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PAGE 18 TERRACE BAY NEWS FEBRUARY 12,1970 LETTER TO THE EDITOR The following letter was written by J.D. Neill at Public Accountant of Geraldton, Ontario to the Hon. Edgar Benson, Minister of Finance, in Ottawa. | We do not know Mr. Neill's political effiliation but can comment that we have heard some of his comments repeated by members of all parties at various time, expecially around election time. Dear Mr. Benson: I have read with interest the Government of Canada's White Paper, Proposals for tex reform, and I have 'read with equal interest the comments inserted in newspapers and netional publications thereon. The comments following, while largely those of the writer, have in part been suggested to me by my clients in my account ing practices, who have completely endorsed the content of this letter to you, for your Governments attention and con- ~ sideration. It is well known that no taxing system is perfect, nor will it be fair and equitable to all concerned, but the history of Canade has shown relatively minor defects in a taxation sys- tem and its administration tend to be accepted by the mJjor- ity of the major taxpayers if the system is performing, by and lerge, the purposes for which it was established. I believe that our taxation system should be a system of allowing all of the citizens of Canada to share in necessary administrative costs and in necessary growth and improvement advancement, and to enable Canada to become a respected World partner, not necessarily a World power. If Canada, agp a whole, is to be able to point to its accomplishments with pride, then each Canadian mst be able to point to his or her individual accomplishments with equal pride. In no other way will Canada become a respected World nation and our citizens become proud to live in Canada. _ Any attempt by any Government to reform fairly and equit- < ably our taxation system will be welcomed, but every such attempt mist clearly meet the principle query - IS IT JUST AND FAIR TO ALL CONCERNED? I believe that there has been a tendency in recent years for governments to lend an ear, very possibly an anxious ear, a little too moh to the orying of the have-nots and bending thereto, rather than attempting by just and fair legislation to assist the have-nots to assist themselves. The Federal Governments re-training program, @ cage in point. Certainly, one of the better government in- stitutions, in recent years, but unfortunately smacking too mach of government beneficence rather than legislation which assists. In this point those retrained, whether successfully or not, should at least participate in the cost, because they benefit, rather than simply receive and in most cases grumble thereafter about the inadequacy thereof. It is un- doubtedly one of the reasons why the Government feels that inereased tex revermes are necessary, a drain on the treasury, therefore a need to be replaced, therefore more taxes. My peoint-it is not JUST AND FAIR TO ALL CONCERNED. I have yet to see any person, regardless of his or her age group or status, fimenciel or otherwise, who did not appreciate that which was worked for more than that which wes "Handed Out". The Government's present proposals, it would appear, are designed to extract a little more from the "haves" to give to the "have-Nots" who will not have worked for it whereas the "haves" undoubtedly did. This is NOT FAIR AND JUST TO ALL CONCERNED. I believe in the principle of taxation of income, because it is fair and just and ceases when income ceases but the prinoipal of taxation of assets is unfair because it continue yeer after year, whether income is there or not and all too ofter leads to the loss of the assets. If one has income, then one hes extracted a value from society and, fairly, should pay for it, whereas one's assets are usually provided from tax-paid income and should remain sacred from the "tax- axe. Nowhere does this show more pleinly than in municipal real-extate taxation, where ones efforts to improve are penal- ized-forever-not just once. Income is truly only taxed once Os Reach a ih lim cit ere Diba and therefore is fair. Capital gains are income and therefore should be taxed and the fears of those who oppose a capital gains tax would be allayed if all taxation were to be set at a fair and equitable rate, rather than its present high and very pp necessary rate. , Unemployment insurance benefits are income and should therefore be taxed and the cost, in identical fashion to Canada Pension Plan contributions should be deducted from' income, and should be reported on the annual T.4 slip ina similar manner. This would serve to eliminate the tremen- dous duplication of effort imposed on employers at year end for which no payment is received and no benefits accrue. 4 It is tragic indeed that the Government has enacted legis-| lation which makes Canada Pension Plan contributions and ; Unemployment Insurance contributions to be shared by the employer end the employee. This type of legislation has en- couraged the average employee to think "the Government and ny employer owe me a living" when in fact the decision as to whether or not to have a living-is entirely up to the employe and he should be encouraged to work agressively for that and not to demand bigger and better welfare benefits. Psycholo- gists have demonstrated for years that the person who is _ handed things on-a platter becomes an inferior ocitisen. I believe that there should be one tax rate, possibly graduated, based on income declared on one return-not two- federal and provincial, set at a fair rate to cover the cost of proper government administration and improvements. Such a system is possible, practical and efficient, and when lev- ied properly would serve to encourage the individual to adhere to its rules and regulations rather to find devious ways and means of avoiding and even evading taxation. Of course, it goes without saying that the penalties for evasion under such a aystem should be instituted fairly and preperly without fear or favour. To enable such a system to operate properly requires two basic principles-elimination of unneccessary spending and declaration of all types of income. Tiwill illustrate my point with two simple examples - Elimination of unneccessary spending - delete from the welfare roles of every municipality the able-bedied man for all periods in excess er sixty days, per applicatien - the resultant dollar saving would exceed $19,000,000 per year. Declaration of all types of income-enforee additien to taxable income declared of all types of casual inoome- specifically pert time employment and income under $250.00 per year, as allowed by present T.4 reporting regulations. A person who makes $5,000 per annum performs an occasional i service for a registered employer and received $200.00. This is not required to be reported but if added to the $5,000 income could mean an additional tax of at least $30.00 per year per item. Prime examples of this type of income are part-time dance band msicians, part-time carpenters, part- time firemen, cleaning women and off-duty automobile mechanic I will not attempt to estimate the additional taxable income that decleration of these items would produce but it is obvious that the total would be staggering. To expand on my point of unnecessary spending, I should like to begin with the Government's Auditor General. He is performing a fine service but unfortunately he is obviously only a reporter, he has little or no:authority to institute reforms or exercise controls. The establishment of a somp- trollers office, while expensive, would obviously, based on Canadian Press reports, eliminate millions of dollers of tax dollar wastage. If the Government insists on controlling Canadian Televis- ion through its subsidy of the CBC then users of television sets should be charged, rather than have the entire Canadian population pay for this rather weak service through enforced taxation. A fairer system than that would be to allow pri- vate business to manage the entire system. Other countries have proven this to be quite successful. The Company of Young Canadians - CYC - should be sontrolled if not completely eliminated. I have yet to hear of one _continued page 19