CANADA WOULD BENEFIT FROM A 15 PERCENT FLAT TAX
January 11, 2008
Most Canadian taxpayers could complete their personal tax returns in about five minutes using a postcard-size form if Canada adopted a 15 percent flat tax, according to a new report by the Fraser Institute.
According to Alvin Rabushka, an internationally renowned expert on tax reform with the Hoover Institution:
- Canadians spend a significant amount of time, energy, and money complying with Canada's complicated tax system at an estimated cost of up to C$30 billion (about U.S. $29.4 billion) annually.
- A large portion of these costs are due to the time and effort spent obtaining and providing receipts, preparing and submitting tax returns, and the services of professionals such as accountants and lawyers.
Further, replacing the existing four federal income tax rates with one low rate removes barriers that discourage people from saving, investing or working harder to earn more money and improve their lives, says Rabushka. Income put back into the economy in the form of savings or investments would not be taxed under the flat tax, which would encourage more savings and investment and lead to a more vibrant and wealthier economy. The changes would also make Canada much more attractive and competitive internationally.
Source: "Tax returns could be done in five minutes on a postcard-size form if Canada adopts 15 percent flat tax," Fraser Institute, January 3, 2008.
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