It is no secret, all levels of government are somewhat concerned about the billions they have been dishing out to help individuals, businesses and charitable organizations. The underlying question, or the elephant in the room is, how are we going to pay it back?
There are several ways in which we can refill the coffers of the exchequer: taxes, surcharges, levis etc., but all of these will negatively affect the lives of many individuals, who are already near their financial breaking point.
One suggestion is to raise the capital gains rate back to 75 percent, affecting only the wealthier segment of society. Canada's capital gains tax was introduced in part to finance the growing costs of Canada's social security system, and to create a more equitable system of taxation. From 1972 to 1988, Canadians had to pay tax on 50 percent of their capital gains. In 1988 it was hiked to 66.66 percent, and in 1990 to 75 percent.
Let me run another idea by you. For the past four months, most of us have been using credit cards or debit cards to pay for almost everything. From on-line purchases to coffee at Tim’s or McDonald’s, we have become quite used to tapping our cards, phones or watches. I have had the same $15 in my pocket since the beginning of March, and quite like this cashless society.
I suspect, prior to this pandemic, there were many deals done with ‘cash’, thus avoiding not only HST collection, but also a great amount of income tax. Money was not reported and the government has had no idea how much potential revenue it did not collect. I have always been a believer in paying taxes to fund the fantastic social network and infrastructure we benefit from in this country. Don’t get me wrong, I am not a fan of income tax and will oppose any unfair increases, but we need to subsidize the life style we are accustomed to, or else we will lose it.
If we continue to pay for most everything by debit or credit cards, all the money we spend will be accounted for, and tax revenue will be generated. I am not sure how much this will amount to, but it will certainly go a long way in filling up the Federal piggy banks.
I am not a financial advisor, so this may not be a great idea, but if you have an opinion on this, let me know (jon@photosNtravel.com). The alternative is to simply raise taxes for those of us who pay them, and face a lengthy recession. Something I would rather do without.