From: CZ94@MUSICA.MCGILL.CA (CZ94)
Newsgroups: can.politics
Subject: Re: Quebec income tax
Date: 27 Jul 92 17:19:34 GMT
Organization: McGill University

In article <BrzEE1.G90@ireq.hydro.qc.ca> beaurega@ireq.hydro.qc.ca (Denis Beauregard) writes:
>In article <25JUL92.18414640.0071@VM1.MCGILL.CA> CZ94@MUSICA.MCGILL.CA (CZ94000) writes:
>[stuff about double tax form for Quebec, once for else, deleted]
>
>>>Before WW II, we were filling only one form, Quebec one.  Quebec was
>>>subsidizing Canada indeed.  So, Canada is the one that should not
>>>have her separate form and leave this to Quebec.  Any Ministry that
>>>should be adjusted to every province should not exist at the Federal level!
>>>
>>Federal income tax began during World War I, not World War II.  When
>>did provincial income tax begin?  And how does this relate to
>>"Quebec subsidizing Canada"?
>>
>>Now, I understand that you're an independantiste, so you want to do
>>away with the federal government entirely in Quebec, and only pay
>>Quebec income tax.  Fine.  But do I understand correctly that
>>even in a federal system, you think there should only be a provincial
>>income tax form?  How would this work?  Would there be no federal
>>income tax?  If so, how would the federal government be financed?
>>Or would the federal tax be computed as a percentage of the provincial
>>tax (just the opposite of the system now in use in all provinces
>>except Quebec)?  This would inevitably mean different rates of federal
>>tax in different provinces.  Surely this would be politically
>>unacceptable.  What do you mean by a ministry being "adjusted to
>>every province"?
>
>OK, it can be WW I instead of II.  So, _before_ this change (I continue
>to think it is WW II since Duplessis get it back according to my memory),
>provinces only had Revenu forms.  So, the provinces were subsidizing the
>Federal government, all provinces that were member of Canada.

Federal personal income tax began in 1917.  Quebec personal income
tax began in 1939.  It is simply not true that Quebec income tax
preceded the federal tax.

In fact, six other provinces had imposed provincial income taxes before
Quebec began doing so.  There was no coordination between the federal
and provincial tax schemes.  This resulted in a great deal of complexity
and confusion, so the Rowell-Sirois Royal Commission was set up in 1937
to study this problem (among others).

In 1941 all provinces agreed to stop collecting personal income tax
in exchange for annual cash payments from the federal government.
Quebec resumed collecting income tax in 1954, and the other provinces
did so in 1961.  The other provinces agreed to levy income tax as
a percentage of the federal tax, and have the federal government do
the tax collection.  Thus residents of other provinces have only
one tax return to fill out, while Quebec residents have the dubious
privilege of filling out two forms.  I have yet to hear a lucid
explanation of how we in Quebec benefit from this duplication.

I completely fail to see your point about the provinces subsidizing
the federal government.  It is individuals who pay income tax,
thereby "subsidizing" the federal and provincial governments.  There's
no payment from the provincial governments to Ottawa.

At the time of Confederation, the major source of government revenue
was not income tax, but customs and excise duties.  This was under
federal jurisdiction, so the federal government subsidized the
provincial governments.  Since then, both levels of government have
vastly expanded their fields of taxation, but transfer payments
still flow from Ottawa to the provinces, not the other way around.
>
>As for what is a ministry adapted to every province?  What is the
>use of federal, after all?  Isn't it to do in one place what is the
>same for every body?  Any regional question should be ruled regionally
>(i.e. by provincial or municipal administrations).  Each province has
>a different budget, so each have a different % of revenue that is
>taxed.  This is a regional ruling, so each province shall take care
>of it.

This is how it works now.  Each province sets its own income tax
rate.  Then they have the federal government collect it for them
(except in Quebec).

>In other words, federal shall never try to duplicate regional
>role or action.

In the case of income tax, it's the province of Quebec which is
duplicating what was previously an exclusively federal role.
>
>As for different federal rate.  Federal rate should be computed from
>the total revenue, point (dot? period?).
>
But who collects this money?  Do you want to continue having separate
federal and provincial revenue ministries?  Or do you want the
provincial ministries to collect the money on behalf of Ottawa?
Why would this be better than having Ottawa collect income tax on
behalf of the provinces?

Tom Box
CZ94@MUSICA.MCGILL.CA