Apportionment required?

[Burnaby49]

Also, since there's been talk about indexing capital gains to inflation, let's do it -- BUT then treat the gains as ordinary income.

Canadian governments have talked about indexing capital gains to inflation since 1972 when capital gains first became taxable. As soon as they run the math on the cost in lost taxes they back off.

It's exactly the same with interest income. Back in the 1970's I was making 15% interest on Canada Savings Bonds but only about two percent of that was real income, the rest was just inflation. But I was taxed on the total interest.

Capital gains became taxable in Canada as a result of the Carter Commission report;

https://www.thecanadianencyclopedia.ca/ ... n-taxation

Carter also believed that capital gains should be taxed at 100% but that was a step too far for the government of the time and no subsequent government has taken the political risk of implimenting it.

Another sweet spot for the government is inflationary wage increases. My wages more than doubled in the 1970's but most of that was the result of the crazy inflation of the times. Since prices also doubled my actual real financial benefit from the increases was essentially marginal. However, thanks to the government having tax brackets with higher gradated rates based on income levels I paid significantly more than double the taxes at the end of the decade than I did at the start.

Governments love inflation (within limits) because it increases the real percentage of income collected through taxes without the government doing anything but maintaining the system.

[Colonel_Buck]

Simply tax gross income, no deductions, no exemptions, no exclusions, no tax credits. Have two brackets: 15% tax on the first 300K, 50% after that.

[Burnaby49]

Simply tax gross income, no deductions, no exemptions, no exclusions, no tax credits. Have two brackets: 15% tax on the first 300K, 50% after that.

With the 300K inflation adjusted every year.

Canada has an election coming up with all three major parties pandering to the electorate. While I'm nominally a conserative they have a habit of creating what have been called "boutique" tax credits that I hate. Little gifts to strategic voting blocks that have no relationship to any goals of taxation, fairness, income collection or otherwise. There are three in particular that were brought in by Stephen Harper, our last conservative prime minister as a result of election promises;

1 - Credits for paying for children's exercise classes, really pretty much anything kid related.
2 - The Children’s Arts and Learning Tax Credit which covers anything else.
3 - Transit credit for taking public transit to work.

These were eliminated by the Liberals under Trudeau when he got in, one of the few sensible things he's done, but the Conservatives have promised to bring them back if they win next month.

That's how taxes are in Canada, tailored in large part for political goals rather than government revenue collections. Colonel Buck's proposal eliminates that problem. Had it been brought in twenty years ago it might also have eliminated my job as an income tax auditor.