Then we take your money.
National Post- Our mind-boggling monstrosity of a tax code
The fall 2021 edition of the tax code is a monster-sized book, nearly 3,000 pages in length, and it’s packed with thousands of mind-boggling passages, like Section 125.7(2), found on page 1,038:
“For a qualifying entity for a qualifying period, an overpayment on account of the qualifying entity’s liability under this Part for the taxation year in which the qualifying period ends is deemed to have arisen during the qualifying period in an amount determined by the formula A – B – C + D.”
Gad Saad had a good rant about the Canadian tax system on his most recent appearance with Joe Rogan. It starts at the 33 minute mark.
Government costs money, big government costs big money. Additionally, the more regulations the government creates, the higher administrative and maintenance costs. Inflation? Hey, many people voted for it!
More money for lawyers and accountants
Bingo!
The Tax Code. Gosh, this brought back memories of my Tax Preparation Journey. To the point, even decades ago (the 1980’s) it was known in ‘the industry’ that the Code was a problem. Nobody did s@cbc about it, like a succession of Con majority governments, like the accounting tong, like the lawyer tong. The NP just runs a few ‘the tax code is useless’ as filler. Mind you, Tax Prep is great training for Telemarketing. Loopholes, baby!
Taxation law is deliberately designed to be complicated so as to distract the taxpayer while the state is rummaging through their wallet.
Government is the reason that we can’t have nice things.
It is the feature Not a bug.
The tax laws tell you all you need to know about Canada.
This is Kleptocracy.
Show me the man I show you the crime.
Government can audit and destroy each and every critic.
Using these “laws”.
And you cannot fight them and win,because Revenue Canada insists that their minions written and verbal instructions cannot be trusted..
Think about that.
You face harassment,theft and imprisonment and the “Power”,cannot stand behind their own words..
“Sorry sir,we don’t know what the tax codes calls for”.
Makes me wonder..”What is the Law?”.
Are we back to Chretien Tax days,under Pierre the Idiot?
Where the tax form was truly simple..
“What was your income last year?
Add $1 and submit total to Revenue Canada”.
Given the condition of the social contract,I figure compliance will soon be of the same quality.
“Add $1 and submit to Revenue Canada”
Next up? Don’t forget to add GST. After all you are paying for ‘services’.
Where the tax form was truly simple..
Yup. Earlier this year, I shredded my parents’ old tax returns, going back some 5 decades. The older forms were definitely a lot simpler and required less paper.
Solution: a 10% flat tax, with a cutoff of say, $15K. Below that, you pay nothing. Above that- NO exemptions whatsoever.
You’re welcome.
Neil Boortz used to advocate for the Fair Tax Plan, which was (IIRC) a flat 26% consumption tax charged only on consumers. No B2B, and every American would receive as a refund the equivalent of the 26% tax paid on up to $16,000USD (or wherever the poverty line was).
There are some obvious problems with it, but it would be better than the current model. The real problem is that like the HST and GST, politicians will find ways to jigger with the application to buy votes.
And that is just one of the taxes, Income Tax.
Feds introduced Income Tax to finance WW1 which ended more than 100 years ago. Should be paid for soon. What excuse did the provinces use to introduce income tax? Just socialism. They have it.
I not so fondly recall trying to explain the arithmetic behind the Canadian dividend tax credit. The formula was pretty exact and accurate but impossible to rationally explain to the untutored, who included lots of financial professionals. And then of course it got further complicated by different formulae for public vs. private corporations.
“WTF, you mean I have to report 50% more income than I actually earned”. Yes, but …. but … you see …. trust me it all works out.
Just as it is impossible to envision politician term limits, it is impossible to envision a simplified income tax. There are professional people to keep very gainfully employed and special interest groups upon whom to bestow favours.
I know what you’re referring to.
I’ve been doing my own returns for more than 30 years. Most of the income from my inheritance is in the form of dividends from Canadian corporations, so I can claim that credit….. well, sort of.
The problem the government has with that is that, after claiming those credits, I don’t pay enough tax as far as it’s concerned. As one CRA munchkin told me, I’m not allowed to have “too good of a year”, so I have to fill out that dad-blasted minimum tax form T691.
That document is in itself, to borrow a line from Joseph Conrad’s novel Typhoon, enough to make a saint swear. Worse yet, the &*($@#$%^*_+ thing is confusing in places….. and there’s no proper provision for reporting it on the main tax form. And I got it wrong this time.
The minimum tax malarkey was courtesy of PM Spidey Undies and his flunky Willy Porno.
BADR – don’t die too early. You can recover the minimum tax gradually if your “proper” income is adequate. However, should you die with a substantial amount in that minimum tax pocket, chances are your final return will not generate enough tax to sop it up. The government wins big ;-(
I offer this comment: look at the US tax code in comparison. Both systems are rule and control by obscurity.
https://taxfoundation.org/how-many-words-are-tax-code
The next time someone brings up “Ignorance of the law is no excuse” ask them how long they spent learning the tax code.
precisely.
the followup Q l have at the ready is to inquire why we pay lawyers 4 figures/hour
to fight a case if things are so straightforward.
no need for a 2nd followup.
It ain’t that complex if you have any understanding of how government works. I been playing their game for over 60 years and sometimes I win and sometimes they get a bit more than I wanted to give them. Either way, watch your cash and your so called legal liabilities.
Burn This Book.
historically, rev canada aka cra tried and failed 3 times to steal unowed taxes from me.
l buried them with documents each time. last occasion had all the correspondence laid out at the hamilton orifice counter after being told to take it up w st catharines orifice since they were the ones made the final attempt.
whereupon l posited if l was in Inuvik wd l get told the same?
l then proceeded to threaten to take the documents spread out, to the hamilton spectator ‘they like this kind of stuff’. this was right after some bad publicity re the guelph orifice and their unwritten quotas.
they relented. came a revised version cancelling all penalties and interest requesting l top things up by 100 bucks or so. ok.
Seems like Gad Saad did nothing to protect himself from the highest tax hit. There are many things he could have done to drastically improve that outcome. If you’re not willing to spend a few grand on a tax planner then don’t complain when CRA takes all they can get.
Have just come off a brutal tax season. First off, CRA/Service Canada really messed up T4A’s for seniors who got the $500 top-up (the T4A’s were saying got $1000), the CRA/Service Canada didn’t bother sending out slips to seniors until late March. As these slips are normally sent out third week in February, there was considerable anxiety amongst seniors and I made certain to call all my senior clients to advise them that it was the government, not them. Had at least one senior practically in tears as was convinced had thrown forms into garbage. Even then, CRA’s downloads were very hit-and-miss to the point I had all my senior seniors check with the banks to confirm had actually received the $500.
Things went from bad to worse. Was doing the AFR (automatically fill return) download from CRA for all my clients, but there was a serious disconnect between what CRA had on file and what I was being handed. Think three clients only for which the AFR and what I was handed actually matched. And I’m not talking about T3 and T5008 issues where the client is handed a consolidated statement while CRA gets every fund (T3) or transaction (T5008) – that we know about and have ways to reconcile. I’m talking about having T4’s in front of me which CRA doesn’t have even though it’s mid-April and other missing T-slips, not to mention Service Canada’s erratic reporting of those T4A’s (would see clients who had slip but CRA didn’t, and vice versa). Just comparing this year’s returns to last year’s and then confirming potentially missing slips was a nightmare. Every tax preparer I know has had a post-season crash; much worse than previous years.