Beneficial Tax Cut

How can the government of a modern industrial nation increase its revenue? Finance Minister Douglas Abbott, whose conservative fiscal policies have balanced Canada's budget for the past six years, is unafraid of an orthodox answer: cut taxes. In his 1953-54 budget, Abbott reduced personal income taxes by 11% and corporation taxes by an average of 9% across the board. Last week, after the budget had been in effect for a full six months, he proudly reported that government revenues had increased nearly $90 million over the same period last year.

The tax reductions apparently sent warming impulses throughout the entire Canadian economy. Abbott had forecast an $11 million surplus for the entire 1953-54 fiscal year. Actually, in the first six months, the surplus has already climbed to more than $200 million.

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