Tax breaks are bribes, says The Economist

Tax exemptions, deductions and credits in America cost 7% of GDP, says The Economist.

Quoting data from the IMF, The Economist notes that America has the most tax breaks in the world, while Australia and Italy spend more on exemptions as a portion of their GDP.

Read: EU to curb food speculation and HFT

Many of the deductions and credits are aimed at lowering individuals’ tax obligations around pensions and interest payments on mortgages. And because most breaks go to middle-class voters, or important companies, politicians are reluctant to get rid of them, says The Economist.

Despite the Eurozone crisis, many countries in Europe continue to offer generous tax breaks, says The Economist. Italy spends the equivalent of US$2.4 billion on farm subsidies alone.

Read more here.

Also read:

Tax cheats beware: CRA launches snitch line

Top tax changes of 2013

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.