Madam Speaker, I understand the point made by the hon. member for Calgary Centre on progressivity. Just to reassure him, when one studies economics, one cannot help but hear about such a well-known economist as Mr. Laffer.
We also study his curve, which looks a lot like decreasing performance curves based on the same principle. That being said, it is still possible to make the system progressive with different tax rates.
Certainly, an individual with a 50 per cent tax rate can use a number of deductions to bring his actual rate down to 30 per cent. Except that if the 20 per cent deduction is a productive investment in the economy made jointly by the private sector and the government, in my opinion, it would be even more efficient than if the government did it directly, because it would be a private initiative. I would feel reassured by such a system; it would be much better than leaving everything up to the private sector.
One philosophy is fundamentally different, namely the role of government in society. I am one of those who believe that the government has a duty to intervene. And the tax system enables it to pick its targets. In the system favoured by the hon. member for Calgary Centre, all sectors are treated equally. His rationale is this: Competition will be very healthy because every type of business in every sector will face the same competition, will not have the advantage of tax incentives, but will be served by the government. Which may sound positive.
However, as a society, when we want or would like to help certain sectors because they are going through temporary difficulties, because we want to promote them, or because we think they have potential, the tax system does not give us much room to manoeuvre. We would need direct subsidies.
I am not sure it would really be more efficient than a shared-risk formula. But I must say that the current system has become so complex, so bogged down, that even the objective of coming up with a shared-risk formula between the government and the private sector loses some of its efficiency because of that very complexity.
So I want to reassure the hon. member that I understand his point of view. But we may have different philosophies on the role of government in society. Since he quoted an economist, I can quote him another who may be recognized one day as a major success or failure; there is Mr. Keynes, who was in favour of major government intervention, and the Keynesian state. It may have been too much, but government intervention also had a multiplier effect.
So for every economist who says one thing we can find another who often says the opposite. It is somewhat unfortunate as this often gives economists a bad reputation, but economics is not an exact science, it is a human science and it is up to us to decide which theory we want to favour.