Flat Tax Benefits

Summary
In this edifying article, Charles Cirtwill discusses the many possible benefits of a flat 10 per cent personal income tax that could be implemented in New Brunswick. Undisputedly, the biggest benefit is the advantage the Maritime province would gain in attracting skilled workers. The executive vice-president of the Atlantic Institute of Market Studies explains how the upsides greatly outnumber the downsides. Not only would it separate New Brunswick from the rest of the country, it would also make its tax system easier to understand and deal with. Opponents of the proposed flat tax say it is not progressive enough to replace the progressive tax system that currently predominates. One of the biggest arguments constantly brought up is the $415 million a year needed to implement the personal flat tax. Despite these concerns, general reception has shown that most people are in favour of paying fewer taxes.

Government In Canada: Tax Rates
The topic of tax rates is the connection between chapter four and this article. There are three types of tax rates (progressive, regressive and flat) and Canada currently utilizes a progressive federal tax rate when dealing with individuals’ earned income. However, this article is mainly concerned with the progressive provincial income tax and what a flat tax could possibly achieve in New Brunswick. Following the progressive tax system, the amount of tax an individual pays increases as their income increases. Although more well-off members of society may not mind paying more taxes, it arises as a serious problem to the financially-unfortunate who need every cent to live. While worrying about survival necessities, the poor are unlikely to worry about how much they are being taxed in relation to the wealthy. It is understandable that the provincial government may think a progressive tax achieves vertical equity as the rich pay more taxes, but, in the grand scheme of things, all individuals would benefit and prefer to pay fewer taxes. The flat tax that Cirtwill suggests for New Brunswick would accomplish just that and would save everyone many dollars in the Maritime province. In this sense, the flat tax would be appropriate, not to achieve perfect vertical equity, but to provide all citizens with a system that everyone benefits from.

Reflection
Not only do I strongly believe New Brunswick should implement the proposed flat 10 per cent income tax, I also believe that our province of British Columbia would benefit greatly following suit. Currently, Alberta is the sole Canadian province that employs the 10 percent income tax and provinces should look at this as an opportunity to attract skilled workers. It is a given that the income tax rate will be substantially lower, but there will be more working individuals to tax (essentially providing equilibrium). The provincial government benefits greatly as they yield the same amount of tax while gaining a larger workforce. With more individuals earning incomes, more shopping for needs and wants will be done and as a result, more GST and PST revenue will be generated. These sales taxes will help both the federal government and the provincial government in the current financial downturn. Possibly the only opposing reason is the issue of inflation. As more money is present in the economy, the prices of items and good are bound to rise. Regardless, a province in which more people are working, more people are shopping and more people are living a healthier life sounds infinitely better than a stagnant society.

Link: http://timestranscript.canadaeast.com/news/article/529923