As tax season looms over all of us and we're faced with claiming back part of what was taken from us or ponying up a few more dollars to prevent being thrown in a cage, the mention of how taxes have hurt the poor the most has yet again arisen. Rightfully so. Canadians are paying nearly 50% of their income towards taxes, making it the greatest expense facing most of us. Give it a few more years of federal liberal governments mixed with provincial left-wing governments of either colour, and some provinces will soon surpass 50%. As one has less, this tax burden becomes even greater. The return on investment for tax dollars is abysmal, but I'll leave that topic for another day.
So, with the poorest among us as our main focus, what is to be done? There are some options out there, some more effective than others. One is to offer some sort of transfer from the rich to the poor in the form of welfare or tax credits. In the form of welfare, there is no pride offered, and those who are receiving it tend to become accustomed to it, neither benefiting themselves or society in the long run, and often looked down upon by others. Generally, I don't find an issue with stigma about certain things, but again, I'll leave that for another day. Just know that it plays a role here. The next option is to offer up some variety of tax credits or exemptions for low income earners. This seems like a solution, but it also fails when we actually look at lower income people filing taxes. $50 or whatever the cost to have someone at an established company file their taxes is often a lofty price, so they go through the process themselves, often missing a great many things that would be beneficial. Some get every single one of these benefits, but many don't. This generally also requires access to a computer, which isn't necessarily a given in every household, nor is access to public computers practical, especially since software installation is often required. Beyond that, it's a logistical nightmare to put in all these credits when the whole form could be simplified.
And that brings me to the point where I will present the best option, which those on the left will likely hate – increase the basic personal amount to above the poverty line. The federal basic personal amount, the amount on which no Canadian will pay any income tax, is $11,809. The poverty line for a single person is around $22,000, as per StatsCan. There are admittedly a bunch of geographic variables, but this number covers the biggest groups of people. Increasing the basic personal amount to here would ensure that everyone with a full time job at the lowest minimum wage across the country (NS at $10.85/hr) would be above the poverty line. Even without getting the provinces onboard with matching this exemption, which would be in their best interest, the benefits of leaving more money in peoples' pockets throughout the year would be worthwhile. The economy would soar, creating more and better jobs, bringing everyone's standard of living up. Wealth is not a pie game. The success of someone else does not limit your ability to succeed. The reliance on social assistance would diminish, as the pride of a job, and there is great pride in a job, complete with an endorphin release, would remove most from its grasps, as there is visible light at the end of the tunnel.
We've seen in other locations where just increasing the minimum wage puts businesses under. We've also seen where minimum wage increases cause employees to ask for less hours in order to stay below a certain threshold so they can qualify for certain social assistance programs. Bumping up the basic personal amount would certainly reduce the taxes that are collected, but the payouts would also reduce as well, maybe even eliminating some bureaucratic jobs in the process. Shrinking government and bringing people out of poverty and into prosperity – amazing how those go hand-in-hand.
