Tax Reform

We need it. There are so many taxes in Canada. Canadian government takes in more than one third of the nation's money, up to 40% in some years. They do this in the form of many different taxes. These include taxes on income, luxury items, essential items, tobacco, alcohol, inheritance, property, building permits and even death. We need to simplify this.

From 1867 to 1917, the federal government of Canada collected taxes through excise taxes and tariffs only. In 1917, a federal income tax was introduced (http://www.archive.org/stream/canadianincometa00pontrich). The income tax was supposed to be eliminated after the war when the debt was paid off. This has got to be the biggest broken promise a politician has every supplied us with. More than ninety years later, we still have it. Not only do we still have, it has grown. Back then, the tax brackets were:

<$6,000 = 0%
<$10,000 = 2%
<$20,000 = 5%
<$30,000 = 8%
<$50,000 = 10%
<$100,000 = 15%
>$100,000 = 25%
Corporations= 4%
Single men = 4%

Compared to:

<$37,885 = 15%
<$75,769 = 22%
<$123,184 = 26%
>$123,184 = 29%
Corporate = 29.5-35.5%

That's a big increase! Now let's say you live in my province, Prince Edward Island. Add on to the above:

<$31,984 = 9.8%
<$63,969 = 13.8%
>$63,969 = 16.7%

Then we also have a federal sales tax of 5% and a Provincial sales tax of 10%. I'm going to leave out all of the other taxes for now, for time's sake. So the govt takes at least one quarter of what you make and up to more than one half. Here's what I propose:

-Eliminate all federal taxation, including the federal income tax and replace them with a "FairTax", a national sales tax at a rate of around 40%. This would make Canada a HAVEN for business. This means more jobs. So many new jobs, that Americans would be moving north to get employment.

-Eliminate Provincial Sales Taxes. I got this idea from (drum role please) the constitution! That's right, the BNA Act says "In each Province the Legislature may exclusively make Laws in relation to Matters coming within the Classes of Subject next hereinafter enumerated; that is to say... Direct Taxation within the Province in order to the raising of a Revenue for Provincial Purposes" (Section 92.2). Direct taxes are those on income. Sales taxes are classified as collective tax, or indirect taxes. John A. MacDonald would not be impressed.

-Institute provincial flat income taxes. Make all citizens pay the bottom rate (9.8% in Prince Edward Island). Not only is this more fair and equal, it will boost the economy by allowing businesses to higher more people. Businesses will be able to increase their profits which, in turn, will increase government revenues. Everybody's happy!

Keep in mind that this is just a tax reform plan. I would hope that these proposed rates would be lowered as government shrinks. I doubt we will ever return to pre-1917 tax rates, but I do still think there is hope for Canadian tax-payers.