De­fi­cit spen­ding is no free lunch; it’s a bill to fu­tu­re tax­pa­yers

La Jornada (Canada) - - ENGLISH SECTION -

cu­rrently $26.3 bi­llion for the fe­de­ral go­vern­ment. Of cour­se, the debt’s prin­ci­pal even­tually must be re­paid - a cost that will be bor­ne by fu­tu­re tax­pa­yers.

To get a bet­ter sen­se of the mag­ni­tu­de of the fe­de­ral de­fi­cit, con­si­der what it would ta­ke for the go­vern­ment to fi­nan­ce all its cu­rrent spen­ding with hig­her ta­xes to­day rat­her than kic­king the tax bill down the road. What would tax ra­tes ha­ve to be to co­ver the go­vern­ment’s ex­pec­ted $18.1-bi­llion de­fi­cit for 2018-19?

Let’s start with per­so­nal in­co­me ta­xes, the lar­gest sin­gle sour­ce of fe­de­ral re­ve­nue. Ac­cor­ding to the Par­lia­men­tary Bud­get Of­fi­ce’s (PBO) tool for cal­cu­la­ting the re­ve­nue im­pact of tax chan­ges, to co­ver the cu­rrent fe­de­ral de­fi­cit, the go­vern­ment would need to rai­se all fi­ve per­so­nal in­co­me tax ra­tes by two per­cen­ta­ge points - at a

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