A basic principle of any modern democracy is equality before the law. That principle includes tax law.
Nobody likes to pay taxes. It is often said that it is the price to pay for civilization. After all, they help pay for our schools, our roads, our health-care system and a social safety net that helps decrease income inequality. However, the pill is easier to swallow when everyone pays their fair share.
It's increasingly clear that in Canada -- and in most industrialized countries -- many are not. We have a two-tier system where the wealthy and the corporations can escape their obligations, and the rest of us can't.
As early as 1992, the auditor general of Canada pointed out the dangers of this unfair situation, when it warned that "Avoidance mechanisms also have a negative effect on the equity and integrity of the tax system and on public attitudes toward voluntary compliance. Access to such mechanisms is usually limited to those who can afford expensive advice. Those who cannot, therefore, may be denied equitable or even-handed treatment."
In a lengthy, but tone-deaf two-page answer, the finance department rejected the auditor general's recommendations and didn't even bother to address the fairness question that it raised. (more...)
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