Billions lost through tax loopholes and preferences: Report
In spite of the extensive free advertising the program received from suppliers like Home Depot and Rona, it seems relatively few Canadians took advantage of the much hyped Home Renovation Tax Credit on their tax returns last year.
In a report outlining the billions of dollars Ottawa gives up in targeted tax credits, Department of Finance officials admitted that only three-quarters of the $3-billion set aside for the high-profile program ever got paid out.
Is it time to forget these types of tax credits altogether? Definitely, says Toby Sanger, senior economist with the Canadian Union of Public Employees.
Sanger suggests that tax credits such as this actually fill the tax system with holes and make tax filing more complicated and inequitable.
“A number of the most expensive tax preferences and loopholes are also highly regressive and – I would argue – damaging for the economy,” Sanger argues.
Sanger believes that the most “egregious” of these is the employee stock option deduction, a $590-million expense that allows employees receiving company stock options to pay tax at half the rate that would apply if the benefit were in salary. This loophole allows Canada’s top and executives to save millions in taxes.
Another regressive and expensive tax measure of very dubious economic benefit is the tax preference that allows capital gains from investment income to be taxed at half the normal rate, he adds – given that half the value of this loophole goes to the top 1 per cent of highest income taxfilers.
These measures were supposedly introduced to spur real investment and economic growth, but there isn’t much evidence that they’ve actually achieved that, Sanger maintains.
Instead, they have likely helped fuel the asset booms and mergers and acquisitions that are destabilizing our economy — as well as serving to increase income inequality, Sanger says.
Where do yiu stand? Socialist claptrap or an accurate indictment of what's wrong with our tax system?
By Gordon Powers, MSN Money
Posted by: beastofburden | Jan 29, 2022 9:29:22 PM
@Canuckguy
gee I was wondering when someone was going say something so brilliant !! had one for 25 years...and he had a young co-worker...and I have a big tax bill due to him ...hummm do I want or need another man ..NO.And back to the subject..I agree with Retired Bob ..this government wants us to work until we die so they can get more taxes ..and being who we are in this country we just put up with it ,,really ... shame on us .
Posted by: Witchdoctor | Jan 30, 2022 3:42:03 PM
I did 15000 worth of work the year before when I had a new kitchen installed. I did claim some credits under the new plan but not much.
I suspect a lot of people didn't claim because it was too cumbersome. The documentation required to claim was excessive.
The government could solve a lot of problems if they simply raised the GST and did away with income tax altogether. The GST is the most efficient tax the government has. It's effectively a tax on the wealthy.
Posted by: Richard | Jan 30, 2022 4:15:31 PM
LOL... beastofburden... is that a description of your working condition or your physical "condition". And you wonder why your hubby dumped you for the youngster. "and why is my tax bill so high you ask... long story with probaly no empathy from anyone here. Maybe you got that right. If you owe THAT much in year-end taxes, you're certainly NOT getting enough taken off at the source. And whatcha beeatchin' about if you'll have your house paid off in 6 years... it's called equity.
Posted by: ray | Jan 30, 2022 7:51:42 PM
To Huh? finally someone who makes sense. It's hard to believe that so many distrust government, each of us is responsible to understand our tax system and how it is influenced. Wake up!
Posted by: XXXXl | Jan 30, 2022 9:20:59 PM
I am not able to benefit from the tax credit as I NO money to do my renovation! Why not just give every Canadian a sum of money nad they can do what ever they want? I'm in the low income range but also pay my taxes and get no GST refund. So, what do I get? Our government is run by a bunch of IDIOTS!!
Screw the Candian government!!!!!!!!!!
Posted by: Retiredjustbeforrecession | Jan 30, 2022 11:12:30 PM
Let's see, the tax credit came when??? Just as every average income earner was being killed by the mismanagement of our investments and extending the retirement dates of most. And the government thinks we would now have extra money to spend on renovations??? I think spending the money in that manner would have just contributed to the spending mismanagement.
Posted by: Venus Project | Jan 31, 2022 12:17:05 PM
Economist = Monetary Propagandist
Economic growth, is a fallacy, for you cannot have growth in a monetary-market, fractional banking system. That is why there isn't ANY evidence it has been achieved, because it is not possible.I do agree that the tax system and monetary system itself has destabilized the future of the planet and inequality within the human species. Money does not fix anything. Politicians do not fix anything. It is only the people that can effect change.
To all of you, there is another way. That you are sick of the current system is the start. To have an open mind is the second. To join the Zeitgeist Movement is the third.
The world monetary-market system is set up to fail, and soon. It is happening now, all over the world, and will continue to the total economic collapse that is looming and guaranteed.
Please educate yourself on what is happening, and that there is a sustainable plan for the survival of the planet.
On Jan. 15th, 2011, "Zeitgeist: Moving Forward" was released theatrically to sold out crowds in 60 countries; 31 languages; 295 cities and 341 Venues. It has been noted as the largest non-profit independent film release in history.
This is a non-commercial work and is available online for free viewing and no restrictions apply to uploading/download/posting/linking - as long as no money is exchanged.
A Free DVD Torrent of the full 2 hr and 42 min film in 30 languages is also made available through the main website [below], with instructions on how one can download and burn the movie to DVD themselves. His other films are also freely available in this format.
Zeitgeist: Moving Forward was released on the internet on YouTube on January 25th and already has 1.4 million views.
Spread the word about the Zeitgeist Movement and the Venus Project. Humanity depends on you.
Posted by: don | Jan 31, 2022 5:13:04 PM
Business does not pay GST so it seems there are people out there that think that business should pay 0? They use roads and services also so how would they contribute if not through income tax? It is already bad enough as it is. Only GST......anyone with money would just spend it out of the country and again pay 0 or hoard it and again pay 0. This would definatly make the rich richer. I dont understand this idea to do away with income tax and go to GST only. It makes no sense to me. Is there something I am missing? Is this idea that business would also pay GST?