COLUMN: Taxes the root of many migraines

No one has ever said, “taxes are awesome.”

Since my return to Canada, and starting my own business, my brain hurts while figuring out taxes – including a massive migraine when tax season rolls around.  

I’ve realized how convoluted our tax system really is after having to pour over hundreds of tax credits, checking to see if I’m actually eligible, estimating the compliance costs for those credits, determining what you can or cannot deduct, how much you can or cannot contribute, what amount goes where on which line, and all the other intricate details you need to sort through. After all that, you hope the CRA doesn’t put you on its naughty audit list.

I’ve had the joy of not worrying about taxes for nearly a decade. When I was under contract in the Middle East, my monthly salary was my actual salary. You see, if you were offered a job that offered you, say, $8,000 a month – you would receive $8,000 at the end of the month (salaries are paid on a monthly basis and not bi-weekly). No deductions or anything of the sort. 

How it works is that your company submits to the government that you’re employed with them, and it’s the company that pays whatever taxes directly to the government on your behalf. No filing at the end of the year. No fighting with their version of the CRA. Your money is yours.

Another thing that I now find annoying is how taxes are not included in listed prices. For instance, you only have $5 in your pocket and you want to buy two of something that cost $2.25 each – you think you have enough, but when the cashier rings them in, you’re actually short a nickel. That’s awkward. 

Taxes aren’t included in the price mainly because we don’t have a uniform sales tax rate across Canada, like many other countries around the world do. Each province has its own PST or HST to combine with the GST, so it becomes very difficult for merchants to advertise their prices across the country. People also want to see how much we’re paying in sales tax with each purchase. If it were included (like a value-added tax), you would have little idea how much you’re actually paying to the government. 

Many experts are now proposing to reform our tax system to make it more uniform. 

What do you think about giving up on income tax and taxing consumption instead? It would be a personal consumption tax in which we each subtract any savings we do from our income and pay a low, but progressively rising, rate on what we buy.

Anyway, I’m sure you would like to know that this year marked the 100th anniversary of the federal income tax as it was introduced back in July 1917, about three years into the First World War. It was supposed to be temporary but we’re still paying it, and every year we go through the same “awesome” routine.

- Originally a Squamish resident, Marcus Monopoli left for the Middle East in 2008 for radio gigs in Egypt and Oman. He moved back last summer.