Mr. Speaker, I want to commend the member for Capilano-Howe Sound for entering the debate on comprehensive tax reform.
I accept his note of caution when he spoke about overstating the accomplishments of a single tax. I think the member forgot to mention three very important fundamentals that would be achieved by a simple, fair, and efficient tax system. We always stated that the provincial rate would be added on to the federal rate, but I think there are three additional advantages the member did not cite.
First, I believe that a simplified fair tax system where everybody is in the loop would reduce the underground economy. I think one reason we have an underground economy in such an exacerbated state right now is because our tax system has driven people underground. A simplified and fair tax system would reduce the underground economy, which would add more revenue to the treasury.
The second issue that is fundamental to the system of a single tax system deals with what is happening in Hong Kong. They have a form of a single tax system over there, and it creates large pools of capital. When large pools of capital come into a country it puts downward pressure on interest rates. That downward pressure on interest rates means that capital is less costly for governments when they borrow it, which deals with the revenue or expenditure problem. It is also less costly for entrepreneurship. I believe that one thing entrepreneurship needs right now is cheaper capital and lots of it. That in turn would create an environment for investment and job creation. So the single tax has a direct impact on flows of capital, which would put downward pressure on interest rates.
The third thing the member did not touch on in his address on tax reform has to do with productivity. With a fair tax system I believe people would work harder and smarter and therefore the cost of goods would go down, which would help our exports tremendously, which would increase the bottom line, not only in business but in corporate tax revenues to the treasury also.
The member did not deal with those three specific features, which are part and parcel of the single tax system. Since the member is an economist, I wonder if he would consider they would be valid premises to work on.