Evening star., 1941-08-06
Canadian Taxation
For War Effort Now
Half Of Every Dollar
Provinces Increase
Levies as Dominion
Speeds Up Defense
By JAMES POPE,

American Newspaper Alliance Inc.
OTTAWA, Aug. eff the Ameri-
can taxpayer wants to see himself in
glass, darkly, he has only to glance
at his buddy in Canada. And he'd
better hope the resemblance remains
murky. If it clears up, the Ameri-
can T. P. will be paying what the
Canadian T. P. is paying to lick
Adolf Hitler-which is so cents
in every dollar at the moment,
with no ceiling in sight.
AS one of the American variety
myself, I can wish that when half
our earnings go to fighting for free
dom, we can watch it go as cheer
fully as the Canadian.
They even chuckle (though little
wryly) over the classic example of
war taxation appearing in table
which was part of the Finance Min
ister'S budget speech in June, 1910.
Tax Table Exceeds Income.
This table showed what the new
Dominion taxes, income and nation
al defense, would amount to in the
various provinces when added to the
income tax payable to that province.
If you find Saskatchewan on this
table and run your finger down
until you reach the line of S500000
income, you encounter the somewhat
startling figure, $538 ,33218.
Nobody l talked to knew a resi-
dent of Saskatchewan with an in
come of $5O0,000, so there was no
evidence as to how he might have
paid his tax-possibly one govern
ment official suggested, he had to
borrow $38,33218 on the installment
plan.
Certainly Canada hasn't tried to
raise money to fight a total war
with any squeamish, misguidedly
cautious methods.
The main line of policy has been
to pay as much of the war cost as
possible out of taxation; to assess
this burden in accordance with abil-
ity to pay; to avoid infation and
to time financial action in such a
way as to encourage a rapid eXpan-
sion of production.
Real Government" of Canada.
The timing expert is Dr. W. c.
Clark, deputy minister of finance,
The minister is, James Lorimer
1lsley.
Before 7 met DR.. Clark I was told
by another minister: Don't let all
this rigamarole fool you. Parlia-
ment only does its bit. DR.. Clark
is the real government of Canada" !"
He said it good -naturedly, and
In admiration of man who appar-
emily, has not heSitated to stand be-
tween politicians and the public
purse.
For an representation of govern
ment, DR.. Clark proved a mild and
agreeable man, addicted to Gaspe
salmon. and vehement in conversa-
ton only when he tells you how his
department has to figure timing
down to the second, almost, to keep
production and taxes both at max
imum.
The idea is" says DR.. Clark,
don't be too soon and don't be
too late
Taxes are levied for three main
purposes: To raise money; to serve
as a brake on imitation Qet the ex-
ira money in the public's pocket re-
turn to the government and you
don't get buying orgy, naturally,
and to conserve Canadian dollars.
Taxes Up 76 Per Cent.
The 194l-42 budget, March 81
TO March 81, aims to raise about
rs per cent more money in taxes
than was raised last year, 1862
10000 as against $778,290,000.
The big jump is in direct taxes,
from S274,690000 to S732 900 ,00O
That's more than two and half
times as much in a single year.
The base of taxation has been i'm
menSely broadened. Besides the in
come tax, there is another tax on
income which catches the little fell
Iowa national defense tax which
is deducted from pay checks. This
tax is up $50 per cent from last
year.
On personal income, the new grad
uated rates will begin at Is per
cent on the first thousand dollars
of net taxable income, instead of
6 per cent and per cent as at
present.
The net result of all the changes
for the taxpayer in the middle in
come brackets is that he will have
to pay about twice as much income
tax in 1941 as in 1940
OF course, the provinces of Can
ada, like the States of the United
States of America, assess income
taxes, too. In order to spread the
tax load fairly in what is actually a
national effort. the Dominion gov
ernment has offered to provide the
provinces with moneys equal to the
amount of their personal and cor
poration income tax collections if
they agree to vacate these tax fields
for the duration of the war.
Liberals shake their heads at this
its another invasion of State
rights by a Federal Government.
But they know it's necessary, and
they hope things will balance up
after the war.
The minimum rate of corporation
tax has been jumped to 40 per cent
including an income tax of 18 per