Finance committee  I'm not completely sure about the unemployment rates in all of the OECD countries. Certainly there are countries with considerably higher taxes than Canada that have good economic performance and good productivity growth. Sweden is one example that has a tax-to-GDP ratio of about 50%--very much higher than Canada's.

Finance committee  First of all, I have to say that chart is not showing the VAT rate in two different years. It's showing the VAT revenue in 2005 and the VAT rate in 2007. It doesn't show, for example, that Italy has increased the VAT rate.

Finance committee  A lot of countries have increased their VAT rates. The most recent example that comes to mind is Germany, which increased its VAT rate by three percentage points.

Finance committee  I don't know about its personal savings. I think its economic growth has improved, but I'm not sure it's necessarily due to the increase in VAT; there were other changes.

Finance committee  We think that lower corporate taxes do increase investment and so would increase profits, and we also think that countries with lower corporate tax rates would be more attractive places for multinational groups to locate their profits. But we don't have any evidence to suggest that those changes would completely finance the tax cut.

Finance committee  I don't have any data. One of the problems with tax havens is that they're typically rather secretive and it's very difficult to get the data. There have been a number of estimates, but they vary widely as to the amount of tax that is avoided by the use of tax havens. But even that doesn't tell us who benefits and who loses from that.

Finance committee  I think it depends on what your priorities are.

Finance committee  I also would very much agree. In the OECD we think it is better to have a simple tax system and a low general rate, rather than a high general rate with a large number of special exceptions.

Finance committee  I think that if the purpose of the tax reduction was to promote economic growth, there is a considerable amount of evidence that a shift from personal income tax toward consumption tax would promote the rate of economic growth, keeping the overall tax burden constant. However, there is a concern that a move of that sort could increase income inequality.

Finance committee  If you did that, you might well get the best of both worlds, yes.

Finance committee  Thank you, and thank you very much for inviting me to speak to you today. I'm going to talk about how the Canadian tax system compares to tax systems across the OECD. In my presentation I will refer to some of the charts that I believe have been provided to you. First of all, there is a chart that reports tax revenues as a percentage of GDP.