Tuesday, October 17, 2017

A Taxing Solution

It looks like the Canada Revenue Agency’s plan to tax employee discounts is dead in the water after the federal revenue minister, Diane Lebouthillier, ordered it canceled. But that doesn’t mean that the CRA is not considering other novel ways to raise tax revenue if the following leaked memo is to be believed (which, by the way, it isn’t):
TO:          The Big Cheese
FROM:    A Smaller Cheese
     In anticipation of the success which will surely accrue to our new plan to tax employee discounts, our team has come up with even more great ideas to add to the national income:
1.  It’s time to tax those unfair senior’s discounts typically offered by drugstore chains. Why should those 65 and over get 20% off one day a week? Let’s make them claim that discount as taxable income and take our cut. Seniors will be obliged to keep track of their accumulated discounts and report them on their annual income tax return. To show we’re not unreasonable, perhaps we could let them pay using their Optimum points.
2.  Let’s consider the implementation of a spare change surtax. Not on the homeless, of course. That would be cruel and arguably contrary to the general rule that a gift is not taxable. Rather, if you find some cash lying on the street, that should be taxable income. The underlying theory is that you did some work to earn it – i.e. – you spotted the money and you actually bent down to pick it up thereby expending energy and risking yet another injury to your back.
3.  You’ve likely heard of the retail benefit called BOGO or “buy one, get one” free. It’s time to plug the hole in this giant revenue-sucking retail scam. From now on, you have to declare the value of that second hat, purse or running shoe as taxable income and pay your fair share. At least retailers will have the option of softening the tax blow by instead using the “buy one, get the second at half price” option. (Note to self: consider how to deal with the “buy three tires, get the fourth free” offer.)
4.  Fast food restaurants present another great opportunity to fill the Treasury coffers. Should free refills on soft drinks really be free? We think not. Why not a little asterisk after that menu promise indicating a 25-cent tax payable to the government for every extra glass of pop? The same goes for the so-called endless cup of coffee: 25 cents for a refill and ten cents for a top up.
5.  Speaking of restaurants, for some time now, we’ve been monitoring the marketing habits of so-called family restaurants and their all-too-common practice of offering free bread sticks. As we often say at CRA, there is no free lunch. There’s also no free dinner either and that’s why we’re proposing a one-dollar levy on any table receiving free bread sticks, rolls and/or melba toast.
6.  Gas stations are another overlooked source of potential tax revenue. Although most stations now charge a dollar or so to use their air pumps, some unscrupulous gasoline retailers are still providing free air. That’s a one-dollar benefit to the customer and should be taxed. However, given the administrative difficulties inherent in such a proposal, some in our department are looking into a standard annual per capita air tax of five to ten dollars for every breathing citizen. Those wishing to opt out can simply hold their breath or start buying canisters of oxygen.

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