Goals of Taxation
These are the three main goals of taxation discussed by Lightman & Lightman
What are equity, efficiency, and adequacy?
This is the term for programs that everyone receives, regardless of income
What are universal programs?
Between universal and target, this approach is simpler to administer
What is universal?
This is the main federal tax used to finance Canadian social policy
What is personal income tax?
Name one social policy funded largely through taxation in Canada.
What is public healthcare, education, or income assistance?
This goal of taxation means treating people in similar circumstances the same way
What is horizontal equity?
This type of benefit targets only those who meet specific income or need criteria.
What are selective (or means-tested) programs?
This approach is more cost-efficient for limited budgets
What is targeted?
This kind of tax takes a larger percentage from low-income earners than from high-income earners
What is a regressive tax?
How does public perception of fairness affect tax compliance?
The more people view taxes as fair and transparent, the more willing they are to pay.
This principle means those who have more should contribute more.
What is vertical equity?
Chapter 7 argues that taxation and benefits are two sides of the same coin. What does that mean?
Financing (taxes) and spending (benefits) together determine redistribution and equity.
What social or political advantage do universal programs often have?
They build broad public support and legitimacy.
This is an example of an indirect tax.
What is the GST/HST or sales tax?
Taxation plays this role in reducing inequality
What is redistributing income through progressive taxation and benefits?
A tax system that collects enough to fund programs without distorting incentives achieves this goal
What is efficiency?
This is one major critique of targeted programs
What is that they can stigmatize recipients or miss those just above eligibility thresholds?
Targeted programs can create this economic disadvantage for recipients
What is the “welfare wall” or disincentive to earn more?
This type of tax is based on income brackets that rise with income
What is a progressive tax?
How might governments reform taxes to make financing more equitable?
By broadening tax bases, closing loopholes, or increasing progressivity.
True or false: Taxes are only a way to raise revenue.
False — they also shape redistribution, behavior, and social equity.
This Canadian tax benefit blurs the line between taxation and welfare by being “refundable”
What is a refundable tax credit (e.g., GST/HST credit, Canada Child Benefit)?
In what way does taxation enable universal programs to be politically sustainable?
Broad-based taxes make all citizens contributors and beneficiaries, reinforcing solidarity.
How can tax credits act as social policy tools?
They redistribute income or incentivize behaviors (e.g., child benefits, green incentives).
In Lightman & Lightman’s framework, what’s the key challenge of financing social policy?
Balancing adequate funding with political will and fairness.