Marxism: Work Theory Of Value And Laws Of Dialectical Materialism
Fiscal policy is the guiding principle of fiscal work stipulated by the state according to political, economic and social development tasks in a certain period. It regulates aggregate economic needs through fiscal spending and tax policies. Therefore, fiscal policy adjustment means, that is, fiscal expenditures and tax policies will be adjusted at any time with the current economy. And each country has huge differences in its fiscal policies for different economic conditions. For example, the Trump administration of the United States has reduced corporate taxes sharply to restore the US real economy, and its corporate income tax has been reduced from 35% to 21%. Not only that, personal income tax deductions have also increased. The Trudeau government of neighboring Canada is implementing a deficit policy and using large amounts of capital to stimulate the market, but at the same time, Canada’s per capita debt has risen to the highest in history. The purpose of this paper is to objectively analyze the positive and negative effects of Canadian tax policy on the economy under the current world economic conditions. Therefore, this paper will first understand and analyze Canada’s tax system, government expenditures and related legislative policies. The latter will use four factors as a criterion to determine whether Canada’s economy is sufficiently free, which are Rule of law, Government size, Regulatory efficiency and Market openness.
Canadian tax system
Before analyzing any tax system, it is necessary to understand the meaning of taxes. The role and significance of taxation in any country is diverse. In the first impression of most people, tax is “government collects money”. In addition to organizing income, tax has two functions of regulating the economy and regulating the gap between the rich and the poor. Therefore, in addition to tax efficiency, taxation must also focus on tax fairness, otherwise it will have a destructive impact on the national economy and democracy.
Overall, Canada’s tax system is relatively complex, but relatively fair. For personal income tax purposes, Canada uses progressive taxation laws. This tax collection method is generally applicable in most countries. However, even though this method of taxation has become more common, some citizens are still reluctant to accept it. The progressive taxation method means that different income classes will be charged different taxes, that is, the higher the income, the higher the tax amount. Some citizens with higher wages consider this approach unfair. Because in Canadian society, even without a source of income, you can still rely on government benefits to ensure the most basic life. In this invisible part of the people gradually came up with ideas for nothing. They live on the income of others but do not want to make any effort and contribute to society. Therefore, the taxpayers have such doubts. Since they can have basic living security without working, why should they work hard to feed people who are not related to themselves. This is obviously unfair to those who work. Therefore, people with income sources, especially those with higher income sources, believe that equality of taxation should be that everyone in the society pays the same tax, and some of them think that collecting high taxes on high-income citizens is another This kind of income discrimination. Not only that, no matter the consumption tax, business tax or other taxes, the rules are particularly complicated, and even specialized tax consultants have appeared. Many families have to commission professional accountants to help them with this task. This increases the number of citizens who do not like the relevant tax system. Why not use a simpler tax system? For example, ‘one-tenth of all income is handed over to the country, and the other does not care’ or the like. There is a reason why the tax system now practiced is necessary.
Every citizen paying the same tax is precisely a serious breach of social equity. For example, the government’s 10% tax on Bill Gates will not affect any of his quality of life at all, and will affect his capital flow at the most. The 10% tax imposed on a white-collar worker with a monthly salary of 30,000 may affect a little. Of course, the quality of life will not affect his or her survival; but if the government collect 10% tax from a person with a salary of 2,000 a month, he or she is likely to be unable to afford the meat necessary to maintain nutrition after paying the rent and utilities. In more remote or poorer areas, many citizens have monthly incomes of only a few hundred, and tax collection is directly fatal.
In different cities, the cost of living is also quite different. In some backward areas, a monthly salary of 2000 can live well, but in large cities such as Ottawa and Toronto, the monthly salary of 3500 may not be able to survive at all. In different industries and companies with different benefits, the cost of living for the same income is also completely different. For example, although civil servants don’t have much income but spend a lot of money, if they are a private company employee, they may also have a monthly salary of 4500. The cost of living of private enterprise employees will be much greater than that of the general industry.
Therefore, under the pure proportional tax rate, it seems that everyone’s tax rate is equally fair, but in fact, the impact of taxation on everyone’s life is completely different. This taxation method will seriously damage the living standards of the people at the bottom.