An alternative tax-reform plan

In the debate over tax reform, Finance Minister Bill Morneau seems to want to divide taxpayers into two classes — those who have holding and operating companies, and the rest of the tax-filing population.

I submit there is another class of taxpayers — those who work for the federal and provincial governments and large municipalities.

These employees have health insurance wherein the government contributes 50 per cent of the cost or more. When they retire, the plan continues until they die. The government share is not taxed as a taxable benefit federally or in other provinces.

As well, these employees have pension plans that are in full force way before 72 years of age. In fact, at 65 or earlier, they are fully vested.

Again, these pension plans are financed 50 per cent by employers and 50 per cent by employees, at the most. Again, the government share is not taxed as a taxable benefit.

Furthermore, unlike private pension plans and RRSPs, these pension plans are defined benefit plans — guaranteed pensions not subject to stock market fluctuations.

My proposal: tax all healthplan and pension contributions paid by employers as a taxable benefit. By my calculation, the tax revenue received would be the same as what Morneau’s proposals would generate.

The tax system would not have to be dramatically overhauled, and most of the population would see this as levelling the playing field versus giving advantages to fat cat government employees. Myer Spivak, CA, CPA, Montreal