Treacherous tax forms will eventually sink the ship of state

Time for political parties to support easing of April’s cruellest process

April is the cruellest month, wrote T.S. Eliot, no doubt thinking of his income tax, which is due April 15 in the U.S. and April 30 here. I was going to say that in 1922, when Eliot published that line in The Waste Land, income tax was minimal by modern standards so it couldn’t really have been on his mind. But in fact the standard rate of income tax in the U.K., where this expatriate Missourian lived, was five shillings on the pound, or 25 per cent. So maybe taxes were on his mind. He was a poet who, unusually, was also a banker, so poverty wouldn’t have saved him from income tax, as it does many poets.

April may well be cruel, “mixing memory and desire,” but tax prep is probably not the reason. A poll two years ago revealed 41 per cent of Canadians actually enjoy filling out their tax forms, though not necessarily paying their taxes. On the other hand, lots of Canadians don’t do their taxes themselves. Just over half say they intend to farm them out to someone else.

As an economist, I’m of two minds about the widespread use of tax preparers. Economists understand the benefits of specialization (it’s our specialization!) and if a taxpayer doesn’t want to spend time working through the intricacies of the tax system, hiring someone who has incurred the high fixed costs of learning what’s going on makes perfect sense. I did my own tuneups on the first car I owned but it didn’t take me long to figure out both that I had better things to do with my time and that I felt more secure handing the job to people who did tune-ups for a living.

But is it really a good thing that the tax system is now so complicated ordinary citizens feel they can’t master it? Wouldn’t it be better if people understood how (and preferably why) they’re being taxed? Take the T1 General form. It’s four pages long. But there’s also a two-page T1 Schedule. Don’t ask me why but I still have a copy of the first income tax form I filled out more than 40 years ago. It’s only four pages total and the layout is very airy: One of the pages is half blank.

This year’s T1 Schedule includes almost 30 non-refundable tax credits. Alas, I’m only eligible for a few, which I know is my own fault: If I volunteered for search and rescue or firefighting, I could qualify for those credits, too. As it is, about all I get is the tax credit for public transit.

Our family are longtime users of public transit, not for ideological or do-good reasons but because it’s easier and, with Montreal’s hellacious traffic, more reliable, even if our infrastructure is non-Mussolini, i.e., the trains don’t always run on time.

But we used public transit before the tax credit came in, we continue to use public transit and we would still use public transit even if the government withdrew the credit, which the current federal government obviously won’t do since it brought it in. I suspect most public transit users are like us. The public transit tax credit gives us a nice gift from taxpayers in general — thank you very much! — and has zero effect on our behaviour.

But it adds another line to the tax form. These lines are like barnacles on a ship’s hull. Every government adds two or three and no government removes any: Even the opposition parties, if they replace the Tories, probably won’t end the public transit credit. The public transit lobby would create an uproar. What government could appear to be against public transit?

But as any mariner knows, if you want to stay seaworthy, at some stage you’ve got to scrape off all the barnacles. If a Simpler-Tax Party were running in this year’s federal election, they’d have my vote.

Wouldn’t it be better if people understood how (and preferably why) they’re being taxed?