Canada's Budgetary Deficit "Manageable" Without Tax Increases if COVID-19 Response Measures Ended Soon, Says Parliamentary Budget Officer:
Canada's Parliamentary Budget Officer (PBO) Yves Giroux made comments to media this week that indicate that his office believes that Canada's currently unprecedented budgetary deficit is "manageable" so long as COVID-19 economic response programs are ended soon.
Mr. Giroux told Global News radio last weekend that "my sense is that it’s possible to deal with the deep deficit that the government will be incurring in the current fiscal year, but as long as it’s for one year." Giroux added that "it’s affordable without necessarily having to increase taxes if all the programs that have been set up and all the big exceptional expenditures are indeed temporary."
The federal government announced last month that it expects a budgetary shortfall of $343 billion this year, primarily due to the economic response measures taken during the COVID-19 pandemic. This expected deficit would be the largest on record in the post-war (1945-) era.
Read more from Global News here.
Former US Presidential Candidate Bernie Sanders Vows to Tax "Obscene" Wealth Gains Among the Ultra-Wealthy During the COVID-19 Pandemic:
US Senator and former Democratic Presidential candidate Bernie Sanders announced on Twitter Wednesday evening that he intends to introduce legislation in the US Senate which would tax the "obscene wealth gains" reportedly enjoyed by some of the world's richest people - including Amazon CEO Jeff Bezos and Tesla and SpaceX CEO Elon Musk - during the COVID-19 pandemic.
Senator Sanders - an avowed "democratic socialist" - stated that a 60% tax on the windfall gains from a list of 467 billionaires, between March 18 and Aug. 3 of this year, could raise more than $420 billion in the United States. Sanders noted that these revenues would be enough for the US government to pay out-of-pocket for all US healthcare expenses for one year.
Read more from BNN Bloomberg here.
Indonesia Extends 10% VAT to Major Social Media Giants:
The government of Indonesia has decided to extend a 10% value-added tax to social media giants such as Facebook, Tik Tok, and streaming service Disney+. This 10% value-added tax on technology companies was originally introduced only last month, and featured an initial list of targeted firms that included tech-giants Amazon, Netflix, Spotify and Google.
Under the tax, non-resident foreign firms which sell digital products and services in Indonesia worth at least 600 million rupiah ($41,040 US) a year, or which generate yearly traffic from at least 12,000 users, must pay the 10% VAT.
Read more from The Chronicle Herald here.
OPINION: It's Time to End Annual Tax Filing:
The Financial Post published an interesting opinion piece Friday morning from accountant Neal Winokur which calls for the end of annual tax filing in Canada, and a move toward a "pre-fill" system already used in nations such as Germany, Japan, the Netherlands and Belgium.
Winokur argues that "the defenders of the status quo believe targeted tax deductions and credits are beneficial because they encourage desirable behaviour or provide a fairer tax outcome for each individual. The RRSP deduction encourages people to save money, for example; the child-care deduction helps new parents return to work; and the medical expense tax credit gives families a break on required medical costs not covered by the government or insurance."
Winokur continues, stating that "as an accountant on the frontlines of this madness, I experience the unintended negative consequences our politicians seem to miss. All these deductions and credits are why Canadians need to buy tax software, blow their budgets hiring accountants, and keep boxes of receipts for six years."
Read more from the Financial Post here.
- Corey LeBlanc (JD Candidate, OHLS Class of '21)