Quote:
Originally Posted by MarchHare
One other point:
With respect to what you call "loopholes", in many cases these are tax credits that the government authorized to provide an incentive for a particular behaviour. We have many of these in Canada, too. For example, the government thinks it would be a good idea if post-secondary education was more affordable to a greater number of Canadians (a higher educated work force will, at least in theory, lead to a stronger economy), so you can claim tuition fees as a tax credit. Likewise, promoting retirement savings was seen as a good thing, so you can also subtract RRSP contributions from your taxable income (the money will eventually be taxed when you withdraw it during your retirement, but the idea is that you'll be at a lower marginal rate at that time). More recently, we had the Home Renovation Tax Credit to help the economy during the last recession.
It goes without saying that someone who is already wealthy is in a better position to send their kids to university, maximize their RRSP contributions, and renovate their home compared to someone living paycheque-to-paycheque who struggles to pay their rent and feed their family. So in effect, while the government has provided economic incentives that I'm sure most people agree are valuable (higher education, retirement savings, economic stimulus, etc.), they amount to tax "loopholes" that primarily benefit the wealthy.
Those are just three examples that a layman like me knows about from filing my own tax returns. Professional tax accountants (who are more often employed by the rich than the poor) undoubtedly know of many other government programs to reduce one's tax burden, thus enabling the wealthy to pay even less than their fair share of the cost to run society.
So when you talk about closing "loopholes", just be careful what you wish for. We undoubtedly agree that GE shouldn't be allowed to pay zero taxes to the US government by creatively shuffling its earnings to various tax havens around the globe, but are you also against "loopholes" for things like tuition and RRSP credits?
|
I doubt the government is losing much revenue because they're providing incentives for post secondary education or RRSP credits, or the variety of other things you can claim tax credits for. I agree with those kinds of 'loopholes.'
But, subsidizing the oil industry, or allowing GE to get away without paying ANY taxes at all while they have $10 billion dollar quarters is where you're losing your major source of revenue.
Tax credits for post secondary education might help to increase your overall education level throughout the country. RRSP credits will help make sure people put money away for retirement. Things like that are necessary and contribute to the overall health of your country.
When GE gets a multi-billion dollar tax surplus, its not necessary at all. Fair should be fair....and GE should have to pay taxes just like the rest of us.