Wednesday, September 01, 2010

Things They Should Invent: indicate the percent income tax paid on the notice of assessment

The notices of assessment we get from Revenue Canada after we file our tax returns already indicate our income for the year and the amount of income tax we pay that year.

They should also show as a line item the percentage of our income we paid in tax.

There are a lot of popular misconceptions about how much tax we pay in Canada. There also seems to be a strong movement towards transparency in taxation, which is apparently why they don't include sales tax in the sticker price when you buy stuff at the store.

Simply adding this line item would make the whole process far more transparent for everyone and would make Canadians better informed of their real taxation levels. The tax preparation software I've been using these past few years (I forget which one it is - it's on my mother's computer) tells you this, and I find it very informative.

It would be practically no effort to implement. It's a simple Excel function. They could probably get it done in 15 minutes.

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