KBR Poll: A Huge Opportunity for Tax Reforms

The Knowledge Bureau News Network was vibrant last month, especially in the Knowledge Bureau Report Poll. Over 98% of readers who answered overwhelmingly were in favor of tax reforms and they had some great comments as well. Take a look:

“Simplification would be one of the first orders of business. Simpler forms with fewer exceptions and carve-outs would make it easier to file taxes, which could give Canadians greater confidence in filing taxes. Simplifying things would lead to fewer mistakes and decrease the need for investigation and audit, which could help to reduce the size of CRA, reducing the need for the federal government to collect as much in tax revenue. I also strongly believe that one of the important changes to make would be to raise the basic personal exemption significantly and index it to take many more lower income folks off the tax rolls.” - Derek T

First thing needs to be done is to regulate corporate Income tax. Any corporation operating on Canadian land should be subject to taxes, no exception and oversees head offices registration where is no income tax. Next, we need to bring all CRA employees back to work, not working from home.” – Krystyna Klepinska

“Over 40 years experience, and there is not too many employees at CRA that keep up to date with all the changes, and if you have issues the majority cannot help you. I truly would love to visit the location and meet the employees that work on the taxes and the mini audits just for one day, to view exactly what goes on.” – Susan Mackie

“The lower income tax bracket of 15% needs some modifications to help those at the lower end. One example I have experienced is an individual receiving $36,000 in support is paying over $2K in taxes. Anyone making less that $50K a year is barely surviving. It would benefit low-income earners if taxes were started at $60k at 15%. The next bracket at 20.5% would start at $61k - 106K. This would leave more resources in the hands of those that need it the most. This would decrease tax debt for those that face it every year with little ability to pay. The benefit would be that this group would have more disposable income to spend in the economy.” -  Marilyn Simms

“The CPA Tax Consultation Group has submitted many requests to CRA and the Dept of Finance on this topic over the years. However, the service levels and their degree of backlog and inexperienced individuals answer the phones has to be substantially improved. I believe its close to asking for a Royal Commission to investigate CRA and how it is every year having serious challenges.” Joe Truscott CPA

“There are so many changes that would benefit different groups but as a parent myself it would be great to not only be able to write off the cost of things like day care and summer camp but also fees that are paid for Y memberships, for extra curricular activities that are currently exempt, class that aren’t offered through the school system.” - Anna Fike

“It is ridiculous that one family, where each spouse earns $50,000, and another, where one spouse earns $30,000 and the other $70,000, pay such a significant difference in income tax. Undoubtedly, fairness is not in place in these situations. While the amount varies by province, the first family takes more money home that they can put towards retirement savings, debt reduction, a child’s education or extra-curricular activities, etc. simply because they earn the $100,000 in a different ratio than the second family. For a brief time, we had a limited splitting mechanism that addressed this; however, the messaging was dominated by complaints that it benefited some “rich” people without acknowledging how it made the system more fair for many families across Canada.” - Ian Wood

“Tax calculations for combined family income is not a fair system. Very rarely do we see families looking at finances being jointly recorded. What I earn is mine and what you earn is yours. This creates hardship for most women, as they are the ones, most often earning way lower than their spouses.” - ALM

“The system is broken. There needs to be changes to make it less complicated but every year it gets more ridiculous. More and more personal information is being collected that is none of their business. The CRA also needs to be overhauled and they need to get back to the office so we can be transferred to senior officials who might know something. The average person has no clue when it comes to taxes and they do not make it easy to get help.” - Sherrie Blake

“The tax system is completely broken. It has been going that way now for several years (about nine). Every time the government says it is “fixing the system”, they make it more complicated and worse off than it was prior. The government and the CRA have become so bloated and costly, they need to add on more and more taxes just to pay for it and, at the same time, make it harder and harder for citizens to be able to file there tax returns with any confidence. Of course it needs to be fixed, but it must be fixed in the right way.” - Robert Litschel

“Employees must go back to the office to work. Eliminate work from home and add more accountability. Work is not getting done in a reasonable time or at all. These last few years has been very difficult to deal with CRA. I have been doing taxes for 32 years and it has never been as bad as it is now.” - Connie Pettigrew

“The CRA service is really bad and getting worse. They need to hire more staff, upload forms and get adjustments caught up. They need to hire people they can train to do the job properly.” - Joanne

We thank everyone for their comments. Please weigh in on this month’s poll:

Does the new government’s promise, expected soon, to cut the lowest personal income tax rate by 1% to 14%, go far enough to help Canadians impacted by high costs? What are alternatives in your view?