In the world of golf, a mulligan is a shot taken to retake a previous shot. For a golfer like Jack, who is inspired to improve his game after watching the Masters, a mulligan can be a welcome addition to his bag of tricks. However, in the world of taxes, a mulligan is not an option. Instead, we’re stuck with a complex system that can be frustrating for even the most well-intentioned taxpayers. When it comes to taxes, lying is made worse because our tax system is broken. The last time our government closely examined the system was between 1962 and 1966, when the Royal Commission on Taxation, also known as the Carter Commission, made several recommendations – some of which led to big changes, such as the introduction of the tax on capital gains, in 1972. The need for tax reform is clear, but what exactly does that mean? In a word, it means simplifying our tax law and recognizing the economic and social importance of the family unit. The current system is far too complex, with rules that can be confusing even for experienced accountants. The introduction of the tax on split income, or TOSI, rules in 2018 added to the complexity, making it difficult for many taxpayers to understand how the rules work. As the Carter Commission noted, the family is still the basic economic unit in society. A spouse who stays home to raise children or manage the household plays a vital role in the success of the family, just as much as the one who works full-time as an employee or runs a business. Our tax law already recognizes this in that a spouse often has property, support, custody, and other rights regardless of their work or income status. So why should our tax law work differently? The Carter Commission recommended that we tax the family unit, rather than individual taxpayers. This would simplify the law and recognize the importance of the family in our society. In the United States, spouses are allowed to file their tax returns jointly, while in Canada, we have added complex rules to prevent the splitting of income. It’s time for us to revisit this approach and make changes that reflect our modern society. In addition to simplifying the tax law, tax reform should also ensure that the tax system is fair. The current system is a patchwork quilt of measures, with different rules and regulations that can be confusing and unfair. We need to define what a “fair share” of taxes means and ensure that everyone contributes their fair share. The views expressed by the Carter Commission, which believed that “a buck is a buck is a buck” – that is, regardless of the type of income, it should all be taxed the same – are not only outdated but also misguided. The business owner who sells their business after risking all they have, creating jobs for others, innovating, and solving important problems should pay a different tax rate than the person who earns a dollar by parking their money in a guaranteed investment certificate. In fact, the government of the day recognized the importance of different tax rates for different types of income. They proposed to erode this benefit during Justin Trudeau’s leadership, but it’s time to revisit this approach and make changes that promote strong business investment, greater productivity, higher incomes, and effective use of our natural resources. Tax reform should also promote economic prosperity and sovereignty by making changes that encourage business investment, productivity, and innovation. By simplifying our tax law and recognizing the importance of the family unit, we can create a more equitable and effective tax system that benefits all Canadians.
| Advantages of tax reform | Examples |
|---|---|
| Simplifies the tax law | Reduces complexity, makes it easier for taxpayers to understand |
| Recognizes the economic and social importance of the family unit | Allows spouses to file tax returns jointly, recognizes the value of stay-at-home parents |
| Ensures fairness in the tax system | Defines what a “fair share” of taxes means, ensures everyone contributes their fair share |
| Promotes economic prosperity and sovereignty | Encourages business investment, productivity, and innovation, creates a more equitable tax system |
In conclusion, tax reform is a critical component of meaningful change in Canada. Fixing Canada’s Broken Tax System is a complex issue that requires a thoughtful and comprehensive approach. By working together and making changes that reflect our modern society, we can create a better future for all Canadians. It’s time for Canada to join the ranks of other developed countries that have simplified their tax systems and recognized the importance of the family unit.
This is a call to action for all Canadians to demand a better tax system.
“The tax system should be fair and equitable, and should reflect the changing needs of society.” – Carter Commission