Tax reform is the process of changing the way taxes - usually those based on income - are collected or managed by the government. Currently, Canada has a progressive income tax system
?, where citizens are taxed based on their income level. Payroll tax
?, employment insurance
? and social security
? as are other types of taxes that can be reformed.
[+] Types of tax reform
- a flat tax where income taxes due are a the same percentage of everyone's income.
- ecological fiscal reform, also known as a green tax shift seeks to tax pollution and resource depletion as a means to create a sustainable economy.
- A negative income tax system has an income threshold under which one receives money from the government rather than owing taxes - a form of guaranteed annual income.
- A lifetime income tax would provide all basic personal deductions up front, on say the first $250,000 earned in one's lifetime.
- Reducing income tax? by replacing it with consumption tax (also called a sales tax? or a value-added tax?) in order to promote saving.
- Service fees?, including road tolls?, are a popular alternative to taxes as a means of paying for public services.
[+] Goals of tax reform
Administrative refinements to the tax system to make it more fair are sometimes described as measure to increase:
- horizontal tax equity? - between differing family types at the same income level
- vertical tax equity? - between similar families at different income levels.
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