Yahoo Finance 9 tax-related wishes to Santa to put more money in your pocket
What does a tax practitioner ask Santa for Christmas? Well, every year, I have a private session with Santa (longevity in the profession gets you some special hearings). I make the long, but special trek to the North Pole and have some hot cocoa with the jolly fellow and talk tax wishes. In some years, I get what I ask for, but more often than not Santa says to me, “Oh, come on, Kim … keep dreaming.”
With that in mind, here’s the wish list I shared with Santa this year. We’ll see if he comes through. I’m counting on him.
* A government that understands the benefits of and the need for Canadian comprehensive tax review/reform, with a key objective being an attempt to greatly simplify our overly complex tax statute and administration. Yes, fellow tax practitioners (who often write to me or chat with me that I’m not being realistic about trying to simplify our system), it’s a long shot, but one can dare to dream.
As an aside, Rudolph overheard our conversation and reminded Santa and I about a few words in his famous song: “… won’t you guide my sleigh tonight.” He was hinting that he wanted to lead a tax review if one was ever commissioned. His logic was that if he can lead a sleigh, he can lead a tax review. I told him to dream on.
* As part of the above reform, let’s shift the basic taxing unit to the family as opposed to the individual. This would eliminate much complexity and be fair.
* A reduction in Canadian personal tax rates. They are much too high and are a drag on our country’s productivity and overall gross domestic product.
* The introduction of a tax designation to ensure that people who give tax advice in Canada are adequately trained and experienced, so as to protect the public.
* An elimination of the Underused Housing Tax, which has been an exercise in excessive reporting and data collection for no obvious benefit.
* Find a better way for Canada to develop taxation policies that benefit the country as a whole. The short-sightedness of our government in this department over the past few years has been illustrated by it developing new taxation rules that are purely political in nature, add to the complexity and are often duplicative. Recent examples include: the silly short-term rental proposals to deny expense deductions to property owners/operators who operate in a municipality that prohibits short-term rentals; the ridiculous and duplicative “flipping tax” for dispositions of residential properties held for less than a year; the awful amendments to the alternative minimum tax that will have a large negative impact on charitable donations for high-income earners; and the denial of the deduction on dividends received for financial institutions.
These and other measures all illustrate the need for better taxation policy development.
* The development of tax policy, currently under the sole purview of the Department of Finance, should be expanded to be more inclusive, transparent and open. Santa gave me a hearty “Ho, Ho, Ho” and a wink when I asked for this gift.
* A government that gets control of its spending in order to ensure the interest costs on the debt don’t equal the amount of the GST collected in Canada. That’s a ton of interest costs that could otherwise be invested in more positive initiatives for Canadians. Or reduce taxes (as stated above). It’s never a bad thing to enable Canadians to retain more of their hard-earned money.
* In order to avoid lumps of coal in my stocking, I asked Santa to eliminate the carbon tax that is adding significant costs on many Canadian heating bills — except in Atlantic Canada.
* And, last but not least, a special tax exemption for any income — such as the free cookies and milk — that Santa receives during his route. Technically, such cookies and milk might be taxable to Santa and it’s long overdue that this type of income be tax free. I asked for legislation to be introduced to make this happen.
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So, this year when Santa makes his list and checks it twice, let’s hope the “nice list” includes a good dose of positive tax changes for all. Canadians need it.
Merry Christmas, everyone. I hope all of you will have a relaxing — not taxing — holiday with loved ones.
Kim Moody, FCPA, FCA, TEP, is the founder of Moodys Tax/Moodys Private Client, a former chair of the Canadian Tax Foundation, former chair of the Society of Estate Practitioners (Canada) and has held many other leadership positions in the Canadian tax community. He can be reached at kgcm@kimgcmoody.com and his LinkedIn profile is www.linkedin.com/in/kimmoody.
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