"Income tax has made more liars out of the American people than golf," said the American humourist Will Rogers. Indeed, but lets not stop there. In Canada, debates over taxes, government and civilization lead some journalists and others into the land of make-believe, this by setting up straw men to knock down.
For example, consider a recent CBC story headlined "Not all business people hate taxes - but just try to get them to admit it."
To which one can only say: This is news?
As Albertans approach another provincial budget, the usual fables about Alberta's finances often crop up. To inoculate ourselves in advance, let's ponder two myths.
Myth Number One: Alberta's wealth is a result of luck.
This tall tale assumes that the existence of natural resources automatically results in wealth creation, jobs, and a higher standard of living. That's hardly the case. Plenty of jurisdictions have little in the way of natural resources but prosper, while others have plentiful natural resources yet flounder.
On Wednesday, the day after delivering the 2014 federal budget, Finance Minister Jim Flaherty set off a firestorm by offering his view on income-splitting, a platform commitment the Conservatives made for when the government returns to a balanced budget (likely next year). I'm not sure that, overall, it [income-splitting] benefits our society, Minister Flaherty stated, preferring instead to, reduce taxes more.
While readers of this page will know we haven't always agreed with Minister Flaherty over the years, he is right on the money with respect to income-splitting.
A new year can bring new possibilities. Its a chance to take stock of what weve accomplished in the past year and to set new goals for the future. Its also, however, when Canadian governments typically enact new taxes. Unfortunately, governments across the country in recent years have been all too keen to bring in new taxes or increase existing ones, resulting in squeezed household budgets. The question for 2014 then, is will this trend continue or will governments recognize its time to give taxpayers a break?
Fiscal policy is really about taxes and spending and the federal government recently provided some hints on its plans in these areas.
In the recent Speech from the Throne, the government reaffirmed its commitment to balancing the budget by 2015-16 and providing "greater tax relief for Canadian families" after the budget is balanced. But what form this tax relief may take remains a mystery.
Discussions about taxes are inevitably polarizing. Some Canadians think taxes are too high while others happily pay their share. But given the litany of taxes levied on us by the three levels of government, it is nearly impossible to get a sense of how much we truly pay.
In a recent debate on the pages of the National Post many Albertans might have missed, two economists, Rhys Kesselman from Simon Fraser University, and Jack Mintz from the University of Calgary, sparred over the most desirable tax mix for Alberta. Kesselman wanted Albertas single income tax rate replaced with cascading tax brackets, and structured to ensure higher overall taxes. Mintz advocated a sales tax but with the caveat that it be revenue neutral, i.e., some other tax should be lowered in exchange.
As the stress of the April 30th tax filing deadline fades and the shock realization by most Canadians regarding how much income and payroll taxes they pay subsides, its worthwhile considering the costs imposed on Canadians to comply with tax regulations.
All told, governments in Canada expect to collect $586.6 billion in 2013 (fiscal 2013-14). There are, however, significant costs beyond the simple dollars extracted.