IDEAS home Printed from https://ideas.repec.org/a/cpp/issued/v24y1998i3p394-401.html
   My bibliography  Save this article

The CPP Payroll Tax Hike: Macroeconomic Transition Costs and Alternatives

Author

Listed:
  • D. Peter Dungan

Abstract

The FOCUS macroeconomic model is used to estimate the impact of the CPP premium increases introduced in 1997. It is found that these will have relatively severe macroeconomic consequences in the short to medium term, although they will put the plan on a sound fiscal footing. Additional simulations explore how the macroeconomic damage of the CPP rate hikes could be mitigated. One method would be to "privatize" the CPP such that employers would no longer be taxed. A second alternative is to cap the CPP premium at the planned 1999 rate of 7 percent in 2000 and beyond, and collect the funds required to finance the unfunded CPP liabilities through the income tax. A final simulation indicates that if the current plan for CPP rate hikes is not amended it will be imperative that Employment Insurance rates be massively reduced over the next few years.

Suggested Citation

  • D. Peter Dungan, 1998. "The CPP Payroll Tax Hike: Macroeconomic Transition Costs and Alternatives," Canadian Public Policy, University of Toronto Press, vol. 24(3), pages 394-401, September.
    • Handle: RePEc:cpp:issued:v:24:y:1998:i:3:p:394-401
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0317-0861%28199809%2924%3A3%3C394%3ATCPTHM%3E2.0.CO%3B2-K
    Download Restriction: only available to JSTOR subscribers
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dungan, P., 1998. "The CPP Payroll Tax Hike: Macroeconomic Transition Costs and Alternatives," Papers 98-2, California Davis - Institute of Governmental Affairs.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jack M. Mintz & Thomas A. Wilson, 2001. "Taxes, Efficiency and Economic Growth," The State of Economics in Canada: Festschrift in Honour of David Slater, in: Patrick Grady & Andrew Sharpe (ed.),The State of Economics in Canada: Festschrift in Honour of David Slater, pages 95-133, Centre for the Study of Living Standards.
    2. Jonathan R. Kesselman, 1998. "Economics versus Politics in Canadian Payroll Tax Policies," Canadian Public Policy, University of Toronto Press, vol. 24(3), pages 381-387, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jack M. Mintz & Thomas A. Wilson, 2001. "Taxes, Efficiency and Economic Growth," The State of Economics in Canada: Festschrift in Honour of David Slater, in: Patrick Grady & Andrew Sharpe (ed.),The State of Economics in Canada: Festschrift in Honour of David Slater, pages 95-133, Centre for the Study of Living Standards.
    2. Jonathan R. Kesselman, 1998. "Economics versus Politics in Canadian Payroll Tax Policies," Canadian Public Policy, University of Toronto Press, vol. 24(3), pages 381-387, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpp:issued:v:24:y:1998:i:3:p:394-401. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Iver Chong (email available below). General contact details of provider: https://www.utpjournals.press/loi/cpp .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.