Canada and the United States: Intent, Results, and Consequences

The U.S. and Canadian tax systems are often compared, particularly in Can-ada. The comparison is usually made between the two federal tax systems, and little attention is paid to subnational-provincialktate and local-tax sys-tems in that context. Yet subnational tax systems collect an important share-40 to 50%-of overall tax revenues in both countries and are, therefore, likely to have an impact on economic choices. Accordingly, this paper presents the subnational tax systems of the two countries and, in particular, examines the degree of harmonization within and between countries, for recent years. This project should be of interest, since there has been little, if any, comparative quantitative assessment of the degree of harmonization of subnational tax sys-tems in Canada and the United States. The paper is divided into five parts. In the first, we address some defini-tional and methodological issues. In the second, we present the key features and importance of subnational tax revenues in Canada and the United States. In the third, we examine for three major taxes-personal income, corporat