This is a guest post by Dave, who is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any. Dave is from Ontario and is working towards his CGA certification.
Over the past few years, I would have to say that my fiscal and political views have definitely taken on a more libertarian flavour. I see waste and inefficiency in government that just makes me angry. We have people in office that don’t seem to understand (in my opinion) that running deficit budgets for years at a time is probably not the best way to do things, especially since they leave the repayment of the accumulated debt to the next generation or next party to get into office who starts the whole thing over again…..
But I digress (please read the disclaimer on the bottom far right sidebar, my views probably don’t reflect Tim’s at all, who owns the blog) even though I don’t agree with how most of the revenue is brought in, I will not (purposefully, I may by accident) cheat on my taxes. In the several taxation courses I have taken on-route to a CGA designation, I have realized that it really just isn’t worth it.
There are many, many ways that an individual can cheat on their taxes – they can decrease their level of income, Increase the amount of expenses claimed, a person can hold onto money that should have been remitted as sales tax, or claim credits that they shouldn’t have. An interesting site (if you’re into that kind of thing) to read about tax convictions on Canada Revenue Agency’s convictions page,which gives details of larger convictions and the reasons why they occurred.
I have come to realize that if I wish to live in this country (which I do), I need follow the tax laws as prescribed. It’s not something I enjoy doing by any means, but rather then grumble about it, or try to cheat to get around paying them, I attempt to pay what I’m supposed to and keep good enough records that if I’m questioned on anything I would be able to explain what I did. I never want to be in a situation where I have the CRA auditing me over my past 5 year’s worth of filings and knowing that I owe a substantial amount of money. From a personal finance perspective, this would probably clean out my savings and set back my plans significantly, which is far from ideal.
What I don’t think most people realize (especially those cheating on their taxes) is that they have a choice – if they don’t agree with how things are working here, they can go somewhere else with a more favourable system. Most people will not, and will continue to grumble and cheat and then wonder why they have to pay $84,547 in taxes and penalties (an example from the CRA site). I know of several people who actively sneer at the government and continuously cheat on their taxes – I just wouldn’t want to take the risk a few years down the road via a random audit. I figure if they don’t like the way things are running here, nobody is forcing these cheaters to stay in Canada.
What’s your stance on taxes? How do you try to minimize the amount paid? Would you consider moving due to your country’s taxes?