Tax avoidance schemes: A simple solution
This morning I read the following CBC article: Corporate tax avoidance 'scheme' hurting Canada, expert says . As they mention: "Thirteen per cent of these corporations paid less than 5 per cent in taxes and more than half paid less than 10 per cent . Much of this tax evasion is done secretly." "...the situation has become so serious that some corporations are trying to “put the brakes on” tax cuts, as they witness the effects on critical areas of the Canadian economy, such as education, health care and infrastructure." As I alluded to in a previous posting, " Why make a profit? ", there is a really simple solution to all of these complex schemes. Instead of taxing net revenue (aka. "profit"), we should be taxing gross revenue (aka. "income"). Net revenue, or profit, is what's left over after a corporation pays all of its expenses. This makes it easy to devise complicated corporate structures that move money