Closing the Gap

Addressing Inequality through Tax Policy in a Globalized Economy

Abstract

Rising income inequality is a pressing political issue in Canada and internationally. Yet, policymakers in advanced economies have thus far failed to meaningfully address the issue. Tax policy is one of the primary tools available for governments to structure local distributive realities, but there is uncertainty regarding the ability of governments to take effective action in a globalized world economy. This policy brief puts forward viable reforms. The Canadian federal government can mitigate income inequality in Canada through targeted corporate and personal income tax reforms and a new approach to compliance enforcement.