Progressive vs. Flat

This is kind of a part one of two where I look at taxes and their different forms.  I want to consider 3 types of general taxes that government can take from the public for revenue and discuss my opinions and preferences; flat income tax, progressive income tax and a sales tax.

For many years I have had a problem with the progressive tax system we have.  I do know people that purposely made less so that their income tax level would remain lower than if they raised their income level.  I don’t know if the difference in tax level really decreases their net salary but regardless; it doesn’t sound like a good way to promote productivity in any country.

I have never understood why a person who makes more, and probably relies on government the least for services, is expected to pay a larger percent share of their income.  I always thought of this as a tactic to soak the rich.  I am not rich.  I do not live in the nicest area of the city but I am fortunate to not have to worry about shelter or food for myself and my family.

Since so many of us work, and just get by from cheque to cheque, there is and will almost always be a general grudge held by the average working class against the wealthy.  I remember in university that there was a large socialist/anti-corporate movement among students.  For some reason, as soon as someone becomes wealthy, we assume they did it through cheating, stripping the environment of resources or through government protection in the marketplace for a return of campaign money.    

We hold this attitude, and then bitch even more when working class jobs get shipped overseas.  I try to take the stance that if a person, through respectable employment, becomes wealthy we should then commend them.  Chances are, they own a business or run a business and they employ Canadians.  This is the exact benefit we want.  We want wealthy business owners to flourish and expand so that they need to hire even more skilled Canadian workers. 

So why, just because a person is wealthy does the government have the legal right to force them to do a greater part in financing the state?  It sounds respectable enough; if you have more then more is expected of you and we want to make things “fair”.  However, a forced transfer of wealth isn’t fair, no matter how much icing you coat it with.  Poor or not, nobody has the right to take money from a wealthy person just because that person makes more, end of story in my book.  I need food to eat and I have a right to eat, but I’m still required to either buy it or grow it myself.

That brings me to the flat tax which is simple enough; all Canadians pay the same percentage of their income.  The percentage should be a heck of a lot less than what it is now for any income bracket, but it should be flat nonetheless. 

This encourages Canadians to increase their salaries without worrying about increased taxation levels.  It also promotes a true, fair and balanced method where we don’t extort more money from those who have happened to earn it.  Jealousy is not a good enough reason to expect the wealthy to bail the country out of its fiscal problems. 

The lone problem is that the flat tax would not finance the government enough at its present expenditure level, so here’s an idea; quit spending so much of our hard earned money on small, selected pockets of the population.  Frankly, the progressive tax method isn’t enough either at them moment.

I think you can guess which type of tax I approve of.  In part 2, I will look at replacing income tax with a basic sales tax which means your level of tax will increase based on your consumption.