistribute income from higher- to lower-income families during this period. In fact, the degree of redistribution in favour of lower-income families increased slightly. This increase is due to the progressivity of the fiscal system, as well as any shift in the underlying income distribution
Citation source
In: Canadian tax journal = Revue fiscale canadienne. - Toronto. - Vol. 53 (2005),
Dyck, D
Geographic coverage
North America
Language note
  • redistribution principle
  • incidence of tax
  • tax policy
  • family taxation
  • allocation of income
Fiscal redistribution in Canada, 1994-2000
Fiscal redistribution in Canada, 1994-2000

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