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Author Topic: Demad to be Treated Fairly in Our Tax System
John I. Fleming
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posted 06 December 2001 05:30 AM      Profile for John I. Fleming        Edit/Delete Post
Today, Canadians are paying one of the highest taxes in the nation's history. The current complex tax system includes several inequities. It penalizes low and middle-income earners while allowing the rich and corporations to utilize loopholes and itemized deductions to elude paying their fair share.

We must scrap our confusing, unfair tax code and replace it with a simple flat tax of one low 17% rate with no deductions or special interest loopholes. We need lower taxes at the federal, provincial, and local levels.

Many taxpayers face confiscatory tax rates and often are forced to pay more than one layer of tax on their income and the politically well-connected can take advantage of special deductions, credits, preferences, shelters, and loopholes to minimize their own tax liability. The result of this double standard is a tax system that not only penalizes productive behavior, but also violates the fundamental constitutional principle of equal treatment under the law.

For many Canadians, the flat tax means simply that everyone would be taxed at "just one rate." Even though the 17% tax rate is a key feature of the flat tax, it would be only one element of the comprehensive reform. The flat tax eliminates inequalities in the current tax code by treating all taxpayers--and income--equally. With the exception of exemptions based on family size, all income would be taxed, but only one time. For fairness and simplicity, there would be no deductions, credits, preferences, or loopholes.

To achieve even further simplicity, the tax on all other income, including interest, dividends, rents, royalties, and business profits, would be withheld and paid at the business level (much like an employer withholds and pays individual income tax for workers). Because the government would not be allowed to tax any income more than once, the capital gains tax would be eliminated. The flat tax also would get rid of all itemized deductions like the write-off for home mortgage interest, charitable and political contributions, and provincial and local income and property taxes.

By implementing such a system everyone would be treated fairly, businesses and the rich would still pay their fair share, while the low and middle-income earners would benefit greatly, especially those working two jobs and working overtime hours.

Lobby your local MP and MPP’s to implement a 17% flat tax and demand that you be treated fairly!

John I Fleming

[ December 06, 2001: Message edited by: John I. Fleming ]


From: Sault Ste. Marie, Ontario, Canada | Registered: Nov 2001  |  IP: Logged
Marc
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posted 06 December 2001 05:52 AM      Profile for Marc     Send New Private Message      Edit/Delete Post
I think that you probably picked the wrong message board to post that. I find that our tax system is unequal...but a 17% flat tax will only make it worse. A 17% tax would take a huge chunk of tax revenue away from social programs that the poor need the most...but look at the people who get the least of a tax cut...it is the lower and middle classes...the ones who need the social programs. The rich have the money to go to the United States for health care if they want it...the poor don't. If we were to implement such a tax the poor would be carrying an unfair burden because they would have to suffer with the consequences that come with having to gut social programs because of the loss of revenue.
From: Calgary, AB | Registered: Apr 2001  |  IP: Logged
John I. Fleming
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posted 06 December 2001 07:04 AM      Profile for John I. Fleming        Edit/Delete Post
I will listen to the intelligent people who study economics and are Nobel Pirze winners in Economics that support a flat tax system. Canadian Nobel Prize winner in Economics for 1999, Robert A. Mundell, supported Stockwell Day's approach to a flat tax system just prior to the 2000 federal election.

John I. Fleming


From: Sault Ste. Marie, Ontario, Canada | Registered: Nov 2001  |  IP: Logged
Apemantus
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posted 06 December 2001 07:07 AM      Profile for Apemantus        Edit/Delete Post
quote:
I will listen to the intelligent people who study economics and are Nobel Pirze winners in Economics that support a flat tax system


What about listening to the voters, who have voted for whatever governments have passed the various tax laws? After all, its them that pay the tax not the intellectual boffins!!


From: Brighton, UK | Registered: Nov 2001  |  IP: Logged
John I. Fleming
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posted 06 December 2001 07:26 AM      Profile for John I. Fleming        Edit/Delete Post
Apemantus wrote:

quote:
"What about listening to the voters, who have voted for whatever governments have passed the various tax laws? After all, its them that pay the tax not the intellectual boffins!!"

Could it be that voters are not economists and don't know what is best for themselves and that is why governments are elected to make fiscal policies that benefit all people and not just the few?

John I. Fleming


From: Sault Ste. Marie, Ontario, Canada | Registered: Nov 2001  |  IP: Logged
meades
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posted 06 December 2001 07:45 AM      Profile for meades     Send New Private Message      Edit/Delete Post
Nobel "Pirze" or no- if you make more, you should pay proportionately more! The flat-tax is just another scam to get the rich off the hook for their FAIR share!

quote:
Could it be that voters are not economists and don't know what is best for themselves
and that is why governments are elected to make fiscal policies that benefit all people
and not just the few?

Precisely why most didn't vote Alliance! They recognized that the flat tax is just a scam to keep the rich, rich, and the poor, poor.

We votuh's may not be as smaa't as you, massa Flemin', but we sholy does likes 'ahr suh'vices an' vo'in capblities!

[ December 06, 2001: Message edited by: meades ]


From: Sault Ste. Marie | Registered: May 2001  |  IP: Logged
Apemantus
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posted 06 December 2001 07:47 AM      Profile for Apemantus        Edit/Delete Post
Nope.

That is paternalism gone mad, and whether the voters are experts at a subject or not, they ARE offered policies which they then choose on.

And I think you will find as with most topics, there are experts on all sides of the debate. I know, from my own degree research, that there are economists who advocate no taxes, economists who advocate lots, research that shows high taxation does not necessarily harm economic growth (the income effect), economists that believe it does (the substitution effect) etc etc.

So frankly, I don't think governments are elected to tell us what is best, they are elected on party political lines, with their policies paraded as the reason to vote for them.

To not enact those policies, to not follow party lines, is to deny us our democratic rights.


From: Brighton, UK | Registered: Nov 2001  |  IP: Logged
Debra
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posted 06 December 2001 09:22 AM      Profile for Debra   Author's Homepage     Send New Private Message      Edit/Delete Post
wrong opinions held by so called experts; the earth is flat, the sun revolves around the earth, taking out tonsiles(sp)doesn't have any effect on the immune system, washing hands between doing autopsies and delivering babies not important.....come on folks it's a long list add your own.
From: The only difference between graffiti & philosophy is the word fuck... | Registered: Apr 2001  |  IP: Logged
doseq
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posted 06 December 2001 01:16 PM      Profile for doseq     Send New Private Message      Edit/Delete Post
quote:
but also violates the fundamental constitutional principle of equal treatment under the law.

Under a graduated tax system people are treated equally its dollars that are treated differently. For example, the first $29,590 are taxed at 17% for everyone, the income between $29,591 and $62,195 is taxed at 26% for everyone and income above $62,196 is taxed at 29% for everyone. This is in recognition that dollars are not equal. A person earning less than $29,000 spends a greater percentage of their take home income on the neccessities of life and therefore is more heavily affected by an increased tax burden. I don't think the constitution's prinicple was meant to extend to money.


From: Quebec City | Registered: Nov 2001  |  IP: Logged
DrConway
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posted 06 December 2001 01:49 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post
The marginal tax rates are now a little different today. The 17% bracket now extends (because of inflation indexing) to about $31000 a year. There are now a 24% and a 26% bracket, while the 29% bracket has been shifted upwards to start at either $80,000 or $100,000.

As for me, I've argued the case of taxation before and have even put forth a proposal that is elsewhere on this message-board.

It is essentially my case that, while taxes are too high at the low and middle ends, the solution lies not in a flat tax, which leaves the calculation of taxable income to stay complex, but to alter the structure of the tax system to make the calculation of taxable income EASY, while sharply lowering marginal tax rates at the bottom end and raising them at the top end.

Check it.


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
NDB
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posted 06 December 2001 03:44 PM      Profile for NDB     Send New Private Message      Edit/Delete Post
DrC, well put!

I find your thoughts on consumption taxes interesting. Consumption Taxes, or the 'User Pay Priciple', are really popular in government circles. Also, CT's are seen as a potentially useful tool in enforcing environmental initiatives. That may not be entirely clear, but my question is, do you see exceptions to the rule of junking consumption taxes?


From: Ottawa | Registered: Aug 2001  |  IP: Logged
Rod Manchee
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posted 06 December 2001 03:47 PM      Profile for Rod Manchee     Send New Private Message      Edit/Delete Post
I really don’t know where John Fleming gets his fascinating intros. I remember a maximum marginal income tax rate of 43%, then 34%(this was back when there was an attempt to make them fair and equitable, pre the Mulroney monstrosity), but that was the marginal rate, while the average was much lower.. Highest rates - perhaps he could expand...

Or maybe he means total taxes - well, a decade or so ago taxes accounted for about 1/3 of most Canadians total income, with about ½ of that on income, a “progressive” tax, and the other ½ on some form of consumption, generally a set of “regressive” taxes. That “total income” included the visible things like pay and the less visible ones like the increase in the price that a homeowner could get for his house. I haven’t seen any recent figures, but I’d guess that things like income tax decreases just about balance off the GST(which is the only significant new tax I can think of), so the total tax impact is probably still around 1/3.

Note - that’s about the same for everybody, rich and poor. The rich pay more in income tax but aren’t hit very hard by the other taxes(partly because they can avoid them more easily, partly because they tend to engage in activities exempt from those taxes). Everybody else may pay less in income tax but feel the effect of the other taxes much more heavily. So, for pretty well everybody the effect is about 1/3 of their total income. The very poor will pay at a lower aggregate rate(they’d starve otherwise, and may still) while the rich plop their money offshore or in stock transactions(a GST exemption)and so”shelter” it from taxes they might otherwise be liable for.

When you look at total tax burden we already have what amounts to a flat tax.

That’s a flat tax that totals to about 1/3, but he wants to cut it to 17%, or by about 50%. That means cutting all government services in half, and this obviously poses some problems as well as making some people happy.

School kids would no doubt appreciate only having classes to the 15th of each month, but the road maintenance people would be faced with a vexing problem - whether to fix the left lane or the right one. Harris would of course want to fire half the people left in the Ontario Environment Ministry, and that could be done to the Federal Health Protection Branch Labs too. And so the conundra mount.

As far as having a number of marginal rates being confusing(not raised directly, but implied by the single rate position), as one who lived in an era of ten marginal rates, let me assure you that it’s not true. You only have to compute taxable income, find its range and the base amount owing(given with the lower end of the range), then compute the charge on any income above the lower end of the range, based on the next higher rate. It’s the same process you go through now, and isn’t any more complicated whether there are one, three, 10, or 100 marginal rates.

The complication is in working out the taxable income and, if anything, the Mulroney “reforms” made this more complicated. Getting rid of all the exemptions, or at least re-examining them and keeping only the ones that are reasonable(eg dependents exemption, age exemption, etc) would be a useful step, but difficult since the rich hide behind the confusion that numerous exemptions cause(one simple example - thinking that a flat tax approach would solve problems that are really caused by the multitude of unprincipled exemptions).

The Carter Commission principle of “a buck is a buck” is still as sound and resolutely ignored by people who try to tell us they want fairness in taxation. They can escape ever having to apply a principle like “fairness” by endless smokescreens raised around the issue. “Flat tax” is one of those smokescreens.

As far as tax rates being “confiscatory,” that pretty much nonsense. If you net out the benefits you get from taxes, against their cost, even with an extremely inefficient, Harris-style government, you find that tax-funded delivery of those benefits is the most efficient, most generally available way of delivering them. This is because of the economies of scale, the wide-ranging impact of those benefits, and the “public”nature of those benefits,

I mention “Harris-style” since his government has eviscerated much of its capabilities, and privatised many functions. These may look like economizing moves, but the cost of privatizing them will become more and more apparent, à la Walkerton. There may appear to be benefits, but they will disappear under a mudslide of extra costs, monetary and human.


From: ottawa | Registered: Apr 2001  |  IP: Logged
clockwork
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posted 06 December 2001 06:32 PM      Profile for clockwork     Send New Private Message      Edit/Delete Post
The only good tax is a poll tax. Left-wing bleeding hearts like Mr. Fleming would have one person pay more to the government than another person. Is that fair?

Of course not! So write your MP and demand fair tax treatment today!


From: Pokaroo! | Registered: May 2001  |  IP: Logged
judym
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posted 06 December 2001 06:38 PM      Profile for judym   Author's Homepage     Send New Private Message      Edit/Delete Post
quote:
I will listen to the intelligent people who study economics and are Nobel Pirze winners in Economics that support a flat tax system. Canadian Nobel Prize winner in Economics for 1999, Robert A. Mundell, supported Stockwell Day's approach to a flat tax system just prior to the 2000 federal election.

You seem to be confused. This is a discussion board, and it's not exclusive to people who study economics and Nobel Pirze winners. Demad flat tax as much as you like, but a discussion board invites discussion from whomever would like to participate. If you would like to discuss exclusively with Pirze winners and economists, you'll have to look for another board.


From: earth | Registered: Apr 2001  |  IP: Logged
clockwork
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posted 06 December 2001 07:08 PM      Profile for clockwork     Send New Private Message      Edit/Delete Post
Mr Fleming is again abusing the facts. Curiosuly enough, I just posted this link yesterday:

quote:
It's about time. Those of us who work on international monetary theory have been wondering for a decade when Robert Mundell would get his richly deserved Nobel Memorial Prize in Economic Sciences. Mundell's work is so central to that field, so "seminal"--an overused term that really applies here--that on many disputed issues his ideas are the basis for both sides of the debate. But a layperson might be confused about exactly what Mundell and his prize are really about.

The Wall Street Journal editorial page, rather pathetically, has declared this a "supply-side" Nobel. No surprise there: Editor Robert Bartley's attempts to claim intellectual vindication have become increasingly desperate in recent years. With eight years and counting of Clintonian expansion making Reagan's "seven fat years" look positively shabby, and with supply-side heroes such as Jude Wanniski looking loonier by the day, the Wall Street Journal will take anything it can get. (Since when does Bartley care about what some Swedes think, anyway?) For what it is worth, the citation by the Nobel committee doesn't mention anything Mundell has written since he was adopted as mascot by Bartley et al. some 25 years ago. It is the young Mundell, whose theories still dominate the textbooks, who earned the prize.



From here.

Note who the author is. Now, I kind of suspect Mundell wasn't argueing for a flat tax 25 years ago.

[ December 06, 2001: Message edited by: clockwork ]


From: Pokaroo! | Registered: May 2001  |  IP: Logged
Tommy_Paine
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posted 06 December 2001 09:11 PM      Profile for Tommy_Paine     Send New Private Message      Edit/Delete Post
Flegming astonishes me. Never before have I seen some one who knows so little of what he's talking about make so many salient points. Out of the mouths of bloviates.....

The flat tax as proposed, well, regurgitated by Flegming from the Steve Forbes quadannual Wind Mill Tilting, is not without appeal.

Unfortunately, when the Party formerly known as Reform adopted it, it was careful not to adopt the "no loopholes for the rich" portion of the Forbes Flat Head Tax scheme.

In Canada, home mortgage interest payments as a deduction from income doesn't exist. As a home owner, I was kind of hoping we'd get it as part of Free Trade-- you know, as part of the "level playing field".

ha ha. I kill me.

The usual Flegminesque factual errors aside, he's stumbled, quite accidentally, I am sure, on the salient point that the tax system as it exists in Canada is an affront to liberty.

One law, with everyone beneath it, that's what we need. Why different laws based on economic status? Well, we know why: so the wealthy can steal from the workers, that's why.

That having been said, dullard as I am at math, I know 17% of 50,000 is a lot more onerous on the payee than it is, say 17% of 50,000,000 would be to that payee.

That's one reason we need to graduate the system.

The other reason is redistribution of wealth. Capitalism offers us no mechanism for this; and for capitalism to function, there has to be a redistribution of wealth.

Graduated income tax should serve this vital purpose.


From: The Alley, Behind Montgomery's Tavern | Registered: Apr 2001  |  IP: Logged
Dogbert
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posted 06 December 2001 11:05 PM      Profile for Dogbert     Send New Private Message      Edit/Delete Post
So let's see... the rich and powerful are using tax loopholes to avoid paying tax. So, let's take away their loopholes, but give it back to them via a tax rate that's far lower overall, at least for them. So, the net effect is that we legitimize their low taxes and shift much of the tax burden from the upper and upper-middle classes to the lower middle class, while simultaneously ensuring that there's not enough money for the government services that lower-class Canadians rely on?

Let me guess... you're upper-middle class and you don't want to make the hard choice between the jacuuzi and the big screen TV?


From: Elbonia | Registered: Aug 2001  |  IP: Logged
judym
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posted 07 December 2001 12:36 PM      Profile for judym   Author's Homepage     Send New Private Message      Edit/Delete Post
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From: earth | Registered: Apr 2001  |  IP: Logged
bitbucket
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posted 08 December 2001 02:32 PM      Profile for bitbucket        Edit/Delete Post
In Finland, when you get a speeding ticket, you get fined proportionately to your income.
From: Sea Land | Registered: Dec 2001  |  IP: Logged

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