Path: utzoo!utgpu!watmath!watdragon!jmsellens
From: jmsellens@watdragon.waterloo.edu (John M. Sellens)
Newsgroups: can.general
Subject: Re: Flat Tax Rate
Message-ID: <15984@watdragon.waterloo.edu>
Date: 18 Aug 89 21:27:35 GMT
References: <401@fs1.ee.ubc.ca> <1713@cs-spool.calgary.UUCP> <644@UALTAVM.BITNET>
Reply-To: jmsellens@watdragon.waterloo.edu (John M. Sellens)
Distribution: can
Organization: U. of Waterloo, Ontario
Lines: 18


One of the things that the Canadian income tax system tries to do is
encourage certain types of expenditure (e.g. scientific research,
Canadian movies, etc.).  You can't do this under a flat tax system.
So an opinion on a flat tax system essentially includes an opinion on
this type of expenditure encouragement.

Another thing that the tax system tries to do is give people with lower
incomes a lower relative tax rate.  Someone suggested a $20,000 lower
bound.  But what happens if you have $20,001 of income?  So you need
a transitional provision around such a boundary.  Do you believe that
a family with more members deserves a break i.e. a higher lower bound?

If you believe that everyone should pay the same proportion, regardless
of any other attributes of a person, then a flat rate tax might be
workable.  But if you believe that some people deserve a break, or that
some expenditures are more "worthwhile" than others, a flat rate tax
system quickly degenerates into something like we have now.