Thank you, Mr. Speaker, I will be here for a year. The Income Tax Act has become nothing more than a job security program for tax accountants like my hon. colleague, tax lawyers and the bureaucracy.
The Income Tax Act has lost its focus as a guideline for tax collection and governments now rely on it to dictate social policy. Recently I was at a Standing Committee on Finance meeting listening to witnesses on Bill C-17 which deals with the UIC program. The leader of the National Action Committee and the leader of the provincial Conservative Party of New Brunswick said that UIC and CAP are becoming more co-mingled and they reject the merging of UI and social assistance.
In fact, one witness described UIC as an expensive social assistance program which for many is a mainstay of their annual income. The end result is a bureaucratic nightmare that does little to solve the problems that many people face. Look at the problems that have been created in the area of child support payments. The principles of taxation that are upheld within the act are not responsive to the changes that have occurred in our society.
By continually amending the act, governments have buried its usefulness to the public in a bureaucratic quagmire. However just because the Income Tax Act has lost touch with reality does not mean that the government has to follow suit.
I would like to try once again to bring the Chevy government up to speed on the reality of our current economic situation. Government overspending is the number one problem facing the country and can no longer be put on the back burner only to be reheated at election time.
By adding $3 billion to current spending, by relying on the national infrastructure program solely as a means to kick start the economy, by gambling with low rate projections for interest rates, the government has embarked on a very dangerous, precarious and weak game plan for Canadians because all of the above adds to our problems, the deficit and the debt.
Operating on borrowed money is nothing more than deferred taxation. This Chevy government, like older model cars, has remained as a big gas guzzler continuing the trend of spending more money than it takes in.
As interest rates and payments go up, so too will the need for new sources of revenue. Instead of spending cuts and living within its means, the Liberal government is using the Income Tax Act to subtly squeeze out extra dollars from small groups in our society without alerting the majority of Canadians.
The Department of National Revenue recently used unenforced rules. They were in the rules but it had not enforced them for three to four years. The department revoked the overseas tax credit which provides incentives for Canadian industries to go after foreign contracts. Not only were they eliminated, but it made the decision retroactive to 1993, 1992 and for 1991. This is not fair to the businesses.
We believe that the Income Tax Act should be simplified and used solely as a means to collect necessary revenues to fund government programs. Government can then decide the programs that are to be legislated and do so outside the Income Tax Act. Enough with the 2,400-plus page act. Let us move toward a simplified tax system that serves a simple and single purpose, to collect revenue. A Reform income tax system, a party that has vision and some ideas for the future, would implement a uniform rate to replace current graduated rates and introduce simplicity, a one page return that is understood by all taxpayers; equality, where people feel that everyone is treated the same; visibility, no more need for tax loopholes and incentives; effectiveness, because it would draw people back from the underground economy.
The system would tax people in proportion to their income, family situation and ability to pay. There would be no longer a need for a federal consumption tax. No GST. I know some members opposite appreciate that philosophy because they have expressed it in the Standing Committee on Finance. Those are the bright Liberals.
Here is how it could work. This is a one page system. On one side we have personal income and on the other side the corporate. Both sides, personal and corporate, pay the same relative share. That has a lot of merit. Personal tax and corporate tax
would be set at a rate of 15 per cent or 20 per cent once it is determined how many dollars the federal government needs to pay for social and economic programs and the cost of maintaining this upscale size of government.
If we really need 44,000 people in the Department of National Revenue and Taxation then we have to raise the money to pay for it. The initial rate would be revenue neutral but it is expected that with more people and corporations paying taxes, revenues will be higher and we could apply this surplus directly to the deficit and debt.
I ask members of all parties to examine the idea. I know I am not the only one who believes that the income tax system can be simplified and that a uniform system of tax can work far more effectively than the current system. However, if we do not believe in the one simple philosophy that nobody likes taxes, and they always talk about a fair tax, but the only tax that is fair is if everybody pays the same. That is a little encouragement, a little inducement for the government to have the political will when it is considering the replacement for the GST. It should look at it and make sure it does not keep it complicated, confusing or convoluted. The only way it can do that is to tax everybody on everything the same and solve the problems that creates in other ways.
Rather than making the Income Tax Act thicker with Bill C-27, I urge the government to show some initiative, make the changes that Canadians have demanded, scrap the Income Tax Act altogether. Just get rid of it.