Thursday, May 1, 2008

A flat tax for Canada. It's your call

Canadians have once again undergone the ritual of sending in their tax returns, a yearly event greeted with all the enthusiasm of going to the dentist for a root canal. At least a root canal has some direct benefit to the patient, while it is often difficult to determine just what or how the various programs, credits and exemptions the government provides benefit the average taxpayer. The fact that a family which relies on employment income and has few or no investment vehicles needs to fill in a form with hundreds of lines of input is mind boggling in the extreme; if the average family is unable to fill in a tax return without professional help, how much more time and effort is needed by the self employed taxpayer, the small business owner or the person with somewhat above normal ambition who has small investments supposed to cope?

The direct costs to this madness are estimated to be about 3.9 billion dollars to the Canadian economy. Indirect costs from lost productivity and efforts to shelter income from taxation are impossible to calculate with any accuracy, but the reader can imagine it must be at least in the same ballpark. This almost 8 billion dollar hit to the economy in direct and indirect costs is the resources to create almost 160,000 full time jobs.

The Fraser Institute has commented on this for many years, the Toronto Sun recently published a piece, the Guelph Mercury and now the Montreal Gazette have also published interesting articles commenting on the issue. It is about time that you called, wrote or emailed your Member of Parliament and MPP about this issue as well. A simplified flat tax can collect the same amount of revenue as the current system with all its distortions and complexity, while freeing enough economic resources into the productive economy to employ an entire town's worth of Canadians. That is something worth fighting for.

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