I am very happy now to speak about taxation because that is what the bill is about. The other part of my speech was very appropriate because it is Bill S-16. As I said before it cannot be ruled irrelevant. It is very relevant.
I applaud the principle of the bill to make sure that people pay taxes which they should be paying in a fair manner. It does two things. It helps to prevent people from avoiding paying the taxes they should and it prevents people from paying twice the taxes they should.
When people make money in a country sometimes the country charges them tax on it. When they bring their money home they have to pay taxes on it again. That is called double taxation. Very frankly it is not good for the economy of a country.
This is a fine bill. It is regrettable that it was not brought in, in the House of Commons. It would have had the same support from us that it has from us now in principle. Instead it was brought in from the other place.
Speaking about double taxation, it occurred to me not very long ago that we have too much double and even triple taxation. Let us talk about gasoline. I used to teach mathematics. I did a few calculations. I do not remember the exact numbers so I will have to do the calculations all over again on the run. I think I can do that.
Let us say I earn $2.77. At my marginal rate of taxation and at the rate of most middle class Canadians, I have to pay about 40% of my earnings marginally to income tax. Those are federal and provincial income taxes.
If I take 40% away from the $2.77, that leaves me with $1.66. Having earned $2.77 I have only $1.66 left. Then, if I go to the gas station to buy some gasoline with the $1.66 in my pocket, I notice that the pump says 40% of the price is taxes. I end up with another 40% taken off. Finally I buy $1 worth of gasoline. For $1 worth of gasoline $1.77 went into taxes and $1 went for the gasoline. Now $1.77 in taxes on a $1 purchase is a 177% tax. That is double taxation.
The government in taxing us for gasoline. It even taxes the taxes. Part of the price of a litre of gasoline is the federal tax which is 10 cents or 11 cents. That is added to the price. Then what happens? The GST is computed on that amount including the tax.
The government says that it has not increased taxes. I will never forget that in its first budget the government increased the tax on gasoline by 1.5 cents per litre. At least that is what it said at the time. It was inaccurate. When the GST is added to the 1.5 cents, it is 1.605 cents. In other words, the government said it was taking 1.5 cents more but what it really got was 1.6 cents because of the insidious GST which was brought in by lack of MP representation in the House and by the lack of an elected Senate in the other place. It all ties together. We have double and triple taxation in Canada, taxes being put on taxes.
Let me give another example. I will confess about all the big money I earned before coming to the House of Commons. Actually my salary is about the same or a little higher than it was when I was an instructor at the Northern Alberta Institute of Technology where I earned $4,000.
What did I do? I paid my income tax on that $4,000 of approximately 40%. What did I have left? I had $2,400 left. What did I do with that $2,400? I took out my chequebook and wrote a cheque for my municipal taxes which that year were around $2,400. I do not have it with me; I could not use it anyway, neither a flag nor a chequebook.
My $4,000 earnings were taxed and then with the money I had left I paid my taxes. When the municipality said that I had to pay $2,400 in taxes, how could I reconcile that with the fact that I had to earn $4,000 to pay my taxes? It is double taxation.
Mr. Speaker, you will notice how relevant I am. I applaud the principle of Bill S-16 which says that we should avoid double taxation. It is not good for entrepreneurs. It is not good for investors. It is only good for the governments that suck us dry.