The Uncensored Taxpayer Diary: Spring 2002

The Uncensored Taxpayer Diary:
Spring 2002

Ottawa - Friday, March 29, 2002 - by: Walter Robinson, Federal Director, Canadian Taxpayers Federation

Dear Diary, it’s been a while but given recent issues and tax questions that abound in official Ottawa, it is time to put some thoughts to paper.

The Flying Tax:

security???
On April Fool’s day (how appropriate, not), the federal Air Travellers Security Charge (ASTC), known as the flying tax, goes into effect. It will add $12 to one-way domestic flights and $24 to round-trip tickets and international flights … supposedly to pay for new aviation security measures and its consequent bureaucracy.

cost $1
charging $3
Here’s the rub, the tax won’t raise $2.2 billion over five years, it will be closer to $3 billion even though only $1 billion in equipment and service purchases have been budgeted. To add insult to air travellers, much of the security equipment is on back order worldwide, the bureaucracy won’t be in place for another six months and key officials will be Liberal patronage appointees.

tax
grab
Still, Finance Minister Paul Martin refuses to answer pointed and detailed policy questions about this blatant federal tax grab. Instead, he has sent out junior minister John McCallum and the Undertaker for Airlines, David Collenette to fight his battles for him.

misguided
On February 28, 2000, Minister Martin was hailed as a hero for finally re-indexing the tax system to inflation and ending bracket creep, on April 1st, he will be viewed as the enemy of taxpayers and the father of a very misguided public policy decision. My how times change.

Taxes and Charities:

10% to
politicing
Much has been made lately of the restrictions that are placed on Canadian charities. Presently, registered charities can only devote 10% of their resources to political advocacy work. Many charities are lobbying for Canada Customs and Revenue to change this rule to allow them more flexibility for advocacy and political efforts.

non-
receiptable
There is nothing wrong with a charity wanting to more significantly impact public policy debates and they should be free to do so. But, and it is a BIG BUT, the resources raised for these purposes should be a activity. In other words, if you give to the local AIDs hospice or Cancer foundation to help them deliver services, you get your 16% tax credit through a receipt issued by the charity.

sinful
and
tyrannical
But if these organizations want to use donations to press for more government funding or faster approval of certain drugs which is their right to do so, this activity should not be subsidized through the tax code. Thomas Jefferson put it best over 200 years ago when he stated,

“to compel a man to furnish funds for the propagation of ideas he disbelieves and abhors is sinful and tyrannical.”

For the record, the Canadian Taxpayers Federation does not issue tax receipts.

75%
And while we’re on the subject, why is that when you give $100 to the United Way or the Heart and Stroke folks you get a 16% tax credit, but if you fork over the same amount to a political party, your tax credit is 75%? This is perverse.

Tax Levels — Nine Years Later:

Income tax
7.24% of GDP
1993
Finally Dear Diary, we’re back to the old standby subject, our levels of taxation. Consider this, when the Chretien Liberals took office in 1993, federal personal income taxes (FPIT) measured as a percentage of the economy (GDP) was 7.24%.

Income tax
7.4% of GDP
2001
As of the last budget, despite all the Liberal rhetoric about substantive tax cuts (modest would be the more appropriate adjective), FPIT as a percent of GDP is 7.40% … it has gone up, not down!

$11.5
Billion
surplus
And just last week, the Department of Finance once again confirmed that we continue to be overtaxed. The federal ten month surplus from April 2001 to January 2002 now stands at $11.5 billion. Even with year-end adjustments and potential corporate tax rebates for overpayments, the federal surplus for fiscal 2001/02 should easily exceed $6 billion. It’s time for a vacation, especially before the flying tax goes into effect.

Walter Robinson
Federal Director




The Uncensored Taxpayer Diary: Spring 2002

Ottawa - Friday, March 29, 2002 - by: Walter Robinson, Federal Director, Canadian Taxpayers Federation
	Dear Diary, it’s been a while but given recent issues and tax questions that abound in official Ottawa, it is time to put some thoughts to paper.

The Flying Tax:
security???	On April Fool’s day (how appropriate, not), the federal Air Travellers Security Charge (ASTC), known as the flying tax, goes into effect. It will add $12 to one-way domestic flights and $24 to round-trip tickets and international flights … supposedly to pay for new aviation security measures and its consequent bureaucracy.

cost $1 charging $3	Here’s the rub, the tax won’t raise $2.2 billion over five years, it will be closer to $3 billion even though only $1 billion in equipment and service purchases have been budgeted. To add insult to air travellers, much of the security equipment is on back order worldwide, the bureaucracy won’t be in place for another six months and key officials will be Liberal patronage appointees.

tax grab	Still, Finance Minister Paul Martin refuses to answer pointed and detailed policy questions about this blatant federal tax grab. Instead, he has sent out junior minister John McCallum and the Undertaker for Airlines, David Collenette to fight his battles for him.

misguided	On February 28, 2000, Minister Martin was hailed as a hero for finally re-indexing the tax system to inflation and ending bracket creep, on April 1st, he will be viewed as the enemy of taxpayers and the father of a very misguided public policy decision. My how times change.

Taxes and Charities:
10% to politicing	Much has been made lately of the restrictions that are placed on Canadian charities. Presently, registered charities can only devote 10% of their resources to political advocacy work. Many charities are lobbying for Canada Customs and Revenue to change this rule to allow them more flexibility for advocacy and political efforts.

non- receiptable	There is nothing wrong with a charity wanting to more significantly impact public policy debates and they should be free to do so. But, and it is a BIG BUT, the resources raised for these purposes should be a activity. In other words, if you give to the local AIDs hospice or Cancer foundation to help them deliver services, you get your 16% tax credit through a receipt issued by the charity.

sinful and tyrannical	But if these organizations want to use donations to press for more government funding or faster approval of certain drugs which is their right to do so, this activity should not be subsidized through the tax code. Thomas Jefferson put it best over 200 years ago when he stated,
	`“to compel a man to furnish funds for the propagation of ideas he disbelieves and abhors is sinful and tyrannical.”`
	For the record, the Canadian Taxpayers Federation does not issue tax receipts.

75%	And while we’re on the subject, why is that when you give $100 to the United Way or the Heart and Stroke folks you get a 16% tax credit, but if you fork over the same amount to a political party, your tax credit is 75%? This is perverse.

Tax Levels — Nine Years Later:
Income tax 7.24% of GDP 1993	Finally Dear Diary, we’re back to the old standby subject, our levels of taxation. Consider this, when the Chretien Liberals took office in 1993, federal personal income taxes (FPIT) measured as a percentage of the economy (GDP) was 7.24%.

Income tax 7.4% of GDP 2001	As of the last budget, despite all the Liberal rhetoric about substantive tax cuts (modest would be the more appropriate adjective), FPIT as a percent of GDP is 7.40% … it has gone up, not down!

$11.5 Billion surplus	And just last week, the Department of Finance once again confirmed that we continue to be overtaxed. The federal ten month surplus from April 2001 to January 2002 now stands at $11.5 billion. Even with year-end adjustments and potential corporate tax rebates for overpayments, the federal surplus for fiscal 2001/02 should easily exceed $6 billion. It’s time for a vacation, especially before the flying tax goes into effect.

	Walter Robinson Federal Director