Monday, May 02, 2016

Canadian taxpayers subsidizing government inefficiency

Well, who knew? It seems that a steady 60% of Canadian tax returns result in a refund, judging by stats for the last 10 years. Only around 15-20% result in a balance owing, and about 20-25% are nil returns (in theory, what should happen if the tax collection system is working efficiently).
So, 60% of us are financing the government with free loans each and every year. And I'll bet it's not the wealthiest 60% either. More spending money in the hands of taxpayers throughout the year (as opposed to an uncertain windfall each April) would probably be more beneficial to the Canadian economy as well.
Our own tax payable/refund status tends to vary each year, usually depending on tweaks of our RRSP contributions, but also - a bit of a pet peeve of mine - on the government's insistence on slapping on a demand for payments on account as soon as it spots any balance owed in the previous tax year. I understand that it makes sense for them to do this if there is consistently a balance owed over a period of years. But, please, not after a single year. It has happened many times that we have had tax payable for an individual tax year, followed by a demand for payments on account the next year, resulting in - guess what? - a tax refund due.
It's really not a big deal, but it's kind of annoying, as well as inefficient.

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