A Taxing Endeavor

"Alexander being asked why he did not gather money and lay it up in a public treasury, 'For fear.', said he, 'Lest, being keeper thereof, I should be infected and corrupted.' " (Venning)

"Taxation on the necessaries of life is a curse equal to the barrenness of the earth and the inclemency of the weather." (Adam Smith, the Father of Economics)

"In general, the art of government consists in taking as much money as possible from one class of citizens to give to the other." (Voltaire in Money)

"In Canada, the federal government was able to meet its financial responsibilities with revenue raised by indirect taxes, such as tariffs, until 1916. During the third year of World War I, to help support a war economy, the Canadian Parliament passed the Income War Tax Act as a 'temporary measure.' " (Revenue Canada Taxation Pamphlet 1975)

"The promises of yesterday are the taxes of today." (Mackenzie King, Leader of the Opposition, replying to the Conservative Budget, House of Commons, June 16, 1921)



I did this once before but I think it's time I took another crack at 'er by way of an update and because I have, since last time, learned a little bit more on the subject. The other day I was asked by a co-worker named Lance why I don't live in Canada. I told him I gave it a lot of years busting my arse to get an education, then trying to find a half decent job with that education but couldn't do it. I even went back two or three times to try again just in case my country had gotten better while I was away. But those attempts failed too. I also said, "Plus the tax rate is basically 100%." This was scoffed at. Nay, guffawed like I was saying it in jest or like I was a conspiracy theory regurgitating lunatic. Now I'm not one to believe conspiracy theory... BUUUUUUUT...…

Who am I kidding? I LOVE conspiracy theory! And I DO think a lot of it is right! And when it comes to taxes, why, when it comes to almost anything political at all, I think it's a HUGE conspiracy! Every day I look at the news, particularly the American news, I see the conspiracy getting closer and closer to a downgrade. If (dare I say WHEN?) Trump is busted for colluding with the Russians, I think the political conspiracy will be downgraded to a plausible argument. And soon, when we finally DO see his tax information, maybe fake news. Then when we find out he's been taking interns on sexcations to Thailand, it's going to be fact. I don't know what I'll do then. It'll be weird when everybody believes me and actually thinks the same stuff I do!

But one thing at a time. I know none of you believe me. "How can he be serious? There's no way for a country to survive with a 100% tax rate." Well Canadian politicians are nothing if not creative when it comes to taxes. And I choose the euphemism "creative" carefully. Who but a gifted Dickensian, Dan Brownian, Tom Robbinsian genius could compose the fifteen million page tax code we have in Canada and get people to obey it without reading it? Like all the George R.R. Martin fake fans who've never cracked a book of his and try to engage in conversation about the mule-choking books he painstakingly crafted with geeks who painstakingly read, re and re and re read them. When most people talk about taxes, I feel like somebody is trying to usurp a position in my G.R.R.M. book club. I feel like saying, "Strong Belwas needs liver and onions!" and watching them knowingly as they feign understanding. Then I feel like saying something (nonsensical) like Princess Vysinigee has flies in her eyes!" and watching them feign the same (but counterfeit) understanding. Similarly, you could quote the current Stats Canada average tax rate (if you can find such a fictional number) in a room full of Canadians and watch them swallow the absurdly low figure whole because they haven't done their reading.

Nobody, but NOOObody actually knows the taxes they pay in Canada. It's absolutely shocking how little Canadians believe they pay! We just believe what we're told so we won't throw ourselves in front of Greyhound buses (which we can't any more cuz they were taxed 100% and went out of business) or let's say an oil truck or logging truck or mining truck instead of clocking in to make someone millions more dollars today while we make essentially nothing.

All right, all right I'll give you statistics. You don't need to crunch the numbers though. Just look around and try to find a Canadian who has bought his/her house and not "bought" it. You know what I mean. We say "bought" when we mean we've enslaved ourselves to a lifetime mortgage. How many Canadians do you know who actually BOUGHT their houses? And we don't have savings any more, we have "equity." If we have to come up with an emergency 10 grand we can't do it, can we? We have that much in equity but our capital isn't really that liquid at this juncture. And generally it'll be equity in houses. Houses with bloated prices that might crumble in value when the housing bubble bursts in Canada. This is one of the fears you can't really buy insurance for. But anyway, if you need more than empty bank accounts and people living paycheck to paycheck to believe Canadians pay 100% taxes, I'll crunch the numbers for you.

Know these things: I am crunching numbers that are widely available and are therefore more likely than not false. False in favour of the corrupt, not the innocent citizen. I am averaging all of these numbers as well so it will represent a far greater than average person in Canada. Still we will come up with a total of actually more than 100% tax. I wish I could get somebody to bet me money on this, but I won't ask a Canadian cuz they're all broke. Here we go...

Canadians pay three kinds of taxes: federal, provincial and municipal. The stated tax rates in Canada NEVER include all three. Just so you know.

Let's begin with the most unjust. It's appropriate since I post this on November 11th, Remembrance Day in Canada, and this tax for our soldiers is still paid. It must make them roll in their graves at this time of the year! This is what they fought and died for? The tax that is 100 years old and we were told 100 years ago it was temporary. Not "told," PROMISED. But somebody noticed that if you just keep charging it, dumbass Canadian patriots keep on paying it. I'm not calling Canadian people dumbasses if they're patriotic. I am patriotic. That's why I'm writing this. I am tired of seeing my countrymen jacked up by greedy scumbag cosa nostra politicians at tax time! They are absolutely no different than a neckless goon telling you that you need to give him money every month to protect yourself against HIM. We need to pay money to our government to protect ourselves against our government. I ask you, what the hell kind of government is that?

Okay, let's get into the numbers. They are kept insanely complicated so I can only give you some approximations but I assure you I will approximate in favour of those who don't deserve favour. Federal income taxes: 15% is the lowest. That's paid on anything up to $46,605. I've never made even close to that, how bout you? But the average salary, (and the best figures I could get were from 2015 so I'm sure it's more now), is about $70,300 a year in Canada. Do I know any Canadians who make this much? I might know a few but not many. It's a fortune, right? So why don't I ask them to lend me some dough? Because even making THIS MUCH MONEY in Canada, taxes will eat you alive! For $70,300 the tax rate federally is 20.5%. You've already lost $14,411 bux. And fifty cents! But let's keep on crunching.

There are also provincial income taxes. There's a wide range so I have averaged things out to an 11.25% national average rate. That's another $7908.75. I'll forget about the 75 cents. $22,320. Multiply that by the population of Canada, (who aren't all paying taxes), and already you have 819 PLUS BBBBILLLLLION dollars. Of course subtract babies, old folks, people not working for some reason, people on welfare... I still think this should be more than enough to satisfy the unslakable thirst of our government representatives. But not even close.

So what we have so far is a 31.75% tax rate. A lot of countries are higher. Not so bad, right? I mean unless you live in Korea like I do where they haven't stooped to the corruption of Canada yet and I pay a reasonable tax rate that I hardly notice....

Now let's talk about the tax on almost everything you buy in Canada. You have GST, you have PST, you have HST (federal and provincial and combined taxes respectively that they HILARIOUSLY call "harmonious" sales tax and I realistically call "horseshit" sales tax) that are just added on to your every purchase. They vary from province to province but I averaged them out as best I could and came up with a total of 11.07%, which I will generously round down to 11. So that makes our tax bracket somewhere in the neighbourhood of 42.75%, am I right? Well now, Canada is a beautiful country! The people are, by my totally biased judgement, really cool! So living there is worth it. It's a shitty thing to pay almost 43% in taxes but Canada is worth it! Right? I'll just move on without asking why the hell we pay these sales taxes....

Not quite finished yet. To give you an idea, you've already paid $30,000 + from your fairy tale 70 thou. How's that sitting with you? Still feel fair? You KNOW I'm not done yet!

Now let's get into something that has the highly optimistic perception of being a refundable expense: payroll tax. This is Social Security - 12.4%, and Medicare - 2.9% that come right off your paycheck. That's 15.3% of your pay you are losing right off the top! But it will help you if you are unemployed or sick. Of course there's no way to measure how much of this the average Canadian gets back, but it's money lost for a healthy, employed citizen who dies young. And as George Carlin says, "They're comin' for this too!" Politicians in Canada, as we'll see from the Alberta Heritage Fund example I give later, have a nasty habit of dipping into funds like this. I'm surprised it hasn't disappeared entirely already!

I collect pension at the end of every one-year contract over here in Korea. I like that because by the time I'm of age to collect, it might no longer exist. So that now bumps most of us up to 57.67%. Now you've paid over $40,000 dollars to the government of your 70 grand! And you're still not finished, you poor sucker!

What if you happen to be one of the lucky ones in Canada who own or "own" a house? And if you're paid 70 grand a year, you do. Whether you're finished paying for it or not, you gotta pay property tax. That's the first of our municipal taxes. Again it varies from province to province from $2.55 to $6.62 per 1000 dollar assessed property value but I'm averaging it out. The average home in Canada is now a whopping $458,000 so the average property tax on that is $4.58 per $1000, which works out to $2,203 a year. 59.17% tax now.

Now before I get into those invisible taxes, I want you to know the corporate tax in Canada. This is the only way an average Joe Canuck can get ahead. He starts his own business. Well sure, he'll be charged a corporate tax of 15%, but if he qualifies for a small business deduction, it'll only be 10%. And once you've qualified as a business or small business there are all kinds of deductions you can claim to cut your taxes even further. Not many people would begrudge the small business owner any of these deductions even though they just put a larger tax burden onto Canadians who don't own their own businesses. They are rewards for entrepreneurial spirit. Capitalism's good side. So business owners of any kind can usually find ways to pay ZERO in taxes. Again, we don't begrudge this to the little guy but the giant corporations of Canada are NOT the little guy sweating and working long hours to make their business prosper! They're sliding by on the largest tax in Canada, which is a sort of invisible (because it is incalculable) tax that I call corporate welfare. They too are paying ZERO in taxes although every Canadian, no matter how conservative, WOULD begrudge these money grubbers the tax benefits! And a little later I'll tell you of the largest invisible tax, corporate welfare, that sucks so many Canadians from the partially gainfully employed into the realm of the zero-minus tax payer. But not yet.

In an article written in the 70's, I believe 1976, the Fraser Institute (a great source of blog fodder for me over the years) said that the average Canadian pays close to 40% of his/her taxes in the form of hidden taxes. They give the following example by way of partial explanation:  "Many of the tax dollars that we pay are imbedded in the prices of the items that we buy. For example, when someone buys a yo-yo, or suchlike indispensable item, he pays a sales tax on the purchase price (unless he happens to buy it in Alberta which has no sales tax). But included in the purchase price are sales taxes paid by the manufacturer and all the other taxes on the wood, the string and the paint. Furthermore, if the raw materials for any of these components were imported, they were probably also subject to import duties when they entered Canada. Accordingly, to the extent that the final sales price reflects the taxes paid at the various earlier stages of production, the sales tax represents a tax, on a tax, on a tax."

You can tell that it was written many years ago from the choice of a Yo-yo as the example used, and wood as the material used to make one. To give you a better idea, a Stats Canada quote for taxes they give in the article from 1974 I think, said that the average Canadian paid 14.5% in taxes on their average $14,000 dollar incomes. And just 10 years earlier, in 1966, it was suggested that Canadians only had to work Monday to fulfill their financial obligation to their country. The rest of the week was gravy. I would suggest that along with the increase of total tax the Canadian has paid since these glory days in Canada, there came an increase in the hidden taxes as well. If we add just the 40% to our already calculated 59.17%, we're practically there already! But I'm just getting warmed up.

I've already calculated GST, PST and HST, but manufacturer taxes, which are impossible to calculate (as will be most of the following examples, which is why they are termed, "hidden" taxes) and import duties are not. So those will be the first two examples of further taxation on Canadians.  

Let's talk all willy nilly about all the various other taxes, (and I'm sure I am missing a hundred), that we all pay because we have enough turkey on Thanksgiving and we have cable TV to watch the Stanley Cup Playoffs and if we're lucky a beer to drink while watching. So we're happy little taxpayers.

Most Canadians get married. It's not going to happen every year but it's a $30,717 tax when it does. And for some of us it happens more than once. Divorce is another tax I haven't calculated.

Death tax. We all die. If you buy a business or house or anything for 400,000 and it's worth 1,000,000 when you die, 600 grand of that is taxable. Death tax, which the Canadian government says they don't have, but they fucking HAVE, taxes half of any gains you made while alive at around 45%. So This will be taxed to the tune of $135,000. The one and only way to avoid this tax? Don't die!

And that's pretty much the same for any capital gains. Like if you invest in property or buy stocks or make any kind of money, half of it will be taxed. Buy something for $10,000 and its value rises to $15,000, you've made 5000 bucks so the government taxes half of that. Let's see that's $2500 taxed at 45% (about average) you lose $1125. But if you are a foreigner and you use the common tactic of dividing up an investment between several investors, Canada won't pursue this tax. It's just another way Canada favours foreigners. It's also why most real estate in big Canadian cities is foreign owned.

The excise taxes! Anything that's fun. Or fuel. We're taxed to the hilt. For any car fuel it's 10 cents a litre. For diesel it's 4 cents. If your vehicle has low fuel mileage, $1000 to $4000 buck tax per year.

Cigarettes, booze, TV cable, internet, gambling, now marijuana, anything that's fun! All you really need to know is that it is worth it for smugglers to buy Canadian cigarettes in the U.S. and smuggle them across the border. The excise tax is so brutal that Americans smoke our cigarettes and drink our booze for cheaper than we do. But it's illegal to take something that's artificially overpriced in Canada, buy it in the USA for its proper price and then bring it back to Canada where it originated.

There are all kinds of taxes that we don't even acknowledge. For instance tipping. It's basically Canadian people paying for help at restaurants and bars and other places. The owners of the bars don't want to pay wages, so the customers do. It's nothing but a call back to the days of slavery in the USA. What do we pay to help corrupt restaurant owners who choose not to pay their employees a decent wage? 15 to 20%.

Because we are getting bludgeoned by the Canadian tax man, we resort to desperate means like gambling. The Canadian lottery of all sorts is a massive money gainer for the country, which means it's a massive money sucker from its people. But we support it just in case our lucky numbers come up. I won't even get into the lucrative Canadian casinos...

In so many instances we need to pay licences or fines. Fines and licences amount to tax, don't kid yourself. They're part of the cost of doing business and are literally calculated into the budgets of a lot of businesses in Canada.

We are forced to pay certain types of insurance and the other kinds we buy voluntarily is largely just fear tax. And money is so tight, there's a lot of fear.

For convenience, let's say these amount to between 11 and 21% even though it probably IS closer to the 40% the Fraser Institute article quoted. This makes our new total somewhere between 70 and 80%. I don't want to RUSH to 100% or you might not read the rest of the post and miss the big one. But before I get into the one tax that puts us WAY over 100, let's look at a few of the ways our tax money is used and the kind of consistently corrupt people we pay it to.

There are things like this that our government does to WASTE our tax dollars to justify the collection of more. How do we attract business to Canada? Well apparently we have to bend over, spread our ass cheeks and hang a sign from our taints that says, "Welcome big business!" But wait, there's good news! After years of Canadian protest, not to mention my personal boycott of Nestle, the Canadian government has taken action! Instead of the old rate of  $3.71 per million litres, (which means when you buy a one litre bottle of water from Nestle, you're paying a million times what they paid to suck it out of Canada), the Canadian government has decided it's time to charge more. So now we charge them a whopping 5 one hundredths of a cent per litre. See if you can convince the Thomas family that THAT ain't a tax! This one thing pisses me off more than anything in Canada and is a very good example of how little of a shit our government gives about us. It's both evidence that they know there's a problem and the lengths to which they are willing to go to not solve it.

It's no different in the mining and oil businesses in Canada. Cleaning up the messes they leave is a massive tax burden most Canadians don't know about. A lot of people make their living from the mining companies in Canada. 75% of mining companies are based in Canada and, yes, this amounts to some really great jobs! About 375,000 of them. These jobs can have salaries in the range of as much as $70,000 a year....

But, as you can read in the link above, it only SEEMS like a great deal for Canada. Because Canadian laws governing mining are business-friendly, the profits that are shared by shareholders from all over the world are taken out of the country and the royalties we get are sometimes outstripped by the cost of clean-up after the mines stop yielding. And THAT expense is hung on the Canadian tax payer. Take a look at this list of the top mines in Canada. A lot of them include the word "Canada" in them and are based in Canada, but are about as Canadian as Trump's hairpiece. But if you even hint at the strategies in the article above like clean-up funds built into mining contracts from the start and contributed to during boom times, or at least putting environmental concern ahead of vultures at collection companies on the list of legal priorities, people, (you know who they are), cry socialism and warn that this will scare investors away from Canada.

It's the same in the oil racket. The comparison between Norway and Alberta has often been made to the embarrassment of Canada. 78% taxes didn't scare oil investors away from Norway. That, and prudent fund management, are why they have a fund that is large enough for every person in Norway to retire comfortably on. $235,000 US for every citizen. Imagine how much that'd be for just the retirement-aged. The business model for oil in Norway was a bold move that has paid off for them. In Alberta, where the Canadian oil sands are, in the beginning, Premier Peter Lougheed started things out boldly and contributed 30% of oil revenues to the fund. Had this only been continued to this day, Alberta would have a TON of money in its heritage fund. But the temptation was too big for politicians, (need I say without voter approval?), to raid the fund for government "programs" over the years. Here's a comparison done to a similar fund in Alaska where they contribute only 25%. The title of the article says it all. Now can you imagine the wealth and security Alberta could have today if they'd done what Norway did and contributed ONE HUNDRED PERCENT? Missed opportunity indeed!

Another bold move that Canadian business-friendly politicians have been reluctant to make is building oil refineries in Canada (or at least using the ones we have!) and selling refined oil. Refinery jobs should make up the largest number of oil jobs in Canada. But Americans, who get 99% of our oil, don't want that to happen, so it doesn't happen. Instead they've been pushing for more and more environmentally disastrous pipelines to be built across OUR beautiful country so that they can get unrefined oil from us, refine it and maybe even sell it back to us. Our business model for oil trade with the U.S. has always been ludicrous. There have been times when the oil we sell, (not to say give), to them costs 30 bucks a barrel less than the oil we inexplicably import from them. Even if we don't choose to build refineries, at least you'd think we could use our own oil. But although all voters would love that, it's not an option for Canadians to vote on. Nor was our deal the Harper government struck with China about which he said, "I know this is very, very unpopular but we're doing it anyway." Now we have the Trans Mountain Pipeline. If you click on one link only in this blogpost, click on THIS ONE! China has been put into a position to sue us if we don't hazard our gorgeous Rocky Mountains so that we can more easily ship them bitumen to be refined and used there. Bitumen is far worse than crude oil because it's impossible to clean up. And that's a job that won't be done by China or the U.S.

As with mining, the oil industry has already made a helluva mess in Canada. There's no way to get accurate reporting on exactly how big a mess, but here's an article that gives some idea. Foreign owned oil companies spilling oil all over Canada and leaving the tax payers to clean it up.

So the average income in Canada for 1974 was 14,000 bucks, eh? That's a far cry from the reported average of 70,000 we have in 2015! Why, it's exactly 5 times! How convenient that is for the purposes of this article! heh heh.

Post secondary institution rates across Canada show an average increase between 1974 and 2007 of well over 10 times and in the 11 missing years, the rates rose faster than ever. We're looking at very easily 20 times the price for going to college. Easily.

This shows a home in Calgary in 1974 compared to 2014. Well over 10X more expensive.

This is a fun look at 1974 in Mississauga, a suburb of Toronto. Gas 55 cents/litre. 114.9 cents/litre now. Not bad! Minimum wage was $2.25/hr. Now it's Minimum wage increased Jan. 1 to 14 bucks an hour in Ontario. Not bad at all. A bit less than 7X what it was in 1974. But business owners instantly complained that the jump from $11.60 was just too hard for them to finance. Average house prices in Ontario were in the $34,500 range. Now they've skyrocketed to $578,000. That's almost 17 times as expensive. In big cities like Vancouver and Toronto, it's over a million bux. The average price of a car in Canada last year was $33,464. Again about 10X the $3,750 in 1974 in Mississauga. And a gallon of milk (whatever that is) has gone from $1.39 to $8.53. That's over 6 times as expensive.

The minimum wage hikes in Canada are helping although they're being squawked about by people who like the idea of the cost of living being much higher than wages. I suppose those would be your filthy rich, who are the only group who have managed to stay ahead of the cost of living, and the really ignorant who are TOLD by the filthy rich that increasing wages are bad, and, once again, don't do the research. Like the restaurant owners who don't want to pay their workers' wages so they make customers tip, ANY business would like the price of their product to pay their overhead. But it's just not fair.

Heres a good meme that says it all:

Everything, except milk, has gone up far more than the average wages of Canadians. Behold our greatest tax, the corporate welfare tax. Any time a large company (or even a small one for that matter) faces a tax or a new expense, they pass the cost on to the customer by raising prices. We don't mind so much when the little guy does it, although I gotta be honest, some of us still mind a bit. There are a LOT of small businesses who don't need to do this as a knee-jerk reaction. They could absorb the expense and still do fine. In fact, basic Keynesian economics shows that most businesses would profit more if they stopped with this tactic. More people would have more money and they'd spend it buying products and services provided by these businesses. But it's not even given consideration by C.E.O.'s and owners who have used the highly serviceable excuse that they have a fiduciary responsibility to the shareholders.

And maybe it's the big businessy words but we all accept that excuse. We may hum and haw but we accept it as valid. This is why businesses pay no tax. And this is the largest hidden tax by far!

But it gets worse. As I blogged before, the greed doesn't allow business to stop at just passing the extra expense on to customers. They raise the price to cover expenses, and then a little more for good measure. Sometimes a LOT more. Whatever they can get away with.

And where are the institutions that are supposed to be keeping this greed in check in Canada? Does anybody know? For instance if I said, "Competition Bureau of Canada," would you have any idea what I meant? As part of an attempt to make the Canadian business environment more attractive to investors, checks and balances have been defunded and de-powered. The result has been runaway inflation for decades. It's a tax we pay for businesses in our country.

It's weird that in such an educated country, this is still relatively unknown information. I wonder what'll happen when we finally figure this out. Maybe the people would revolt. They'd cry, "No taxation without representation!" And maybe they'd stop paying taxes or something crazy like that. Canada could sure use a Soma-like substance that would calm Canadians and take their minds off of this. Couldn't it?

So for all those people who think Canada is wonderful because we have free health care and a great social net, I say, "Yeah! We need it cuz we have no money!" Okay, I admit that this might not be 100% stellar research. I admit that Canadians are allowed a little pocket money to spend and are generally happy. But next time I say something like we basically have a 100% tax rate, I'd really like it if I wasn't looked at like I was just talking out my ass. I try not to make controversial comments like that unless I've batted the ideas around the old noodle for a while. Only a few people understand me well enough to know that and you know what? They are the ones who read this blog!