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Tax choice, but altered?
In Canada, the higher an individual’s salary is, the higher their taxation rates become. Taxation rates are determined by tax brackets- ranges of incomes that get taxed at the same rate. So the more income a person earns, the more money they have to return in taxes. Even though citizens are forced to return such high amounts of money (the top 1 percent returning 33 percent of their annual income) (H&R Block Canada Inc., 1), they only get to voice their opinion on what happens with their tax dollars when it comes to election day, once every four years. When voicing their opinions, they put their trust solely into politicians, who do not necessarily keep all of their promises.
So, how do citizens hold the politicians whom they’ve elected accountable? How else do they express their desires directly, if elections are simply not enough? The pre-existing concept of tax choice, otherwise known as pragmatarianism, where every citizen can delegate all their income taxes to an area that interests them, is a principle that could prove to be very beneficial to Canada. However, this concept has many flaws. If it were to be slightly altered, so that individuals would delegate only a portion of their income taxes, besides being beneficial, it would also be highly effective. With personal income tax adding up to roughly 49 percent of taxes collected, citizens should have some say as to where their tax dollars will be spent. Tax choice itself, a concept introduced in the late 1970s, can only now be successfully implemented thanks to the advancement of technology. In conjunction with this slight modification, it will help citizens to voice their opinions (other than by voting for politicians) and Canadians will also be able to make a real impact with regards to the causes they believe in.
To begin, the incorporation of this version of tax choice will allow citizens to be able to directly influence their lives by choosing where they want to dedicate a portion of their taxes. People all have different opinions and views on social issues and political decisions. For example, people who would like to promote the Black Lives Matter movement may want to direct funds to related departments and services, while individuals who are more inclined to support climate change and its revolving issues can allocate funds to its related branches. The main reason as to why tax choice itself is not a viable addition to the Canadian tax system is that people do not think that citizens will be responsible or knowledgeable enough to make informed decisions. A Reddit user stated, “We [Canadians] trust -- at least in theory -- that the lawmakers we elect will be responsible in allocating these funds [tax dollars], based on their knowledge of what the country needs to run smoothly.” (Proplockandruckit, 1). This indirectly implies that this person believes the citizens’ responsibility is not to dedicate funds but it is rather the informed and responsible lawmakers’ jobs. However, this does not negate the importance of citizens having a say and an opportunity to hold their constituents accountable. With respect to this statement, perhaps the matter of tax choice would be better executed if it is limited to a dedicated percentage of each individual’s taxable income. Citizens having some say over where their tax dollars are spent is a substantial reason as to why a modified version of tax choice should be implemented.
Secondly, the notion of taxation is generally perceived from a negative viewpoint. At a first glance, the public does not want to spend extra money on governmental decisions or projects, and filing taxes can be a pain. If people do not like something, chances are they will push it until completion is mandatory, as proven by a study conducted by H&R Block Inc. The study revealed that a whopping 44 percent of Canadians filed their taxes late in 2018 (H&R Block Canada Inc., 1). A modified tax choice can provide an additional incentive to fulfilling one’s personal income taxes. Citizens may find purpose in submitting their taxes given the ability to voice their opinions by controlling where a portion of their taxes are contributed. This would be another reason as to why an altered tax choice should be implemented, as it may encourage citizens to file their taxes on time.
Thirdly, this modified tax choice should be incorporated into Canadian customs as it could prove to be very beneficial in reducing violence and crime, all while having better control over politicians. At the end of the day, Canada is a democratic country, as such the people’s voice builds the foundation of the country. Even through a pandemic, protests and riots have recently given rise to more violence. Though there is no concrete evidence or examples, as such a modified concept has never been introduced, logically, giving Canadians more control over their individual wants and needs will most probably diminish the amount of present-day crime. As a bonus, citizens will also have more control over their representatives- the politicians whom they’ve elected. For example, take a politician that promises to direct funds to a service or aspect of life. Citizens can hold the politician accountable as they have the power to reinforce such a promise. In addition, if there is a valid reason as to why the politician has not followed their promise, they would in theory be more likely to reveal the truth behind why they did not fulfill their promise. So, tax choice can very easily reduce protests and riots all while having more control over politicians.
Finally, tax choice is a viable option when it comes to updating the taxation system in order to meet the needs of Canadian citizens. Simply put, the Canadian tax system is outdated, and this altered version of tax choice may be exactly the type of change that is needed. In fact, Chartered Professional Accountants Canada has called, in July of 2020, for the FIRST comprehensive tax review since 1967 (Chartered Professional Accountants Canada [CPA], 1), yet nearly every other system has had at least a review since then- a lot has changed since 1967! It is abundantly clear that our tax system has many flaws, such as its strong ability to “impede compliance” between taxpayers and governments, stated by a report from the CPA (CPA, 30). However, with all its advantages, a person may ask themselves why tax choice itself has not already been put into place. Simply put, the government wants and requires control. Take, for example, the governmental hierarchy. It would be completely ineffective if the prime minister implements change, yet the people disregard him. “Money equals power; power makes the law; and law makes government.” (Robinson 1), “Money makes the world go ‘round” (Trio Music Co., Inc. 1), both famous quotes highlighting the value of money. If the government, the most powerful organization in the world, does not have control over where tax dollars are spent, what will change? In theory, not much, Canada is then again democratic. However, people still want change from the government, so we can already conclude some things will be different. Not to mention, the government has created jobs and entire industries that control taxation. Citizens may believe that tax choice would reverse such industries and create mass job loss, however, it is important to note that the original tax choice concept may cause these problems. This alteration of tax choice does not reverse the entire taxation system, as it lets citizens control only a specific portion of their personal income taxes. As mentioned previously, this version of tax choice can only now be implemented thanks to the advancements in technology. It would involve the creation of a multitude of systems intricate in the decision-making process. For example, systems that keep citizens informed regarding their decisions, or systems that provide a default voting setting can be incorporated. If anything, tax choice creates more demand for jobs, while opening new types of jobs, such as creators who can build the technology required to successfully put such systems into place as well as maintain and administer them.
In conclusion, an altered version of tax choice would be a very useful tool that should be incorporated into the Canadian taxation system. This tool allows citizens to delegate a portion of their tax dollars to services they wish to be highlighted, all while keeping order by delegating the rest to crucial services. Citizens may reap the benefits, including but not limited to having direct control over where their money is spent, having more of an incentive to fill out one’s taxes on time, and having more control over politicians while reducing the potential for protests and riots. Our society is growing, why shouldn’t our tax system as well?
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