Taxation

• Definition
  
• Excerpts from the CFP Constitution
  
• Preamble
• Balanced Budgets
• Relative Tax Burdens
• Resources Revenue Sharing
• Ten Proposed Consumer Tax Ammendments
• Ten Proposed Industrial Policies
• Tax Fraud
  

Taxation management's purpose is to secure funding for government activities, programmes and investments by collecting money from financial activities within the economy of Canada. (The CFP believes that personal "Income Taxation" acts as a disincentive to economic risk taking and economic expansion. A more constructive personal tax mechanism is the taxation of purchases.)

Definition

Canada's "Financial Resources" include such things as: Cash Deposits, Gold, Securities, Mortgages, Bonds, Retained Earnings, Equity, etc. These resources form the capital available to invest in the country by individuals, businesses and government.

Equity in one's property is a Financial Resource of the property owner. Canada has enormous potential equity in natural resources, (Physical Resources), that may be sold and thus converted into Financial Resources.

Businesses and organizations deploy their Financial Resources into the other four resources through functional business systems and processes in a manner that is intended to increase the acquisition of Financial Resources.

When directing or managing any organization, from a household to a nation, it is helpful to understand that your five fundamental resources can be deployed to increase your overall mix of resources.

Excerpts from the CFP Constitution

3.1.3 Pro-Canadian party dedicated to the principle that Canada can best serve its citizens and the world by re-claiming and maintaining its political and economic sovereignty as an independent country. It is opposed to the ascendancy of "corporate rule" and those aspects of unrestricted global investment that promote colonization of the world’s smaller powers.

3.1.8 Our commitment to equality of opportunity.

3.1.13 Canada's identity and vision for the future should be rooted in and inspired by a fresh appreciation of “our land” and the supreme importance to our well-being of exploring, developing, renewing, and conserving our natural resources and physical environment.

5.1.9 We believe that governments should regard public money as “funds held in trust,” and that governments should practice fiscal responsibility — in particular, the responsibility to balance expenditures and revenues.

5.1.22 We believe that a healthy economy is important, but increasing the size of the gross national product is not in itself a sufficient goal for a civilized nation. We are concerned about the effects of economic growth – what this does to our environment, what kind of living conditions it creates, what is its effects on the countryside, what is its effects on our cities; whether a greater feeling of justice and fairness and self – fulfillment result from this growth, thereby strengthening the social order and improving the quality of national life.

5.1.25 We believe in the abolition of poverty, and the achievement of greater equality in the distribution of income, wealth and opportunity.

Preamble

The CFP recognizes that Canadians feel that it is important to share our individul and corporate wealth in order to build and maintain our society's values, integrity and infrastructure through our political and government institutions and agencies.

Governments collect their share of our wealth through many methods, including: personal income tax, business income taxation, property taxation, sales taxation, excise taxes, duties, tarrifs, licenses, penalties, fines, etc.

The CFP also recognizes that excess taxation can lead to a decay in values and practices in the private and public sectors. These may include: 1. A dis-incentive to maximize growth, productivity or earnings. 2. Increase in the cash-based economy. 3. Falsification or misrepresentation in tax returns. 4. Increases in bankruptcies. 5. Reduced competition in free markets. 4. Financial advantages for foreign or foreign owned companies. 5. Loss of jobs. 6. Lack of new investments. 7. Decreased access to foreign investments or foreign investors. 8. Reduced family capital formation. 9. Increased dependancy on social benefits. 10. Lack of self-sufficiency by seniors. 11. Excess growth in bureaucracies. 12. Slowdown in growth of GNP. 13. Reduced size of middle classes. 14. Increased size of lowest income sector. 15. Increasing unemployment. 16. Increased prices/ inflation. 17. Reduction in overall government revenues. 18. Increased consumer debt. 19. Increased government debt. 20. Reduced value of Canadian currency. etc., etc.

Following two generations, or over 50 years of relatively positive Canadian economic growth, it is apparent to the CFP that the distribution of wealth in Canada has been unfairly and inequitably distributed.

The government sector has acquired substantially greater proportionate growth in share of the economy vs. the private citizens or their families. Growth in the size of government funded services, share of the workforce, and deficit spending, has led to a massive increase in taxation of Canadains. It has also led to public sector wages, benefits and pensions surpassing comparable function compensation in the private sector. (This is even more aggravated in the small and medium sized domestic businesses that provide most of Canada's potential employment growth rates.)

Key evidence of this poor economic management is the fact that 86% of Canadian senior citizens will be almost completely dependant upon government benefits within 5 years of retirement. A vast majority of Canadians over 70 will become impoverished.

Another key factor is the failure of our taxation and banking sectors to build the wealth of individuals and families. Over 12 million personal bankruptcies were recorded during the last 50 years out of a population that grew from 18 to 32 million citizens. Similarly, over 400,000 business bankruptcies occured, not to mention hundreds of thousands of other failures in businesses started by Canadians that were either liquidated or dissolved.

The CFP is committed to increasing the size and share of wealth of the middle classes in Canada through GNP growth from business creation and stimulation policies, taxation reforms and more effective development of Canada's human, physical, informational, technological and financial resources.

Taxation

a) Balanced Budgets

Of course, it is important that government revenues and expenditures are realistically balanced through economic cycles. The key is to sustain core services and then implement expansionist or contractionist policies in order to adapt to the domestic and foreign economic market conditions.

To acquire this flexibility, the CFP believes that the private sector is better equipped to adopt new practices in the near term whilst government institutions and agencies should adopt new practices over the medium and longer terms. If the government sector represents too large a portion of our GNP, then growth will be quite slow. (According to the Conference Board of Canada, the private sector contributes at least 20% more to GNP for each dollar spent.)

b) Relative Tax Burdens

The question of who should bear Canada's tax burdens has apparently not been fairly addressed since the second world war. However, it appears that the bulk of the power and influence to determine taxation has evolved towards the hands of Canada's civil services, who have been strongly influenced by their unions and federations of workers.

The CFP recognizes and fully supports the historical need of these labour organizations to negotiate a fairer deal for their people. With extraordinarily few exceptions, these Canadian unions and federations have acted in a fair, responsible and reasonable manner. They represent a truly important fabric of our economic well being.

Unfortunately, many workers in the private sector have not been able to attain a parity or equitable compensation or secure job status with those on government payrolls. These wage earners comprise a disproportionate share of the lower income and lower middle class sectors in Canadian society.

The middle and upper middle classes in Canada have also not faired as well. Especially during the last quarter of the last century. They have not been able to sustain their businesses as major international corporations have oligopolized one industry after another in the developed countries. These corporations have subsequently moved many of the less skilled jobs to under-developed countries and thus effectively blocked a great deal of middle class upward mobility.

Canada's upper classes have benefitted from the numerous mergers and acquisitions and a few have even created their own multi-national conglomerates. These people have likley adopted a broader global investment opportunity perpective; however, they will enthusiastically support good opportunities at home. There may be a concern that their investments may not be taxed as much as they should be in Canada, but by and large the more they prosper outside Canada, the more Canada will benefit.

The CFP believes that most of Canada's growth should result from an increase in size and wealth of the private middle classes. A strong middle class will ensure a more balanced economic growth and resilience to international economic trends.

Transfers of wealth from the middle classes to government is inevitable; nevertheless, the transfers should be more related to consumption than to incomes. This strategy will create more small capital pools to finance new enterprises and innovations. Similarly, small businesses need to retain a larger portion of their income to finance expansion.

Once businesses achieve economies of scale and higher productivity levels, they are able to generate significantly more income than small businesses per captal invested. Then they become much better positioned to help finance their share of the social infrastructure.

c) Resources Revenue Sharing

With the patriation of our Constitution from the British Crown most Canadians believed that we all now owned all of our natural resources and territory. However, the CFP observes that the government, and not the people, has directly profited from this transfer of wealth. The government has collected all sorts of diverse revenues from the extraction and exploitation of our natural resources, but nothing has been directly paid to individual Canadians. Members of government institutions and agencies have been the sole beneficiaries of this wealth.

Of course, they would argue that we all benefit from the lower taxes that need to be collected. But this is a completely specious argument as there is no relationship whatsover between our tax rates and revenues from natural resource exploitation.

The CFP believes that Canadians should equally receive income from these sources on a per capita basis. Some criteria might be allocated to ensure an equitable allocation for those not born in Canada and the CFP welcomes debate on this matter.

d) Ten Proposed Consumer Tax Ammendments

1. Income Averaging - By adopting five year's income average taxation rates, consumers will not be severely penalized for having high incomes in a particular year.

2. Family Income Averaging - By combining spousal incomes, the tax rates will have a more equitable impact on the family.

3. Thirty Percent cut in Tax Rates - During recession/ depression economic times a major tax relief will enable greate debt paydown and create greater spending stimulii in the economy.

4. 15% HST - by cutting income taxes and raising sales taxes government revenues are sustained and families acquire more control over finances. (Tax consumtion, not income)

5. Limit Interest Rate to Prime + 10% - This will provide reasonable returns to lenders and enable consumers to pay off debts.

6. Income Tax Deductability for Mortgages - by speeding up and increasing home ownership, family wealth will accelerate and capital pools will be created to stimulate new enterprises.

7. Home Essentials Price Controls - Most essential items such as foodstuffs, energy and insurance are provided in relatively closed markets where price fixing is common. Consumers need to be protected from price gouging by international and foreign conglomerates, cartels and Sovereign Wealth Funds.

8. Debt Reduction Tax Credits - Using tax free RRSP redemptions and other credits, consumer debts could be drawn down during weak economic periods.

9. Market Value Assessment Tax Credits - protect family net worth during deflationary periods.

10. Senior Citizens Resource Fund(s) - taxes on non-renewable and renewable resources would be accumulated and awarded to seniors.

e) Ten Proposed Industrial Policies

1. Small Enterprise Capital Savings Plan - similar to RRSP's, this fund will enable people to accumulate capital to start or purchase a new business.

2. Small Business Income Averaging - five year income averaging will provide a more equitable tax burden.

3. Simplified Business Reporting and Tax filing - only annual reporting or filing for businesses with sales under $3 million.

4. Minimus/ Maximus Filing and Record keeping - reduced accounting requirements, such as flat rate mileage tax allowances and credit card statements valid as receipts for expenses under $1000.

5. Day Care & Parental Care Allowances - Full tax deductions for day care and proportional allowances for home care of dependants.

6. Accelerated Equity Accumulation deduction - owners of new enterprises will receive profit sharing tax credits to allow them to acquire control of their business.

7. Micro-Business Funding & Mentoring - retired business people on government retainers could provide consulting services and government loans up to $25,000 to start new enterprises.

8. Small Business Administrative Support Services Depots - government subsidized accounting, financial services and consulting services for small businesses.

9. Intern Employment Recovery Programme - workers on EI hired by a firm would receive a 30% tax credit on the amount of EI not paid to the formerly unemployed worker.

10. Fair Competition Principles, Policies & Practices - Achieve balanced competitive markets through restrictions on non-competitive restrictions against former employees or owners or asset usage or re-start-up. Industries with 75% of market control by fewer than 7 independant and unaffiliated companies would be subject to government price controls. Price cutting to thwart competition by up to 6 firms comprising 70% or more market share would be prohibited.

f) Tax Fraud

The CFP respects the principle of Canada's voluntary tax system that allows Canadians to prepare and submit their own tax returns. The funding of government is highly dependant upon the honesty and truthfulnes of Canadians.

Nevertheless, it is only prudent, and a responsibility of government, to exercise vigilence in the lawful payment of all taxes by all citizens. Those who willfully take advantage of their ethical obligation to pay certain taxes by dishonest practices, (as typified by recent growth in tax avoidance cash transactions), are not fulfilling their financial duty and responsibility to the country and their fellow Canadians. Such practices should be considered unethical and un-Canadian.

In instances of significant or major tax fraud, persons demonstrating such behaviour will be criminally prosecuted and should have some of their priviledges as Canadians suspended, or even denied.

In instances of corporate tax fraud, those domestic and foreign individuals responsible, should be prosecuted and the corporations penalized.

Also, if tax fraud significantly increases in Canada, the CFP would take steps to advise citizens of all ages of their duties and responsibilities to their country and their neighbours.

The party would also review all taxes on a regular basis to ensure a fair and equitable balance of tax rates, regulations and policies.