1 How and why does tax legislation exist?
Sam Newton
Income tax was introduced in Canada in 1917 as a temporary measure to fund the 1st World War. This temporary measure has proven to be remarkably resilient and has stuck around for more than a century. During this time tax rules have grown from 11 pages in 1917 to thousands of pages today.
In the 2016-2017 fiscal year, the Canadian government raised $293 billion dollars in revenue. Of this amount approximately 50% came from individual income tax, 15% from corporate taxation, 12% from GST/HST and 7% from the employment insurance premiums. Personal and corporate taxation play a huge role in funding schools, the Canadian military our national healthcare systems etc.
It is important to understand that there is nothing immutable about taxation and that it is often driven by the political will of the day. For example, left-leaning governments may implement wealth taxes on high net worth individuals or increase taxes paid by higher income earners arguing that this is a way to address wealth imbalance and create a more egalitarian and fairer society. Right-leaning governments, on the other hand, tend to reduce taxes for high income earners and corporations believing that this will increase job creation and help the overall economy.
Again, there is nothing set in stone for taxation. You should consider taxation policies of the various parties whenever you vote. You can make a difference.
