Flat tax?
 

How does everyone here feel about a flat tax? I'm not sure what other provinces have implemeted such a scheme, but any Albertans' opinions would be especially welcome.

Re: Flat tax?
 

There is no Provincial Tax in Alberta so they already have a flat tax the GST.

Re: Flat tax?
 

I think he means provincial income tax.

Re: Flat tax?
 

Actually, I think the OP is referring to the "Harmonised Sales Tax" which will replace the PST and GST in Ontario sometime in the next year.

Some items which currently don't have PST/GST will cost more because the flat HST rate is going to be 13% for anything taxable. Though people who qualify will get up to $1,000 in rebate cheques per year to offset the higher tax.

Re: Flat tax?
 

I assumed the OH is/was talking about Flat Tax as described here.

A flat tax (short for flat rate tax) is a tax system with a constant tax rate.[1] Usually the term flat tax would refer to household income (and sometimes corporate profits) being taxed at one marginal rate, in contrast with progressive taxes that may vary according to such parameters as income or usage levels. Flat taxes generally offer simplicity in the tax code, which has been reported to increase compliance and decrease administration costs.

It has been proposed for Canada a number of times over the years. A more detailed explanation can be read at http://en.wikipedia.org/wiki/Flat_tax

Re: Flat tax?
 

Provincial income tax isn't enough to get excited about. A federal flat tax is a very bad idea. Fortunately there's bugger all chance of it happening.

Re: Flat tax?
 

^This.

I think it would be a great idea, especially now in Ontario with this horrible recession that's going on. It's a true "fair tax" in my opinion, that would simplify your taxes, and it would give people an incentive to work more and save more. Companies would be taxed at the same rate, and would have an incentive to expand operations and grow, unlike the system we have now that punishes those who want to earn more, a flat tax would finally get rid of the bracketed system we now have, which I think is crap if you ask me.

Someone here convince me it wouldn't be a good idea ;)

Re: Flat tax?
 

Including corporation tax is too complicated for me at this time on a weekend. Let's look first at individuals;

it would force the poor into starvation

it would allow the rich to afford a second Bentley per household.

The idea is unsaleably wrong in Texas nevermind Ontario.

Re: Flat tax?
 

What would you set the flat rate at? Lower income earners can pay around 20% I believe, whereas upper income earners can probably pay up to 50% of their income in tax.

Wherever you set it above the lower limit would penalise the low-income workers, especially part-time workers, and give higher income workers more wealth.

Raising the limit over which tax would be payable would be essential in my opinion if anyone were to consider a flat tax.

Dbd put it much better than I have.

Re: Flat tax?
 

:rolleyes:

Maybe in Soviet Russia, but not in a relatively prosperous democracy like we have here. The savings a government would make from implementing a flat tax would allow them to create a low income threshold below which people would not be subjected to ANY income taxes. Also, in addition, the basic personal amount could be increased for lower income earners without touching the revenue stream.

Bring it on.

Last time I checked there are a lot of rednecks in Alberda and they have it :thumbsup:

Re: Flat tax?
 

We're not Alberta.

Re: Flat tax?
 

Then that's not a flat tax.

That's a bracketed system.


What matters is the federal tax rate, not the provincial one. "Bring it on", you say, as if you were rich, but what if the rate was set at 65%?

Re: Flat tax?
 

20% across the board would do it.

Re: Flat tax?
 

There is a problem with this approach. You create a whole class of people who have no stake in the income tax system, and who therefore create a demand for more government spending to be paid for by the income tax paying classes.

I completely understand that high marginal rates of taxation tends to limit the creation of wealth. However, I also want to live in a society where basic rights to health, shelter and safety are available to all citizens. Governments face difficult choices to facilitate both. Every liberal democracy, and every country that we would want to live in, has opted for progressive rates of taxation. I have yet to hear a compelling argument to the contrary.

Re: Flat tax?
 

20% income tax for everyone would lose the government millions of dollars. As the Government of Canada forecasts a $50 billion deficit over the coming years, I doubt they'd want to lose amount of income.