Unlocking Canadian Capital: The Case for Capital Gains Tax Reform

David Robinson is an associate professor of economics and dean of the
Faculty of Social Sciences at Laurentian University.

Unlocking Canadian Capital claims to be an objective, scholarly analysis
of economic theory and empirical evidence surrounding capital gains
taxation in Canada. It comes out of a Fraser Institute symposium held in
1999. Grubel, a Reform Party candidate in 1993, argues for elimination
of the capital gains tax. Overall, the book doesn’t make much of a
contribution to anything but the Fraser Institute backlist.

Grubel’s first chapter lays out the major issues in a clear and
balanced manner. Each of the next three chapters is entitled “A
Critique of the XXX Issue,” where XXX stands for an argument in favor
of capital gains taxation. The chapters are not particularly good, but
they might provide a lobbyist with some useful sound bites.

The book is short on empirical analysis and long on opinion. Since half
the book consists of transcripts of the hearings of the Canadian Senate
Committee on Banking, Trade, and Commerce, much depends on the
selection. Politics explains why leftish Neil Brooks was left out,
despite his credentials, and why rabidly rhetorical Reuven Brenner was
included. The four other thoughtful expert testimonies by economist Jack
Mintz, tax law expert Vern Krishna, John Dobson and Ian Soutar from
Pembroke Management, and American tax economist Allen Sinai are
interesting for tax experts and policy economists, but probably too dry
and repetitive for most readers. Mintz and Sinai are the most
informative and, incidentally, the least dogmatic about the nature of
the reforms we need.