The current taxation system used in Canada is unfair and a huge administrative nightmare. Is there a solution to this? Not a system that would keep everyone happy, no. However I believe I have a system that might be better then what we have at least.
Income Tax
Income tax is massively unfair and requires a team of accountants to do the more complex returns. Why not eliminate it? Income tax makes no real sense, an entirely sales tax based system makes more sense. Don’t get me wrong, employers should still have to pay a tax based on how much they pay employees, but that would be a more services tax since they are paying for a service from their employees.
Sales Tax
I admit with my method some of the complexity that was within the Income tax portion of taxation gets moved over to sales tax, but in our modern age this should not really be a big deal. Naturally with the elimination of Income Tax Sales Tax would increase substantially. However not everything would be taxed equally. A tier based tax would be instituted based on how essential the item was. For example on food their would be two taxation rates, one for essential foods like bread, meat, milk, fruits, and vegetables, and another higher rate for junk foods. This would serve a dual purpose, with healthy food having considerably less tax on it then junk food the consumption of healthy food should increase reducing the over all obesity of Canada, with a low enough rate on the essentials it would keep tax rates low for low income families. For other items there would also be varying rates depending on how essential it is with things like gas guzzling SUV’s, cigarettes, liquor, and marijuana, having the highest sales tax rate while things like clothing, and shelter, having the lowest tax rates.
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2 comments:
I think exactly like you. but it does not work. Removing Income Tax sounds great. but an increase Sales Tax would kill the tourism industry. people from other country wouldn't want to come if tax was like 20+ percent. (japan has 5% sales tax and it's great).
about the different tax level... it's already like that. untransformed product like milk and veggies don't have GST. At least in Alberta, BC and Quebec. I don't know about Ontario.
Well if you are going to drop income tax you have to make up the money somewhere, sales tax is the logical place. As for tourism you can always offer tourists a chance to get the sales tax back, ensuring that tourists don't pay the increased amount.
I am aware that for some things there are different tax rates, I am just suggesting working out the details a little further.
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