Canada's Modern Taxation System

Taxes of one sort or another have been with us for a very long time. Years ago, when leaders needed money, they either went out and stole it or forced their own people to pay them. Nowadays, before new taxes are introduced or old ones are changed, Parliament has to agree. The Finance Minister is responsible for the budget. The budget lays out what the government wants to spend money on. Sometimes tax cuts are announced. This makes the voters happy. Sometimes tax increases are announced. If the government wants to spend more money, it has to get more or go further into debt.

The Finance Minister presents the budget to the House of Commons. In theory, the MPs could vote it down. In fact, however, there are more government MPs in the House than there are opposition ones, so the budget will normally be passed. Then any new taxes will become law.

In Canada, we have a progressive taxation system. This means that the more money you make, the more taxes you should pay. It isn't a perfect system. Lower income people don't pay as many dollars in tax, but it isn't always easy to manage on what is left. Even if rich people pay a bigger percent of their income, it is easier for them to manage on what is left. It also sometimes seems that governments give big business even bigger tax breaks. These tax breaks are meant to encourage them to do more business. This should then lead to more jobs for more Canadians