Taxation

Question 1

Why Pay for Taxes?

Answer 1

To enjoy benefits that we often take for
granted
To redistribute wealth so that more people
can get what they need
To provide social services
To offer incentives to businesses, which
boosts the economy

Question 2

What do Taxes Pay for?

Answer 2

Roads
Public Utilities
Education
Health Care
Economic Development
Cultural Activities
Defence
Law Enforcement

Question 3

Where Do Our Tax Dollars Come From?

Answer 3

Personal Income Tax: 47.8%
Corporate Income Tax: 12.6%
GST: 12%
Other Revenues: 11.9%
Employment Insurance Premiums: 7.4%
Other taxes and Duties (excl, GST): 6.1%

Question 4

Where Do Our Tax Dollars Go?

Answer 4

Operating: 26.3%
Major Transfers to Persons: 25.2%
Major Transfers to other levels of government: 19.6%
Other Transfer Payments: 13.6%
Public debt charges: 11.4%
Crown corporations: 3.9%

Question 5

Who Does What?

Answer 5

Department of Finance: Creates tax laws
Parliament: Passes Laws
Canada Revenue Agency (CRA): Carry outlaws

Question 6

What is the “Self-Assessment” Tax System?

Answer 6

We are responsible for paying our taxes according to the law.

We must list our income and deductions on our tax returns.

Question 7

What does the “Self-Assessment” Tax System depend on?

Answer 7

The CRA’s interpretation and application of the law in a uniform and impartial manner;

Our accurate self-assessment of what we earn and what we owe

Question 8

What are the Characteristics Of A Good
Tax System?

Answer 8

Fairness: Everyone should pay their fair share of taxes.

Simplicity and Compliance: People will comply with tax laws if the system is easy to understand.

Balance: Tax revenues should be given to those who need them most.

Stability: The federal government needs to manage the country’s economy dependably.

International Competitiveness: The system should help Canadian businesses compete globally.

Economic Growth: The system should encourage the growth of personal and corporate wealth.

Canadian Priorities: The system should meet needs that are a priority for most Canadians.

Transitional Implementation: If tax laws change, there should be a process for Canadians to follow so they are not in doubt.

Consultation: The government must get the input of Canadians before making major changes to the tax laws.