CANADA: Tax Rollback

Booming Canada, with seven consecutive annual budget surpluses fattening the treasury and national production daily setting new records, last week declared a dividend for all citizens: an across-the-board tax cut in 1953-54. In his annual budget message to a cheering House of Commons in Ottawa, Finance Minister Douglas Abbott rolled the country's tax rates back toward pre-Korea levels. Abbott announced:

¶An 11 % cut in personal income taxes, with more generous exemptions for dependents and medical expenses. The tax bill of the average $3,000-a-year wage earner (married, no dependents) will drop from $175 to $150 (at current U.S. rates he would pay $338).

¶A general reduction in taxes on business. The corporation tax rate, now 20% on the first $10,000 profit and 50% on profits over $10,000, will be lowered to 18% on the first $20,000 and 47% on the excess. The change will cut some companies' tax bills by as much as 49%. Shareholders' dividends will be 20% tax free instead of 10% as in the past.

Besides the tax cuts, the budget told other good news about the Canadian economy. The value of the gross national product jumped 7% last year; wages and incomes went up 12%. At the same time, prices dropped, personal savings increased, and inflation appeared to be checked. Said Abbott: "Those who argued in 1950 that we were in for a siege of indefinite inflation have been just as wrong as the pessimists who since the end of the war have been persistently predicting a new depression."