Crawl Across the Ocean

Monday, August 20, 2007

Flat Tax Debate

Over at the Great Canadian Debate site, you can read my case against a flat tax along with Adrian MacNair's case in favour.

As it turns out, it's not much of a debate as me and Adrian seem to basically agree - but there you go - I'm not surprised the Great Debate organizers were unable to find anyone willing to come right out and argue in favour of increasing taxes on the poor and middle class so that they can be lowered on the rich (as would happen in any flat tax that we would actually see implemented in Canada as opposed to some magical pony* flat tax which is more progressive than the current system.)

Anyway, any comments on the topic can be left in the relevant forum at the great debate site

* Blog lingo for plans which sound good on paper but, since they will not ever actually be implemented, only serve to provide rhetorical cover for those who want to implement something which sounds similar but is actually far worse.


  • You won the debate, but your opponent's argument was horrible.

    One nit-pick:

    Taxable income technically starts with the first dollar earned. So after the first dollar, you pay 15.5 cents in tax. As you probably know, everybody is entitled to a ($8929) non-refundable tax credit which would offset this. Most Canadians are also entitled to the $1000 employment credit. If you are not entitled to this (e.g. a non-resident earning Canadian source income), then you would still have to pay part I income tax, despite having an income under this amount.

    Take a look at the income tax acts provincially and federally and you'll see where the real streamlining is needed - changing tax rates won't solve the core issue, which is the complexity of the tax system. The income tax act has been used as an instrument of social policy far too often and the ultimate result is what we have today.

    By Blogger Sacha, at 11:35 PM  

  • Re your first paragraph, true enough, but a bit of a moot point since the effect is the same.

    No real argument with your second paragraph. I recall an undergraduate argument many years ago with me and an engineer roommate trying (unsuccessfully) to convince a couple of accountants that you could cut the (federal) income tax act down to 100 pages without making many big sacrifices....

    By Blogger Declan, at 10:18 PM  

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