Newsgroups: can.general
Path: utzoo!utgpu!jarvis.csri.toronto.edu!genie.csri!mart
From: mart@csri.toronto.edu (Mart Molle)
Subject: Re: income tax tips #23: new personal income tax rates
Message-ID: <1989Jun16.103052.25303@jarvis.csri.toronto.edu>
Summary: We always pay sales taxes on other taxes, why not on duty?
Organization: University of Toronto, CSRI
References: <1989Jun12.133058.28912@lsuc.on.ca> <2311@uwovax.uwo.ca> <2743@sparkles.dcss.McMaster.CA>


In article <2743@sparkles.dcss.McMaster.CA> dan@sparkles.UUCP (Dan Trottier) writes:
|
|[Continuing discussion of various forms of overlooked taxation deleted]
|
|You can added import duties to that list. This indirect tax results in
|much higher prices for many goods that are produced outside the country.

But remember that duties are levied both as "revenue generating" and as
"policy reinforcement" tools.  The one you're talking about is definitely
of the latter kind, intended to protect domestic suppliers from foreign
competition, to encourage us to develop domestic oil and gas instead of
buying cheap OPEC oil, to penalize us if we become dependent on South African
chromium, or whatever.  Ottawa isn't going to get rich by slapping [let's
guess 25%] in duty and FST on a made-in-USA Amana refrigerator, but it
sure makes the technologically less advanced Canadian models (which, in
fairness, also lack the economies of scale of large production runs...)
look more competitive!  I think your comment is more of a "free trade"
issue than a "they want to secretly tax away all my money" issue....

|The part I hate is having to pay sales tax on top of the duties levied
|against some imported goods. The result is paying tax on taxes.

But we pay taxes upon taxes all the time.  Why should duties be any different?
For example, part of the cost of domestic goods and services is corporate
taxes.  Since this is added to the cost of the widget I buy, I'm paying
sales tax on my share of their corporate income tax, right?  And, getting
back to your imported goods example, having the customs agents collect sales
tax on the value *after* the duty has been applied is just making the situation
fair to the local dealer of imported widgets.  S/he must pay the same duties
as you do in order to import a widget, so the cost of the duties are built in
to the selling price.  Thus, whether you buy widgets from a foreign supplier
and bring themt through customs yourself, or go to the local dealer, you end
up paying sales tax on the on the duty.

Mart L. Molle
Computer Systems Research Institute
University of Toronto
Toronto Canada M5S 1A4
(416)978-4928