Bureaucrat’s dream, citizen’s nightmare
Modern tax form is incomprehensible to most Canadians, Jim Garner writes.
In 1960, I filed my first income tax return — a simple six-page document. After calculating federal tax, I added 49 per cent of that for the province. It took less than 15 minutes.
But year after year, government after government, things have changed. The current tax package has 170 pages, much of it incomprehensible to the ordinary citizen. Only 75 pages are sequentially numbered. Federal and provincial pages are muddled up together. Where there is an entry be made, the taxpayer may be referred to another (unnumbered) page, sometimes to a third one. Line 317 is followed by lines 362, 395, 363, 398, 369 and 313 in that order.
You think MPs do their own tax returns? I remember in the 1970s, the then-minister of national revenue told a news conference she didn’t do hers. I doubt other MPs are different. Do they even understand the finance legislation they pass yearly?
It used to be that the tax return showed no tax payable on the first level of income, a higher rate on the next level and so on. This was easy to understand. Then the government of the day replaced it with an obscure system of “non-refundable tax credits.” The finance minister said this made the system “more progressive.” Actually, it merely added one more complication to the tax return. Yet, all the minister had to do for progressiveness was change the income bands for the various levels of tax.
So now government is “encouraging” citizens to use computer software to do the chore. The CRA (Canadian Revenue Agency) claims 90 per cent of returns are filed online. What this means in practice is that more than half of Canadian taxpayers pay $50 and up to have their returns done by professional tax preparers (who are required under threat of a fine to file online). The preparers assert, through their professional association, that they do 14 million returns a year; they likely enjoy a gross approaching $1 billion for performing the service. Alternatively, people can either buy an app to do the job or download a free program — which is what I do, and it works OK, thank you very much.
The government uses tax deductions to encourage activities deemed desirable. For example, the CRA will reduce the taxable income (up to $10,000) of senior citizens who spend on railings and other projects to make their homes safer. But consider: Anybody who doesn’t have enough income to pay tax isn’t going to get any benefit from this government largesse. Those with more income get back some of what they spent. The really poor are out of luck.
Doesn’t sound very progressive to me. Indeed, economists have for years been telling governments that outright grants are more efficient than tax concessions.
Sure, the government needs money to do its job; I’d personally support higher taxes to have them do that job better. Unfortunately there seems to be little association between level of cash available and level of job performance. (Just look at the $1-billion-plus Phoenix payroll fiasco; the senior management can’t get that right even when it’s their own paycheques they’re screwing up.)
To get a copy of this year’s English-language tax guide, I went to Ottawa’s main post office and five sub-offices. Nobody had one. The government wants our money but makes it hard for citizens to find hard-copy instructions to help them pay it.
Playwright G.B. Shaw once said governments couldn’t run a fish and chip shop. He may have been right. They certainly can’t run much of a finance system. The one we have in Canada is a bureaucrat’s dream — and an ordinary citizen’s nightmare.
Do (MPs) even understand the finance legislation they pass yearly?