Most Canadians won't snitch on tax cheats
Carly Weeks, CanWest News ServicePublished: Monday, January 15, 2007
http://www.canada.com/topics/finance/rrsp2007/story.html?id=f7c98873-5618-4498-aa96-7d46fb5ab75c&p=1
Summary
A survey was taken place to see how many people would actually report those who are tax cheating. Many said that they will only report such incident if a large amount of money is given to them or if anonymity is guaranteed. The results of the survey indicates that majority of Canadians will not report tax cheating incidents, which means those who are avoiding to report their taxes have little to fear about. Sixty percent of those who are surveyed refused to report people who are cheating taxes even if they know for certain. Those who are willing to do it will only do it if they receive benefits. 37 % of the people surveyed said the factor affecting their decision of reporting is the amount of money involved. Another factor is the person’s relationship to the suspected cheater. One-third of the people surveyed said their family connection is a major influence on their decision to report to authorities. The biggest reason is that people believe others cheating on taxes is none of their business, so they prefer to stay out of it. Others would not report because they think it is hard to prove or they don’t know for certain. Many Canadians are hesitant to report people cheating on taxes even if they know for certain because they think they shouldn’t interfere with other’s business. The number one reason for those who are willing to report is that because it is unfair for some people to pay so much tax, whereas others are avoiding tax. Others said that they will take action in reporting because avoiding tax is against the law.
Relationship and Reflection
Avoiding taxation is against the law, yet many people are doing it. There are many examples of underground economy in Canada. For example, many people have their own property and prefer to rent a part of their property out to earn more income. However, many people avoid reporting the amount of money they receive from rent income. This is against the law. Another example is hospitality where many restaurants owners receive money in cash from their customers. They often under-report their revenues so they will not be taxed as much. Waiters and waitresses who receive tips also avoid reporting tips as a part of their income. All these are acts taken to cheat government tax. Many people are doing this because in Canada, income tax is a form of progressive tax, which means the more income you earn, the more tax you have to pay. It is believed to be best suited for extracting an equal sacrifice from each individual. For example, those who earn $10,000 will have to pay 10% of their income as income tax, whereas those who earn $15,000 will have to pay 15%. When people move into higher tax brackets, the amount of money they earn may be less than before their raise in income since thei marginal tax rate is so high.
In Canada, majority of the tax spending is on social expenditures, healthcare and education. If people are cheating taxes, they are just reducing their own quality of services because government has less money to fund these services. Also, it is citizens’ responsibility to pay taxes because they are the ones receiving the services. In Canada, most tax money is spent on healthcare and education. The healthcare system is present to benefit everyone so they will maintain healthy and work productively in the workforce. The education system helps bring upon well educated children who will be our society’s future. Avoiding taxes will seriously affect these two systems and other systems that are taking place. Also, it is very unfair for people who are paying all the taxes they are supposed to pay. The law is designed to make things equal and fair. How is it fair for people who are cheating taxes to receive equal quality of services as those who paid all their taxes? People may think that if they do not report all their income, there will be little effects. However if everyone does this, then all these little effects will add up to a lot. Government already has a lot of debts in their hands, and they are in need of money to pay these debts and provide good services to citizens. So citizens should first consider what they’ve done before criticizing the government’s services.
posted by wini_lao @ 6:08 PM
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