Given how lucrative such a tax would be for both federal and provincial governments, why do you think they have shied away from it?

Your paper must be no longer than 1500 words (about 5-6 typed double-spaced pages, using normal margins and normal print). Longer papers will be penalized. The penalty will increase with the amount that you exceed the limit (naturally, there will be no penalty for slightly exceeding 1500 words, but the point at which the penalty will be assessed is not specified, as is true for many legal penalties!). At the bottom of your paper you must state the number of words in your paper (Microsoft Word provides this information under
Tools, subheading Wordcount; other wordprocessing packages also provide this information; you may omit the references from your wordcount if you like; be honest, because we have been known to count words!).
In general you may want to do some additional research for the paper (beyond the reading list). I have suggested some sources below, but because the paper deals with an issue that is real and recent, you can probably find lots of discussion of the taxation issues by using the normal search engines on the Internet. If you are having trouble finding out what you need, ask a librarian for help. You should of course provide complete references and footnotes, even to works from the reading list. Do not plagiarize. Cheating will be dealt with severely. Keep in mind that this is a paper in Public Finance, not in Tax Law or Tax Accounting – a
good grade will depend on your ability to tie your analysis into the concepts learned in this course. In the past, students with access to a trained accountant (eg. relatives) have occasionally turned in papers that present an analysis of the issues that is not particularly useful in this course.
A separate note on use of the internet: Many students use the internet to do research, in this and other courses. This is fine, but you should carefully footnote references, just as if you had taken a book out of the library. Copying material off an internet site and representing it as your own is plagiarism, and the University takes
that very seriously. You should also be aware of the obvious point that the internet does not have anyone controlling it. Often very useful sources will appear on your search engine side-by-side with sites that are complete garbage. It is your task, if you use the internet, to differentiate between the two! Librarians can help you do that. We have a librarian who works specifically with Management and Economics students, and she would be happy to assist you.
Paper Topic
The paper should address the issue of a capital gains tax on the sale of owner-occupied houses by Canadians
(to be classified as “owner occupied”, the owner must have lived in the house for at least one year). At this
moment (August 2021), capital gains on owner-occupied housing in Canada are not taxed, while capital gains
on property that is rented out are subject to tax. The United States deals somewhat differently with this issue.
Such a tax could be extremely large during a period of rapidly increasing house prices. No politician has dared
to touch this issue (even the NDP has shied away from it), although recently it has surfaced (see
https://granthshala.com/liberals-anti-flipping-tax-chips-away-at-exemption-for-principal-residences/).

Your paper should begin by detailing the nature of the capital gains exemption for personal residences in Canada, and also describing the American system. What kind of economic arguments could be made in favour of such an exemption, and what arguments could be made against it? Discuss in some detail the issues of horizontal and vertical equity implicit in the exemption. Can you come up with a rough estimate of the cost to the government in this exemption (this will be the hardest part of the paper, since it will require you to do some digging and to make some fairly wild assumptions!)? Given how lucrative such a tax would be for both federal and provincial governments, why do you think they have shied away from it? Finally, would you be in favour of or opposed to the imposition of such a tax? Explain your reasoning.