Madam Speaker, last year the member for Calgary Centre rose in the House to raise the issue of the complexity of the tax system.
It is really interesting and instructive to listen to the Liberals who, in many of their speeches in the House as well as outside, tell us how everything is new and wonderful and everything is under control now that they are here. We are so pleased about that.
When I look at Bill C-70 I come to the conclusion it is everything the same as before. The old Conservative way of doing things or the old Liberal way of doing things of making the whole income tax all the less compatible with ordinary human beings gives me some sense of distress.
Last year my hon. colleague for Calgary Centre addressed the House while we were debating Bill C-27. In that speech he read the following excerpt from the Income Tax Act. I will give the House the interpretation of the Income Tax Act regarding superficial loss as presented by my colleague for Calgary Centre:
Section 54 of the act is replaced by the following: 9CO was the disposition deemed by paragraph 33.1(11)(a), subsection 45(1). Section 48 as it read in its application before 1993, section 50 or 70, subsection 104(4), section 128.1 or subsection 128(11.3), 144(4.1) or (4.2) or 149(10) to have been made-
- (1) Section 55 of the act is amended by adding the following after subsection (3):
Notwithstanding subsection (3), a dividend to which subsection (2) would but for paragraph (3)(b), otherwise apply is not excluded from the application of subsection (2) where the dividend is received as part of a series of transactions or events in which
(a) a person or partnership-
It goes on and on.
He raised the issue in the House during debate on Bill C-27 to put over the fact that we all know the Income Tax Act is such a huge volume of information that there is no conceivable way the average individual can possibly walk up to and address the bill or address the Income Tax Act. That was where my colleague from Calgary Centre stopped.
Today we debate Bill C-70. How things have changed in the last year since the Liberals have taken over. How many wonderful new ideas they have an how wonderfully they are bringing the Income Tax Act into line with ordinary Canadians. I see within the bill an amendment to the particular section I was dealing with a moment ago, superficial laws.
I am not a tax lawyer. I am not a lawyer. I am a taxpayer. I am not a chartered accountant.I am a taxpayer along with many tens of millions of other Canadians. I was rather hoping that with all of the words the Liberals continue to give to us, they might have lived up to the concept of tax reform.
I read this section to find the following. They have changed it. It now reads: "Paragraph (e) of the definition superficial loss in section 54 of the act is replaced by the following: (e) was a disposition of property by the taxpayer to which paragraph 40(2)(e.1) 25 or subsection 85(4) applies".
I thank the Liberals for making it so much clearer for me as an ordinary taxpayer to understand this section on superficial loss. Of Course I jest because the Liberals have done nothing to simplify the Income Tax Act. If anything they have added more layers, more things to be taken off as one would with an onion when taking it apart. They have added more layers to the onion of the Income Tax Act.
I find it rather interesting that one of the most creative thinkers with respect to taxation in Canada is a parliamentary secretary in the government. His ideas for the single tax, a proposal for tax reform, have never been approached, have never been touched by the government. I do not really understand why unless the Liberals have been around for far too long.
Taking a look at some of his concerns, he points out that when we have a taxation system so complex, first it leads to a situation in which ordinary citizens like me, like probably most of the people either reading Hansard or watching this on television today, are saying to themselves: ``He is right, the income tax is so complicated I go to H & R Block or an accountant; I pay $35, $50, $100 or $150 to an accountant to get the job done''.
I do not mean to do a disservice to accountants but the plain fact of the matter is that when ordinary taxpayers reach a situation in which the tax act is so complex, so convoluted, so completely overlaid as in the picture I gave of onions and onion rings with layer upon layer of problems, we end up with ordinary citizens at a severe disadvantage.
The problem is if we keep the complicated system we now have there will be continuing and ever widening abuse of the system. When there is a leak, when there is a problem within the tax system that has to be fixed, to come up with yet another band-aid that sits on top of the existing band-aids, we end up with the problem we presently have; people taking a look at loopholes upon loopholes and ways of getting around the system.
There is another problem with the tax act being as complex as it is. The government is coming to the House now with a bill to enact 1994 taxation legislation when people were filing their income tax returns about a week ago. To me this smacks of an attitude problem: "We will get around to it". These ideas are imposed on Canadians: "That is just the way it is. Oh, by the way, we will get around to using the rubber stamp of Parliament later to actually enact the legislation".
This is not acceptable. The last time I looked we lived in a democracy. This act should have come before the House for debate long before people were filing their 1994 tax returns, not afterward.
I do not really understand why this government refuses to take seriously the concept of at least looking at a flat tax or single tax system. The major advantage to a single tax system is that we could eliminate the volumes and probably millions of words and figures, paragraphs, subparagraphs and subsections. We could get it down to something an ordinary citizen could understand. We would be able to file taxes in a way that is appropriate to ourselves and not to the demand of a government which simply says: "Sorry, that is the way it is to be". It would give us some flexibility.
With a flat tax system we would be able to treat all income the same way. One of the problems when people look at a flat tax system comes when they listen to the council of concerned Canadians and other wonderful organizations like that which do knee-jerk reactions and say with a flat tax or a single tax system, only the people at the top end with the high income will be advantaged.
Then some people unfortunately in the news media take a knee-jerk, short term reaction to that. They listen to that and accept it as being a statement of fact. They then go ahead and literally throw out the baby with the bath water rather than looking first at what exemptions there would be. They would be absolutely minimal.
The income of people who are presently working within the system and taking every advantage they possibly can with all the exemptions and exceptions would be captured. That is number one.
Number two, we would end up taking the personal exemption to a significantly higher level than where it presently is. That would mean that people at the low end of the scale who are presently in the $12,000 to $14,000 income area and are paying $600 or $700 in taxes in all likelihood would be advantaged under a flat tax system.
Number three, because of all the exemptions, just increasing marginal tax rates does absolutely nothing to increase income or revenue for the government. What happens is that we end up going back to what I was speaking of just a few minutes ago which is the whole issue of the convoluted ways people can get around paying tax by exception or by exemptions.
By coming up with a single tax it would simplify things. It would allow flexibility of filing dates. It also has the very distinct possibility of ending up with people at the low end of the scale being advantaged rather than disadvantaged.
Does flat tax have a problem? Yes, there are some problems with the flat tax system. However, I challenge the Liberal government, I challenge the ministers of the government and I challenge the Prime Minister: If the flat tax or the single tax is so unpalatable and unworkable, why would the government of the largest economy in the world, the United States, be looking at a flat tax or a single tax? When we continue to throw more and more convoluted regulations and logic into our income tax system, why would we not be prepared to at least strike an independent committee, even a subcommittee of the finance committee, to look at the concept of flat tax?
We know that good, new ideas are not necessarily to come from that side of the House. They might be interested to know that the Reform Party is establishing a task force on taxation. We will involve members of Parliament. We will involve political researchers. We will involve people within our party. We will get as much input as we possibly can so that when we come out the other side we will have a package which Canadians can look at.
No changes have occurred between the time my colleague from Calgary Centre brought up these paragraphs and where we are now. I am sure that if we waited for the Liberals to come up with any new ideas on the issue of taxation, we would wait a long time. Therefore, in the spirit of reform we are establishing the task force.
In addition to the task force, we will also be bringing forward in the very near future under a private member's bill a taxpayers protection act. We have spoken about that in the House. It has been spoken about in provincial legislatures, as well as during the Manitoba election campaign. We will be bringing forward a taxpayers protection act.
If Canadians want something new, if they want something different, if they a fresh idea, the Reform Party will deliver.
