Skip to Main Content
Have library access? Log in through your library
The Redistribution of Income in Canada

The Redistribution of Income in Canada

Copyright Date: 1980
  • Cite this Item
  • Book Info
    The Redistribution of Income in Canada
    Book Description:

    This original study challenges the widely held belief that government policies to redistribute income have made Canada a more egalitarian state. The author bases his conclusions on extensive documentation of the real effect of changes in taxes, transfers, and government expenditures.

    eISBN: 978-0-7735-9562-0
    Subjects: Finance

Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. Table of Contents
    (pp. iii-iv)
  3. Preface
    (pp. v-viii)
  4. Part One The Redistribution of Income in Canada: Introduction
    (pp. 1-5)

    A myth is becoming entrenched in the Canadian body politic. the myth that Canadian society has become increasingly more redistributive from the rich to the poor during the post-war period. The claim that Canadian governments have been successful in increasing the share of command over resources of the poor at the expense of the rich has moved off the popular podium and into the popular literature.¹ The claim may also lie behind recent provincial and federal moves to “tighten up on welfare clients”, res train spending on unemployment insurance payments. and expand tax loopholes for upper-middle income Canadians and the...

  5. Part Two The Framework: Fiscal Incidence in an Open Economy
    (pp. 6-29)

    This study is an attempt to examine the effect of the government sector, both taxes and public expenditures. on the distribution of income in Canada in 1969. The general equilibrium nature of this problem requires the construction of a framework that renders manageable the macro variables involved and that makes explicit the assumptions necessary to the underlying methodology. The framework and methodology are developed in this Part in several steps. First, the theory of fiscal incidence in a closed economy unitary state is set forth. Then, the assumption of a unitary slate is relaxed in order to allow for a...

  6. Part Three Tax Incidence: The Effect of Taxes on the Distribution of Income
    (pp. 30-66)

    There are four steps in estimating the incidence of the total tax structure: the selection of taxes to be examined. the allocation of taxes to factor payments or consumer outlays depending on the lax shifting hypotheses considered. the distribution of such allocated taxes by size classes of income. and the conversion of such a distribution into a schedule of effective tax rates for the average family unit in each income class. The taxes selected examined are set Out in Table 3.1.

    Table 3.1 differs from the published statistics on taxes and public expenditures found in the major source.Financial Statistics...

  7. Part Four The Incidence of Public Expenditures: The Effect of Government Expenditures on the Distribution of Income
    (pp. 67-126)

    In this Part the effect of government expenditures on the distribution of income is estimated, the next major methodological step in the calculation of fiscal incidence for Canada in 1969. The four major steps involved in the estimating procedure are: the selection of government expenditures to be examined, the development of hypotheses concerning the distributional implications of the benefits from government expenditures, the allocation of government expenditures by income brackets, and the relating of the distribution of government expenditures as a percentage of the distribution of income in order to derive a measure of government expenditure incidence.

    Before proceeding to...

  8. Part Five Fiscal Incidence: The Redistribution of Income in Canada, 1969
    (pp. 127-151)

    The effect of taxes, transfers, and government expenditures on the distribution of income have been estimated separately. The final step is the measurement of fiscal incidence: the redistribution of income during 1969.

    The first of several theoretical and statistical difficulties that emerge in a study of fiscal incidence is the proper treatment of the imbalance that exists in the public sector. The theoretical framework of the investigation developed in Pan II presupposes a balanced public sector, with total tax revenues equal to total government expenditures. The framework does not explicitly allow for an active contracyclical stabilization policy that would call...

  9. Part Six The Redistribution of Income in Canada, 1961-1976
    (pp. 152-169)

    The empirical results of the preceding discussion could be put to several interesting uses. The results could be used to examine the effects of the federal tax reform legislation of 1971 on the distribution of income; the effects of proposed budgetary changes in taxes or public expenditures on the distribution of income; the effects on the size distribution of income of changes in social security legislation:issues in this part of the study.

    It is often said that government tax and expenditure policies have been becoming more redistributive over time. Indeed, it is fashionable to argue that the public sector has...

  10. Part Seven Summary and Conclusions
    (pp. 170-173)

    We have examined in this study the factual basis for the myth that Canadian governments during the recent post–war period have sub Stantively redistributed larger shares of income away from the rich towards the poor. The empirical evidence does not support the mythology. During 1969 there was redistribution from the higher income classes to the lower income classes; the redistribution was such that family units with low incomes gained at a higher rate than those with lower-middle to median incomes and family units with high incomes contributed at a higher rate than those with immediately lower incomes. In other...

  11. Notes
    (pp. 174-211)
  12. List of Tables and Charts
    (pp. 212-215)
  13. Back Matter
    (pp. 216-216)