When I think about Canadians’ reputation for following rules - like the old joke about how you get 20 Canadians out of your swimming pool? You say, please get out of my pool - the first thing that pops into my head whenever someone starts talking about the underground economy is that the very existence of that underground economy is a statement that taxes are too high. Nothing will shrink the grey economy faster than broad based tax relief.
The average Canadian, with employment income and an RRSP and no multiple income streams should be able to file her income tax return on a postcard. Instead, our system becomes more complex and Byzantine every year. We’re now at the point where the system is so overcomplicated that when consumers call Revenue Canada for help, even the taxman often gets it wrong.
It's interesting that Israelis with regular salary income don't need to file a return at all. They'd normally only need to file if they also earned rental or self employment income. Applying such a system in Canada shouldn't be all that complicated.
So using your example / assumptions, a middle ground would involve gaining $2.5bn while losing $50bn in lower rates. Hmm.
To take the business approach this column seems to favour, why not reduce transaction stickiness and see what we get in terms of increased GDP? A pilot to automatically prepare personal returns for a random sample of Canadians could tell us a lot I bet. Send everyone a letter with their calculated tax based on existing documentation from employers or , their RRSP assessment, and 30 days to approve or file their own, and let's see. I bet the person hours saved alone, and the hours liberated internally for audit, will justify the cost of the system.
I think much of the "hostility towards compliance" stems from the quid pro quo arrangement being tilted out of balance. Canadians no longer see the contract as being equitable, with too much money being thrown away on dubious causes. If you look at the Scandinavian countries, their citizens tolerate tax levels that seem absurd to us because there is widespread consensus that their system is fair.
The other thing is that certain ethnic subsegments of the population seem particularly fond of doing business off the books. My assumption is that in the old country, government corruption and mismanagement is or was so pervasive that everybody did everything they could to avoid paying taxes. That mentality followed them to Canada and was passed on to Canadian-born descendants.
The Canadian tax system specializes in persecuting ordinary hard-working Canadians while letting the super-rich go tax-free via the weird complex schemes dreamed up by their well-paid consultancy advisers who exploit every single tax loophole imaginable. Since the super-rich can afford the best tax lawyers money can buy, the CRA would rather shake down some poor working person in Edmonton for $10 instead of going after hidden offshore assets that carry a $10 billion tax liability. The CRA has many good people working in it (and I know some of them throughout the years), but they can only do so much inside a broken institution. It's time to defund and abolish the CRA.
I prefer to call it the remnants of a free market and like you, I don't indulge nor would I admit to it if I did. It's only a small part of the effects of the dead hand of the state. How much potential economic activity has been "shrugged off" by the dead hand? How much loss from those who choose to work less and remain in lower tax brackets to deprive the dead hand from encouragement? We know of the Capital flight over the last decade thanks in no small part to the political war against Canada's most competitively advantageous industry and exacerbated by the dead hand malinvestment in areas devoid of competitive advantage you allude to. It's not a stretch to recall a prescient novel and ask, who is John Galt?
When I think about Canadians’ reputation for following rules - like the old joke about how you get 20 Canadians out of your swimming pool? You say, please get out of my pool - the first thing that pops into my head whenever someone starts talking about the underground economy is that the very existence of that underground economy is a statement that taxes are too high. Nothing will shrink the grey economy faster than broad based tax relief.
The average Canadian, with employment income and an RRSP and no multiple income streams should be able to file her income tax return on a postcard. Instead, our system becomes more complex and Byzantine every year. We’re now at the point where the system is so overcomplicated that when consumers call Revenue Canada for help, even the taxman often gets it wrong.
It's interesting that Israelis with regular salary income don't need to file a return at all. They'd normally only need to file if they also earned rental or self employment income. Applying such a system in Canada shouldn't be all that complicated.
So using your example / assumptions, a middle ground would involve gaining $2.5bn while losing $50bn in lower rates. Hmm.
To take the business approach this column seems to favour, why not reduce transaction stickiness and see what we get in terms of increased GDP? A pilot to automatically prepare personal returns for a random sample of Canadians could tell us a lot I bet. Send everyone a letter with their calculated tax based on existing documentation from employers or , their RRSP assessment, and 30 days to approve or file their own, and let's see. I bet the person hours saved alone, and the hours liberated internally for audit, will justify the cost of the system.
I think much of the "hostility towards compliance" stems from the quid pro quo arrangement being tilted out of balance. Canadians no longer see the contract as being equitable, with too much money being thrown away on dubious causes. If you look at the Scandinavian countries, their citizens tolerate tax levels that seem absurd to us because there is widespread consensus that their system is fair.
The other thing is that certain ethnic subsegments of the population seem particularly fond of doing business off the books. My assumption is that in the old country, government corruption and mismanagement is or was so pervasive that everybody did everything they could to avoid paying taxes. That mentality followed them to Canada and was passed on to Canadian-born descendants.
The Canadian tax system specializes in persecuting ordinary hard-working Canadians while letting the super-rich go tax-free via the weird complex schemes dreamed up by their well-paid consultancy advisers who exploit every single tax loophole imaginable. Since the super-rich can afford the best tax lawyers money can buy, the CRA would rather shake down some poor working person in Edmonton for $10 instead of going after hidden offshore assets that carry a $10 billion tax liability. The CRA has many good people working in it (and I know some of them throughout the years), but they can only do so much inside a broken institution. It's time to defund and abolish the CRA.
I prefer to call it the remnants of a free market and like you, I don't indulge nor would I admit to it if I did. It's only a small part of the effects of the dead hand of the state. How much potential economic activity has been "shrugged off" by the dead hand? How much loss from those who choose to work less and remain in lower tax brackets to deprive the dead hand from encouragement? We know of the Capital flight over the last decade thanks in no small part to the political war against Canada's most competitively advantageous industry and exacerbated by the dead hand malinvestment in areas devoid of competitive advantage you allude to. It's not a stretch to recall a prescient novel and ask, who is John Galt?