Talking Taxes... Or Taking Taxes?

Recently, I took a two-day refresher course in Calgary on Personal Income Tax. Two full days of painful, technical details, but the lunches were good. Quoting from the teaching professional, our taxes, and especially the sequencing of tax credits, is “insanely difficult.” Did you know that from 2015 to 2016 the top marginal rate in Alberta rose from 39% to 48%? The number of tax brackets increased from five to nine. The future looks even worse. As governments continue overspending to “stimulate” the economy, they push the financial burden onto our children and grandchildren. We are to blame. Where did this love of taxation come from?

Let’s go back to the historically reliable source. In 1 Samuel chapter 16 we read the account of how the nation of Israel wanted “to be like other nations,” rather than having the LORD as their invisible leader. They wanted a continuous government to fight their battles. The prophet Samuel warned them that the king (the State) would forcibly take their private property. The word “take” peppers the chapter, just like how taxes infect us everywhere. Israel foolishly ignored Samuel’s warning. Big G government is not God’s idea for any country. Put simply: Big G government needs big T taxation. In Canada we have made the G in God too small, and the G in Government too big. It comes from our desire to have all kinds of government services—not just military defence as Israel first wanted. But we can’t have all kinds of government services without all kinds of taxation, especially when oil and gas prices are low. We must recognize that big G God is better—much better—than big G government. The human state without Jesus is ugly, and therefore the human State without Jesus is horrible. The Bible calls it the Beast, and the bigger the Beast the more teeth for invasive and voracious taxation.

What we really need is financial repentance leading to financial reformation. Until that happens here are three tips:

1. Start an RRSP with your children as soon as possible. I suggest at about age 14. This means they need to report some taxable income at age 13. If they earn $1000 in self-employment and odd jobs, then they can put $180 into an RRSP. The kids can contribute today and claim a deduction in the future when they have taxable income. RRSPs can be used for buying a first home, schooling, emergencies, and yes, retirement. There is no minimum age to start; they just have to have some RRSP contribution room. Therefore they have to file tax returns. Kids need to learn to work within the system sooner rather than later. Being tax savvy is essential to financial literacy.
2. Use your TFSA mostly for investments that have a potential for high capital gains. It is pointless to have zero taxes on interest income of about 1%. Remember that TFSAs are available only to those who are at least 18 years old.
3. Learn about taxes, but don't become like Tax-Driven Ted.

Rather than complaining we should pray for our governments—all three levels. Their jobs are VERY DIFFICULT. We have become a society of spoiled brats where everyone wants something for nothing and demands their own rights. Yet Jesus gave up His rights and took up our wrongs. Do you remember how He handled tax grabs from pagan kings? Jesus said in Mark 12:17, “Give to Caesar what is Caesar’s and to God what is God’s.”