Path: utzoo!dciem!nrcaer!heraclitus!rayt
From: rayt@heraclitus.UUCP (R.)
Newsgroups: can.general
Subject: Re: Flat Tax Rate
Message-ID: <6909@heraclitus.UUCP>
Date: 22 Aug 89 19:14:59 GMT
References: <401@fs1.ee.ubc.ca> <1713@cs-spool.calgary.UUCP> <644@UALTAVM.BITNET>
Reply-To: rayt@cognos.UUCP (R.)
Distribution: can
Organization: Cognos Inc., Ottawa, Canada
Lines: 45

In article <644@UALTAVM.BITNET> Tim McLellan writes, regarding Michael
David Farebrother's comment concerning a flat tax rate
  
>I have been fond of this idea for a long time now.  Peter Pocklington in one
>election campaign a few years back, also had this scheme in mind.
  
>It would be so simple, and so fair.  If everyone had to pay tax on their gross
>income, maybe we could all pay a little less in the end.  The rich would have
>no write offs.
  
>Every month, your employer (or whoever) would simply remit your taxes directly
>to Rev Canada.  No forms, no headaches, no tax prep rip-offs.
  
>Naw, that'd be too simple, easy, fair, ...

The biggest problem I have with this is that it misunderstands the position
of the entrepreneur: they are not (usually) wage earners and are INVESTING
(i.e. suppling capital) thereby allowing businesses to flourish. Thus, unlike
the typical wage earner, their income involves a significant amount of RISK,
and it is through that risk that the country as a whole prospers. One would
like to ENCOURAGE this activity as much as possible, and equally, it seems a
little odd to me that such an individual should expect to have that income
taxed in the same way as the wage earner who is employable only through the
agency of said entrepreneurs (outside of the govenment sector, that is), and,
especially in our modern society, demands varying degrees of wage GUARANTEE
(i.e. tries to minimize his risk asymptotically to zero).

Once this is appreciated, then further difficulties arise: Are all investments
of equal value or risk (e.g. gas and crude oil exploration or steel mill
refurbishing and construction versus, say a new corner Becker's)? Does this
apparent incommensurability warrant a different tax scheme? More indirectly,
there are investments in stock, bonds, etc., etc., etc.; where do these fit?

Further arguments can be applied to all sorts of ventures in an effort to
separate legitimate operating costs (as has been discussed already by others),
bonuses, etc. In short then, the flat rate scheme may be simple, but in
a complex business environment, if not unfair, is at least counterproductive,
and therefore self-destructive.

							R.
-- 
Ray Tigg                          |  Cognos Incorporated
                                  |  P.O. Box 9707
(613) 738-1338 x5013              |  3755 Riverside Dr.
UUCP: rayt@cognos.uucp            |  Ottawa, Ontario CANADA K1G 3Z4