Still savouring B.C.’s forward-into-the-past choice in the August 26 harmonized sales tax (HST) referendum, Lotus Landers will be happy to know that increasing taxation complexity is one of the country’s lesser appreciated hobbies.
In a recent report on the country’s Income Tax Act, the Certified General Accountants of Canada (CGA) illustrated that national passion for taxation obfuscation by pointing out that what began as an 11-page Income War Tax Act in 1917 now runs to 2,800 pages.
For Canada’s small and medium-sized enterprises (SMEs) that adds up to much more than some impenetrable nighttime reading. According to CGA figuring, the country’s businesses pay around $12.6 billion a year to comply with that 2,800-page tribute to bureaucratese – and that’s in addition to the taxes companies have to pay.
So lovers of the redundant layers of taxation headed our way with B.C.’s fright-night production of “PST/GST: The Sequel” will be disappointed with the CGA’s push for taxation simplification.
Cynics might also wonder why accountants would want less-complex tax rules – they making much financial hay out of untangling those rules for companies that don’t have math geniuses in their bullpen.
But as the CGA points out in “The Need for Tax Simplification – A Challenge and an Opportunity,” tax complexity is expensive to administer and maintain for everyone in the country, including the government, which is already under enough fiscal strain trying to keep nose above water line in the latest deluge of depressing global economic news.
It points to other jurisdictions that have awoken from extended tax complacency slumbers.
Down Under, for example, Australia’s Future Tax System Review determined that 90% of the country’s revenue came from 10 of the government’s 125 different taxes. That begged the question: how cost-effective are the other 115 and why does the country have them?
Speaking of taxation, the movement to ensure that the super-rich are hauling their fair share of the world’s tax load is gaining momentum.
Even some members of that elite are nodding heads on this one.
Warren Buffett, for example, has been quoted in the daily press as conceding that he and other members of his country’s super-rich have been “coddled long enough by a billionaire-friendly Congress.”
Out our way, the good sense of an additional tax on the super-rich is becoming more apparent.
For one, it would help show those who aren’t super-rich that people with lots of money earned not always by honest sweat pay taxes; for another some occupants of that elite earnings bracket are providing ample evidence that they’re not putting their money to good use.
Public finger-wagging over the 13 drivers nabbed street racing along Highway 99 in Ferraris, Lamborghinis and other luxury vehicles is but one example. As much as the incident points to the need for stricter driver training rules for the empty-headed in the monied classes, it underscores the reality that the owners of the cars and/or their offspring have too much money and not enough common sense.
Government can do something about the former. But powers higher than those possessed by mere mortals will be needed to do anything about the latter. •
