Tuesday, October 17, 2017

In taxation, as in life, not everyone will be happy

An article in today's Report On Business introduced to me an interesting idea I had not thought about before (I don't necessarily agree with much of the rest of the article, but this part at least gives food for thought).
With respect to the ongoing tax reforms of the federal Liberals, the article points out that, while most people in Canada would agree that our tax system as a whole should be (and generally speaking is) fair, equitable and progressive, we have got to the point where our expectations have shifted so much that every new tweak to the system also needs to be fair, equitable and progressive. In Mr. Speer's words: "It's no longer adequate for overall spending and taxation to be equitable and progressive. Now, the new test seems to be that every spending and tax measure must be equitable and progressive. The scope for compromise is increasingly nil in such a zero-sum world."
There is an element of truth to this point. Any new tax measure introduced will always have winners and losers. Someone somewhere will always complain about it, claiming that it is unfair in one way or another. And if we are starting off with a tax system which is generally fair, equitable and progressive, any new fair, equitable and progressive measure introduced is not going to make much difference.
Except that the point only goes so far. It is still possible to want to make the overall tax system MORE progressive or MORE equitable. So, new tax measures may seem unfair to some individuals who are affected, but they may still improve the overall system ("improve", that is, in the eyes of the government of the day, which was voted in by a majority of the population).
This seems to be what is happening at the moment with the ongoing debate over small business taxation. Some individuals may feel aggrieved by the proposed measures - you can't please all the people all the time - but the country's tax system as a whole may be improved by them.

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