A one-time school project gone terribly, terribly wrong.

02 April 2007

For the Preservation of Our Sacred Fortunes

The purpose of the Canadian tax code.

I have a simple philosophy regarding my taxes: if it's too complicated for an average citizen (me) to fill out unaided, then the government needs to simplify the tax code.

So I'm burrowing my way through the dense mass of paper that complicates the lives of those of us too cheap to pay some someone to timidly honk the nuts of government and make them give me back my money ...

When I realize the fundamental purpose of the tax code.

It is to preserve the fortunes of millionaires.

Do you doubt this? Consider then, the difference between the way charitable donations are treated and the way political contributions are handled.

With charitable contributions, the calculation comes one full page before the end of the form. You have to complete a "schedule". This process allows you to write off:
15% of amounts up to $200
29% of amounts above that figure.

So already, someone making poverty income in Canada, let's say $30,000, is scrod. Assuming he can spare it, he donates $300 to worthy causes. He is allowed to deduct $60. That's it.

Having donated 1% of his total income to improving this groaning world he is allowed to claim 0.2% back.

Not even as a refund, but as a "non-refundable tax credit"; and if his deductions are more than his taxes, that credit doesn't count toward anything, it just vanishes.

However, the calculation for political contributions is the second-to-last step in the calculation chain, and rather more straightforward. It consists of:
1) State amount of political contributions.
2) Deduct that amount.

That's it.

So Joe Millionaire, income $100,000, makes a $1,000 dollar contribution to Stephen Harper or whomever and his merry band(its). That's 1% of his income.

He gets every penny back. It's reduced not as a "non-refundable credit", but off his taxes owing.

Presumably politicians regard such contributions as more worthy than donations to UNICEF, for example. And what motivation is there for changing this regime?

Well let's consider who writes the tax code ...

The conclusion is left as an exercise for the student.


At 6:25 p.m., Anonymous raincoaster said...

$30,000 is poverty? I gotta get out more.

At 9:28 a.m., Blogger Metro said...

As most provincial governments would say: "It depends". Particularly on your interpretation of the word "poverty".

I believe that poverty is the ability to feed, house, and clothe yourself, and nothing at all more.

Where it gets complicated is the question of "what is a basic need"?

I have met (and recently) people who define poverty as $40k+ per year, four vehicles, an in-ground pool, and for some reason a second mortgage.


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