Chesley William Carter
A person with dependents would have his income tax reduced considerably. The present floor of 3 per cent deductibility in respect of medical expenses follows exactly the same principle. A man who earns $3,000 can deduct everything over $90. A man who earns $4,000 can deduct everything over $120. A man who earns $8,000 can deduct that portion of his medical expenses exceeding $240.
But the principle set forth in the resolution before us today departs entirely from the principle of sharing the burden equally in proportion to means. When I saw that this resolution was on the order paper for today I took it upon myself to try to get some figures. The figures I am going to place on record were given to me over the telephone and are taken from the 1954 taxation statistics. I have not had an opportunity to check them all, but I am not quoting them for the purpose of making a statistical record. I am quoting them merely to illustrate a point.
According to the statistics for 1954, the total labour force was somewhere around 5,393,000 people. Of these, 4,803,000 submitted tax returns. Of the number who submitted tax returns, 1,393,000 were not taxable. I should like to point out that these 1,393,000 Canadians would benefit in no way whatever if the resolution were adopted. They do not pay any income tax at all; therefore they have no exemptions, and if we removed the floor on deductibility of medical expenses they would not benefit one little bit.
When the hon. member introduced his resolution he spoke of it as raising a grievance. I think these 1,393,000 Canadians would have a grievance if the government were to have legislation passed which would benefit people more fortunate than themselves and in such a way that they could derive no benefit from it whatever. The total income of the 3,410,000 people who submitted income tax returns in 1954 and were taxable amounted to $13,379 million. That works out to an average income of $3,433. That is the average income of the average Canadian taxpayer. If we take the larger figure and include those who submitted returns but were not taxable, the average income of Canadians works out to approximately $2,800.
I mentioned a moment ago that the figures I am quoting are for 1954. It is possible that some changes have taken place since then. The total labour force has probably gone up to somewhere around 5.6 million. I do not have the correct figures. It is possible that the average income has also gone up. Therefore I do not think we would be very far out if we took $3,000 as the average income of the average Canadian worker. On that average income of $3,000 he would pay a tax of $140. If he has a heavy hospital bill he he can claim exemption for everything in excess of $90. In other words if his medical expenses were big enough his income tax would be reduced from $140 to $90.
I was interested in finding out how many average Canadians there are. The arguments put forward by my friends opposite seem to be based on the assumption that the bulk of the income tax is collected from rich people. The little research I was able to do revealed to me that there are very few rich people left in Canada. As a matter of fact, in 1954 there were only 376,570 people who had incomes of over $5,000, and an income of $5,000 is not very excessive in these days. When we reached the higher bracket of $10,000 I found there were only 68,670 people who had an income in excess of that amount. Out of a working force of over 5| million that is a small number of people indeed. My point in mentioning the matter, Mr. Speaker, is to emphasize the fact that the bulk of our income tax is collected from the small taxpayer. If we do not collect it from him we do not get it.
I should very much like to be able to see income tax done away with altogether. I think everybody would like it. It would certainly be very popular, in view of the prognostications of my friends on the other side of the house. It certainly would be one way of making one sound very popular. But if we did that, where would we get the money with which to supply all the other things the taxpayer wants?
I do not think the ordinary taxpayer of Canada expects to get something for nothing. I do not think he is foolish enough even to fall for the argument that he can get something for nothing, or that the government can continue to give him more and more and still collect less money with which to pay for it. The money must come from somewhere.
I should like to make it quite clear, Mr. Speaker, that I am not opposed to reducing the burden of medical expenses on anybody. I should like to see it done. But I do not think this resolution is the right way in
Income Tax Act
which to do it. It seems to me that there are many ways in which relief can be given to people, the small man particularly, I think there are many ways which are much better than that indicated in this resolution.
One way, of course, is to create an atmosphere where full employment can be maintained, where full wages and better wages can be made possible so the individual will be in a better position to look after his own expenses instead of having the government do it for him. Another way, which I think would be much better than that indicated in this resolution, would be to increase the basic tax exemption. That action would certainly treat every taxpayer fairly, but it would not help the poor man who did not earn enough to pay taxes anyway. Another way would be to extend the scope of medical items which may be deductible. I think a good deal can be done along this line. The hon. member for Red Deer developed that argument at quite some length, but that has nothing whatever to do with this resolution. Much as I should like to extend the scope of medical deductions, passing this resolution will not do it because it has nothing whatever to do with anything except the removal of the 3 per cent floor on deductibility.
Another way-and certainly in my opinion it is the best way of all-is the national health plan, which has been talked about for some time and which seems to be drawing nearer and nearer to becoming a reality. Does my hon. friend want to do it both ways? Does he want to have a medical health plan which will take care of medical expenses and hospital expenses and then, when the income tax is paid, does he want to deduct that amount from income tax? I do not think we can have it both ways.
Subtopic: PROPOSED AMENDMENT WITH RESPECT TO MEDICAL EXPENSES