Unit 9 Flashcards
Define abatement
partial withdrawal of the federal government from certain tax fields to allow provinces to maximize their revenues
Define basic federal tax
amount of tax owed to federal government before subtracting tax credits and adding surtaxes
Define budget
annual statement setting out expected government revenues and expenditures
Define debt
total amount of money owed by a government to lenders as a result of its borrowing practices
Define direct tax
tax paid directly by a person or firm on which it is levied
Double taxation
taxation of the same income more than once
Over taxation
total tax burden discourages economic activity
Horizontal revenue gap
difference in revenue available to different provinces
Indirect tax
tax not levied directly on the final consumer but is hidden in the price of the good or service (e.g., duty)
National adjustment grants
unconditional federal transfer to have not provinces, never implemented, but is the basis for the current system
Rowell Sirois Commission
study group created to respond to financing crisis of the 1930s, recommended national adjustment grants
Subsidy, grant
government payment, can be conditional or unconditional
surtax
additional tax levied on the base tax
Tax
mandatory payment made by individuals and corporations to government
tax base
amount of money on which tax rates are levied
tax collection
principle that underlies current federal-provincial fiscal agreements
tax credit
deducted from the income tax of an individual, compared to tax deduction which is subtracted from the total income
tax harmonization
coordination of federal and provincial tax system to promote administrative efficiency and reduce chances of double taxation
tax jungle
uncoordinated tax system
tax rate
amount of tax expressed as a percentage levied on an individual’s cincome
tax rental
principle that underlay agreements in 1940-1062, in which federal government collected all taxes and paid each province a rental fee
tax sharing
federal and provincial both occupy personal and corporate income tax fields, federal government administers on behalf of most provinces
vertical revenue gap
the difference in revenue available to the two levels of government
How does the constitution allocate taxing authority between Ottawa and the provinces?
both: income, corporate, retail sales tax
federal: no restrictions
provinces: also property
Why was the Rowell-Sirois report shelved?
the three provinces who would have been ineligible for grants objected to it
How did federal and provinces handle vertical revenue gap first 75 years after Confederation
federal subsidies and grants
