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Taxation

The problem:

Canada’s economic future is threatened by a crushing—and ever-growing —burden of taxes. Punishing levels of taxation make Canada uncompetitive in the global market-place; they encourage growth of an ‘underground economy’ that avoids taxation; they impose the penalty of taxation unequally; the present tax regime is so complex that no one in Canada—not even the Finance Minister—can claim to understand it; the legal and accounting burden of tax avoidance requires a massive bureaucracy that siphons off time and intelligence and financial resources that would be better utilized in addressing other serious problems.

Current Government strategy: (and how it falls short)

The Harper government’s lavish spending, driving Canada deeper into debt, can only increase the tax burden. The government has not engaged in much needed meaningful changes to the Canadian tax system.

The Harper government has repeatedly broken promises: e.g., Mr. Harper’s promise that his government would “never tax income trusts”—the breaking of which looted $30 billion from seniors’ retirement accounts, and eviscerated the capital-formation ability of Canada’s resource industries.

The Opposition Strategy: (and how it falls short)

The Liberals created an economic climate in which more than 80 percent of the national debts was compounded interest. The Liberal government of Paul Martin even brought in two budgets within two months, as they bowed to the NDP’s demands for more spending, thus further increasing the tax burden.

The CHP’s Better Solution:

  1. Abolish the income tax, which is unequal and which violates the principle of private property, which economist Hernando DeSoto says is the essential element of North American prosperity.
  2. Replace it with a consumption tax of 17-20%, with exemptions for the necessities of life (taking the form of an enhancement of the GST rebate).
  3. Curtail government spending to leave more money in the pockets of Canadians, to consume or invest as they see fit.

Eliminate the income tax and implement a ‘Fair Tax’ that would boost the economy and put Canadians in charge of the tax they pay.

What is the Fair Tax? The Fair Tax is a comprehensive yet simple proposal that replaces all federal income taxes with a national retail sales tax. It includes protection for low income Canadians by providing a pre-bate (quarterly payments like the current GST rebate) to ensure no Canadian pays federal taxes on spending up to the poverty level, and is a dollar-for-dollar federal revenue replacement. It is widely recognised by economists to be the most equitable form of taxation. This legislation abolishes all federal personal and corporate income taxes, estate, gift, and capital gains, and replaces them with one simple, visible, federal retail sales tax – administered by existing sales tax authorities. The Fair Tax taxes us only on what we choose to spend on new goods or services, not on what we earn.

It’s time for a better solution!

The Fair Tax will create jobs in Canada. Taxing spending has the effect of boosting savings. Savings translates into investments; investments translate into jobs. Jobs stimulate spending, closing the cycle which is a benefit to the economy and Canadians.

Canada has a massive trade deficit with other nations. A Fair Tax will provide a major boost to the competitiveness of Canadian industry. Canadian businesses will be much less likely to locate their production and head offices in other countries, and foreign companies will have an incentive to locate in Canada, putting Canadians to work!

The CHP has a fresh approach to stimulating the economy and providing jobs for Canadians and helping them keep their hard-earned income. The CHP is committed to revitalising the Canadian economy with a Fair Tax plan that is simple and transparent—the two most important aspects of any tax policy.