Thursday, October 13, 2011

Taxation rant - Part 2

by Stephen McPhie, CA

Partner, RSD Solutions Inc.

www.RSDsolutions.com

info@RSDsolutions.com

 

Politicians are jumping up and down about tax evasion and blurring the lines between tax evasion and tax avoidance.  Some are saying that, although legal, tax avoidance is immoral.  Presumably this is a prelude to calls to grab more tax.  I find this tendency to be objectionable at the very least.  After all, IRA and charitable deductions in the U.S. and RRSP contribution deductions in Canada can be seen as a form of tax avoidance but are considered desirable from a personal and societal perspective.

 

What is immoral about quite properly avoid paying tax that you don’t have to?  Should people and companies voluntarily pay extra tax and if so, how much?  If there are loopholes, these can be dealt with by legislation, but many so called loopholes encourage investment and wealth creation, which might go elsewhere if plugged.  Politicians often know this but carry on spouting nonsense in any event rather than try to educate people.

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