Before talking about upcoming tax cuts

François Legault returned to power, he will set in motion one of his main promises: to reduce personal taxes as of next year.

Cost of the measure: $2 billion per year. Payments to the Generations Fund will be reduced accordingly. We have already called these tax cuts “irresponsible”.

Of course, François Legault would be ill-advised to betray his promise to lower taxes. That’s not what we’re asking of him.

But it is high time to put the subject of real tax reform back on the agenda. This is all the more important since the CAQ has already promised additional tax cuts if it is re-elected in 2026.

If the idea came to him to anticipate this promise during his current mandate, it would be good to have some elements of reflection in mind.

That’s good: a study published Friday by the Chair in Taxation and Public Finance at the University of Sherbrooke comes to bring grist to the mill.

There is a particularly interesting observation: a majority of Quebecers are in favor of paying more consumption taxes if income taxes are lowered in the same proportion. It turns out that experts have been suggesting this avenue for a long time. And the context will be particularly favorable in the coming years.

Why increase the Quebec sales tax (QST) and lower taxes by the same amount? It may look like undressing Pierre to dress Paul. But this recalibration has several advantages that could be summed up simply: discouraging work less and penalizing consumption a little more.

It has probably never been so topical.

If you think the labor shortage is hurting right now, strap on your toques. The aging of the population will increase until 2030, causing the proportion of the working population to fall. We will have to find all kinds of ways to encourage people to work. Less taxing income is part of it.

At the same time, we face an ecological crisis largely fueled by our consumption-driven lifestyles. The environmental and even social costs of the t-shirt made in Bangladesh and sold for $6.99 at H&M are very poorly reflected in its price. Raising the QST slightly would capture some of these indirect costs. Europeans talk a lot about “sobriety” to fight the climate crisis. We will have to come there too.

Want more arguments? Economists argue that consumption taxes are less damaging to economic growth than income taxes.

They also allow less tax evasion. This is why the Québec Taxation Review Commission recommended in 2015 an increase in the QST coupled with a reduction in income taxes.

Please note: no one is suggesting drastically lowering taxes by 10% and raising the QST by the same percentage. The idea is not to push Quebecers to go shopping in Plattsburgh, where consumption taxes are only 8%.

We are talking about a slight and gradual rebalancing so that Quebec’s taxation is closer to that of comparable countries. Quebec is one of the states that rely the most on personal income tax to finance their public services (35% of tax revenue, compared to 25% on average for OECD countries).

Consumption taxes, on the contrary, represent a small proportion of tax revenue (24% here, against 32% for the OECD average).

Of course, we should help the less well-off to face a more greedy QST. But the solidarity credit already exists for that. We would only have to raise it. Those who are concerned about social injustice should bear in mind that the rich consume much more than the poor and therefore pay more taxes. Not to mention that a tax gives the taxpayer more flexibility. If it is difficult to avoid income tax, it is possible to avoid taxes by consuming less, saving or paying off your mortgage more quickly, for example.

The tax experts suggest it. The people are ready. When will we readjust our tax base?