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Flat tax is
Good
88%
 88%  [ 15 ]
Bad
11%
 11%  [ 2 ]
Total Votes : 17

Author Message
kwlafayette





Joined: 03 Sep 2006
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votes: 28
Location: Saskatoon Saskatchewan

PostPosted: Thu Sep 07, 2006 2:37 pm    Post subject: Lets discuss flat tax Reply with quote

I personally like the Hall Rabushka version. Simple, efficient, and fair; this is what Canada's tax system should become.

http://www.hoover.org/publicat.....02666.html

Should Canada move towards a flat tax model?
kwlafayette





Joined: 03 Sep 2006
Posts: 6155
Reputation: 156.2Reputation: 156.2
votes: 28
Location: Saskatoon Saskatchewan

PostPosted: Thu Sep 07, 2006 2:39 pm    Post subject: Reply with quote

Here is the Fraser Institute's take.

http://www.fraserinstitute.ca/.....amp;id=151
Spidey





Joined: 07 Sep 2006
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Location: Kitchener ON

PostPosted: Thu Sep 07, 2006 2:46 pm    Post subject: Reply with quote

But what about the bureaucracy? No one ever thinks about the bureaucracy!

What will happen to all the tax specialists, accountants and tax lawyers? Sadly, flat tax is a pipe dream.
kwlafayette





Joined: 03 Sep 2006
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votes: 28
Location: Saskatoon Saskatchewan

PostPosted: Thu Sep 07, 2006 2:51 pm    Post subject: Reply with quote

Well, if we can't get a full flat tax system, maybe we can at least get a family tax return, or some other small bit of fairness? Maybe something just a little bit simpler, and a system that does not require the use of either computer or human assistance to ensure a proper tax return?
McGuire





Joined: 05 Sep 2006
Posts: 369
Reputation: 20.2Reputation: 20.2
Location: Soviet Pictouwestistan

PostPosted: Thu Sep 07, 2006 3:22 pm    Post subject: Reply with quote

Why have any sort of income tax?? I personally oppose it b/c the gov't taakes people's money from them against their consent. A better way is to reform the GST, make it sort of a graduated tax like how the income tax is & that will take care of everything.
mkbraaten





Joined: 07 Sep 2006
Posts: 4
Reputation: 12.8
Location: Alberta

PostPosted: Thu Sep 07, 2006 7:48 pm    Post subject: Reply with quote

The benefits of flat tax are more hype than actual results. Years ago, a professor at the U of A (Roger Smith) performed a study on applying a flat tax system to tax base and determined that there is only a marginal benefit in terms of tax liability with a flat tax and a progressive tax structure with its various deductions.

Many people also incorrectly assume that a progressive tax rate structure is expensive to administer and thus a flat tax would be far more efficient. However, it is the deductions, rules, exceptions in the tax code that create the administrative costs, not the tax structure itself. Tax rates and deductions are mutually exclusive: a country can reduce administrative costs by lowering the progressive tax rates and eliminating the deductions.

Keep in mind that a flat tax structure with no deductions would then limit the appeal of investments. As you can see, there is a benefit from cost of an expensive deductions based system: investment and growth is implicitly encouraged. The benefits of investment vis a vis economic growth far outwieigh the expensive costs to administer the system.
Craig
Site Admin




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PostPosted: Thu Sep 07, 2006 8:01 pm    Post subject: Reply with quote

Those aren't flat taxes. Those are flat tax rates. A flat tax would be having everyone pay $5,000 to the government. Sounds fair to me.

At the very least the government should adopt the British model where your income is taxed within the bracket that it falls, i.e. you pay 10% on the first $30,000 you make, 20% on the everything between $30,000 and $100,000, and 30% on everything above $100,000. That reduces the disincentive to move up the pay scale. It is how we apply the basic exemption. It should also apply to the brackets themselves.
Donald Hughes





Joined: 02 Sep 2006
Posts: 166
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Location: Libertarian socialism

PostPosted: Thu Sep 07, 2006 9:07 pm    Post subject: Reply with quote

Quote:
At the very least the government should adopt the British model where your income is taxed within the bracket that it falls, i.e. you pay 10% on the first $30,000 you make, 20% on the everything between $30,000 and $100,000, and 30% on everything above $100,000. That reduces the disincentive to move up the pay scale.
This should make your day brighter: This is how it works in Canada, too!

Anyways, the high-income people in Canada already pay a flat federal income rate tax. They pay 29% on anything else they make. A large share of Canadians that pay income tax also face essentially flat marginal income tax rate. They pay the bottom rate on all of it. What the "flat tax" argument really comes down to is a strategy to reduce the highest rate. "Solution 17", the old reform plan, at least admitted it by not closing any tax expenditures but just cutting the middle and high rates.
mkbraaten





Joined: 07 Sep 2006
Posts: 4
Reputation: 12.8
Location: Alberta

PostPosted: Thu Sep 07, 2006 10:37 pm    Post subject: Reply with quote

Craig wrote:
Those aren't flat taxes. Those are flat tax rates. A flat tax would be having everyone pay $5,000 to the government. Sounds fair to me.

At the very least the government should adopt the British model where your income is taxed within the bracket that it falls, i.e. you pay 10% on the first $30,000 you make, 20% on the everything between $30,000 and $100,000, and 30% on everything above $100,000. That reduces the disincentive to move up the pay scale. It is how we apply the basic exemption. It should also apply to the brackets themselves.


That is the jist of a progressive tax system in Canada Craig. Your taxed at a particular rate on each level of income.
Craig
Site Admin




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PostPosted: Thu Sep 07, 2006 10:48 pm    Post subject: Reply with quote

Are you guys sure? I don't do my taxes (my wife does :oops: ). I could have swore that if you made $50,000 you paid the middle tax bracket on the whole $50,000 (minus the allowance of course).
Ken





Joined: 07 Sep 2006
Posts: 3
Reputation: 12.8

PostPosted: Thu Sep 07, 2006 11:18 pm    Post subject: Reply with quote

Craig wrote:
Are you guys sure? I don't do my taxes (my wife does :oops: ). I could have swore that if you made $50,000 you paid the middle tax bracket on the whole $50,000 (minus the allowance of course).


No, if there were 3 tax brackets at 30,000, 40,000 and 50,000 and you make 55,000. 30,000 gets taxed at the first marginal rate (minus basic personal amount), 10,000 gets taxed at teh 2nd rate, then the last 5,000 gets taxed at the 3rd rate.
Albertan Technophile





Joined: 07 Sep 2006
Posts: 76
Reputation: 14.2
Location: guess :)

PostPosted: Thu Sep 07, 2006 11:22 pm    Post subject: Reply with quote

I think Alberta has a flat tax of 11%. (don't quote me there)

Seems to me thats its a fair way to go, the rich pay more and the poor pay less.
overthesea





Joined: 02 Sep 2006
Posts: 9
Reputation: 13

PostPosted: Thu Sep 07, 2006 11:55 pm    Post subject: Reply with quote

Yay for the FairTax, a national sales tax.
mkbraaten





Joined: 07 Sep 2006
Posts: 4
Reputation: 12.8
Location: Alberta

PostPosted: Fri Sep 08, 2006 12:34 am    Post subject: Reply with quote

Craig. As an accountant, I can 100% garantee thats how it works.

For ex:

If you make 50,000

Using 2005 federal tax rates and ignorning personal exemption and provincial tax:

____0 - 35595$ x 15% = 5695
35595 - 50000$ x 22% = 3169
Total Fed Tax payable: 8865$


Alberta has a flat tax of 10% on all income.
FF_Canuck





Joined: 02 Sep 2006
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votes: 17
Location: Southern Alberta

PostPosted: Fri Sep 08, 2006 3:17 am    Post subject: Reply with quote

Personally, I'd favour no income tax at all, with an increased sales tax. That way, you can make as much money as you want - no disincentives for earning more.

Exceptions would be food and primary housing (rent or mortgage), and electricity and gas for that housing - they wouldn't be taxed at all, which would be a boon to lower income earners and families.

The beauty is it gives both sides of the debate something. The Left will like it because the poor pay less, and the rich pay more (b/c they spend more), and the Right will enjoy the lack of profit disincentives.

As a disclaimer, I'm not an economist, so YMMV. And yeah, definately a pipe dream.
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