This presentation looks at different areas of taxation. More work needs to be done in areas like reforming the tax act, tax treaties, shutting down tax havens, going after the underground economy, and other tax reforms

1. HOW TO REFORM
TAXATION
Paul Young CPA CGA
October 24, 2020

2. PAUL YOUNG - BIO
• CPA, CGA
• Financial Solutions
• SME – Business Process Changes
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Financial Solutions
• SME – Supply Chain Management
• Academia – Advance Accounting, Public Finance and Advanced
Management Systems
Contact information:
Paul_Young_CGA@Hotmail.com

3. AGENDA
• How is wealth created?
• Top 1% and Canada (Taxes)
• Tax Fairness / Canada
• Highest Tax / Country
• Pensions Funds and Stock Market
• Tax Competitiveness
• AOC / Wealth Tax
• California Wealth Tax
• Underground Economy / Canada
• World / Underground Economy
• Tax Havens
• What needs to happen

4. HOW IS
WEALTH
CREATED
• People invest in companies – share purchases -
https://www.bloomberg.com/news/articles/2020-06-15/asia-
stocks-to-gain-after-fed-ignites-risk-on-mood-markets-wrap
• People buy property / Rental Property -
https://www.slideshare.net/paulyoungcga/canada-housing-
market-latest-analysis-may-2020
• People start businesses -
https://www.slideshare.net/paulyoungcga/canada-whats-next-
for-small-business
• People inherit money - https://taxfoundation.org/estate-and-
inheritance-taxes-around-world/
• Win the lottery - https://www.lottoland.asia/magazine/9-
countries-where-you-do-not-need-to-pay-tax-on-lottery-
winning.html
• Innovation - https://www.slideshare.net/paulyoungcga/2019-
election-innovation-and-rd-canada-2014-to-2017
• Professional Athlete, Actors and Actresses -
https://www.statista.com/statistics/675120/average-sports-
salaries-by-league/ or https://www.cnbc.com/2020/02/07/the-
10-highest-paid-actors-and-actresses-of-2019.html
• Choose a career that has upsell opportunities in terms of salary
and benefits, i.e. engineer, lawyer, doctor -
https://www.foxbusiness.com/lifestyle/the-10-highest-paying-
jobs-in-the-world

5. TOP 1%
AND TAXES
Source -
https://www150.statcan.gc.c
a/t1/tbl1/en/tv.action?pid=1
110005501

6. TAX FAIRNESS / CANADA
Taxing high income earners has not work in the past.
There are ways to fix tax fairness by re-working the ITA, closing down tax havens, Technology tax, revisiting eCommerce taxing, etc. -
https://www.slideshare.net/paulyoungcga/2019-election-who-do-your-trust-more-when-it-comes-to-tax-fairness
If Canada also became more competitive it could also bring back FDI and be a world leader in sustainable natural resources -
https://www.slideshare.net/paulyoungcga/have-the-liberal-party-of-canada-supported-the-natural-resources-sector
https://www.slideshare.net/paulyoungcga/world-needs-to-look-at-tax-fairness (October 2019)
We do not need a wealth tax!
We do need the following
1. Refocus on supply chain
2. Transforming of Government
Source - https://www.slideshare.net/paulyoungcga/how-best-to-reshore-supply-chains
Source - https://www.slideshare.net/paulyoungcga/canada-municipal-and-local-government-whats-needs-to-be-done
Source - https://www.slideshare.net/paulyoungcga/world-needs-to-look-at-tax-fairness

7. HIGHEST TAX JURISDICTION / COUNTRY
Source - https://www.weforum.org/agenda/2019/11/income-tax-around-the-
world/
• Scandinavia has some highest cost of living in the world
- https://www.businessinsider.com/most-expensive-
countries-to-live-in-ranked#6-denmark-20
• USA wealth distribution - https://www.urban.org/policy-
centers/cross-center-initiatives/state-and-local-finance-
initiative/state-and-local-backgrounders/public-
welfare-expenditures
• Scandinavia have strong, but expensive government
models - http://statisticstimes.com/ranking/democracy-
index.php
• Consumption Taxes - https://www.retail-insight-
network.com/features/highest-sales-tax/
• Revamping Tax codes -
https://www.fool.com/retirement/2019/07/21/you-
wont-believe-how-complex-our-tax-system-is.aspx or
https://www.slideshare.net/paulyoungcga/designing-
social-programs-and-tax-fairness-policies

8. STOCK MARKET AND
PENSION FUNDS
• Role of the Stock Market – “The stock market refers to the
collection of markets and exchanges where regular
activities of buying, selling, and issuance of shares of
publicly-held companies take place. Such financial activities
are conducted through institutionalized formal exchanges
or over-the-counter (OTC) marketplaces which operate
under a defined set of regulations. There can be multiple
stock trading venues in a country or a region which allow
transactions in stocks and other forms of securities.
”https://www.investopedia.com/terms/s/stockmarket.asp
• Pension funds have issues with solvency -
https://www.slideshare.net/paulyoungcga/pension-plans-
continue-face-solvency-issues
• Pension Funds
• Real State
• Money-market
• Company ownership
• Source -
https://www.investopedia.com/articles/credit-loans-
mortgages/090116/what-do-pension-funds-typically-
invest.asp

9. STOCK MARKET

10. TAX COMPETITIVENESS
Source - https://taxfoundation.org/publications/international-tax-competitiveness-index/

11. FAILURE OF
WEALTH
TAXES
• “Normally progressives like to point to Europe for policy
success. Not this time. The experiment with the wealth tax in
Europe was a failure in many countries. France's wealth tax
contributed to the exodus of an estimated 42,000 millionaires
between 2000 and 2012, among other problems. Only last year,
French president Emmanuel Macron killed it. In 1990, twelve
countries in Europe had a wealth tax. Today, there are only
three: Norway, Spain, and Switzerland. According to reports by
the OECD and others, there were some clear themes with the
policy: it was expensive to administer, it was hard on people
with lots of assets but little cash, it distorted saving and
investment decisions, it pushed the rich and their money out of
the taxing countries—and, perhaps worst of all, it didn't raise
much revenue. ”Source -
https://www.npr.org/sections/money/2019/02/26/698057356/if
-a-wealth-tax-is-such-a-good-idea-why-did-europe-kill-theirs
• Wealth taxes have failed around the world -
https://www.wsj.com/articles/where-wealth-taxes-failed-
11572910833
• You cannot tax someone to prosperity -
https://fee.org/articles/why-a-wealth-tax-can-t-solve-our-
problems/

12. AOC AND WEALTH TAX
• USA GDP is driven by capital investment -
https://www.statista.com/statistics/247991/value-added-to-the-us-gdp-by-
industry/
• USA has one the best innovative economies in the world -
https://www.visualcapitalist.com/world-most-innovative-economies/
• New York has one the highest taxation states -
https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416/
• AOC wealth tax would lead to exodus of businesses -
https://nypost.com/2020/07/17/aocs-billionaires-tax-would-spur-wealthy-
exodus-from-ny-report/
• Qatar has one highest per capita income due to its low population and
dependency on oil and gas -
https://www.indexmundi.com/g/r.aspx?t=50&v=67
• There should be more focus on reforming the tax act including the closing
down of tax havens - https://www.ctj.org/american-corporations-tell-irs-the-
majority-of-their-offshore-profits-are-in-10-tax-havens/
• Tax Policy reforms - https://equitablegrowth.org/a-modest-tax-reform-
proposal-to-roll-back-federal-tax-policy-to-1997/ or

13. CALIFORNIA WEALTH TAX
• Fox Business Network anchor Neil Cavuto questioned California State Assemblyman Rob Bonta on "Cavuto:
Coast to Coast" Friday over his proposal to institute a 0.4% wealth tax on Golden State residents worth
more than $30 million. The Alameda Democrat told Cavuto the proposed tax "affects about 0.15% of the
California population -- not the top 10%, not the top 1%, the top .15%, about 30,000 people" and would
generate $7.5 billion in revenue for the state. - Source - https://www.foxbusiness.com/fbntv/neil-cavuto-
california-rob-bonta-wealth-tax
• California already has one highest personal income tax rates in United States including high rates for high
income earners - https://taxfoundation.org/state-individual-income-tax-rates-brackets-2019/
• California is wrestling with a large deficit - https://www.cnn.com/2020/05/14/politics/california-budget-
deficit-federal-funds/index.html
• 77% of California expenses are related to healthcare and education -
https://www.sco.ca.gov/ard_state_cafr.html
• Exodus of people - https://www.fox6now.com/news/california-exodus-more-people-moving-out-of-state-
than-in-for-1st-time-since-2010
• Businesses continue to assess their California high taxation - https://chiefexecutive.net/business-exodus-
california-troubling-sanctuary-policies/
• Rich are trickling out of California - https://www.latimes.com/business/story/2019-10-24/hiltzik-wall-
street-journal-rich-california

14. UNDERGROUND
ECONOMY /
CANADA
Source – Stats Canada

15. UNDERGROUND
ECONOMY /
CANADA
Source – Stats Canada

16. WORLD AND THE UNDERGROUND
ECONOMY
• Paying cash to contractors drives the underground economy -
https://www.investmentexecutive.com/news/research-and-markets/paying-cash-to-contractors-drives-
underground-economy/
• The underground economy can be about 15% to 20% of the total GDP.
• USA underground economy is estimated to be about $2.5 trillion -
https://www.investopedia.com/articles/markets/032916/how-big-underground-economy-america.asp
• What needs to be done
• More auditors and tools like AI - https://www.nextgov.com/ideas/2018/04/using-artificial-intelligence-reduce-tax-
fraud/147807/
• Expansion of audits in areas like hospitality, general trades and retail.
• More focus on reporting of results
• Home-owners could be required to report names of work done on their homes as part of renovations

17. TAX HAVENS
• More focus on tax treaties and working with OECD to shut down tax havens -
http://www.oecd.org/countries/caymanislands/jurisdictions-committed-to-improving-transparency-
and-establishing-effective-exchange-of-information-in-tax-matters.htm or
https://www.taxjustice.net/2020/07/22/tax-justice-networks-offshore-wealth-estimates-have-just-been-
validated-by-the-oecd/
• Tax havens cost government tax dollars -
https://www.imf.org/external/pubs/ft/fandd/2019/09/tackling-global-tax-havens-shaxon.htm

18. WHAT’S NEEDS TO
BE DONE
• Revamping the tax code including shutting down tax havens -
https://www.slideshare.net/paulyoungcga/does-taxing-the-top-1-
generate-the-tax-dollars
• Digital Tax - https://www.politico.com/news/2020/07/27/europe-
digital-tax-382309
• Reforming government as part of making government more
efficient and effective -
https://www.slideshare.net/paulyoungcga/transforming-the-public-
sector-canada
• Focusing policies that support economic growth -
https://www.slideshare.net/paulyoungcga/how-best-to-reshore-
supply-chains or https://www.slideshare.net/paulyoungcga/whats-
next-for-canada-post-covid19
• Fixing issues with protectionism including revamping the WTO -
https://www.slideshare.net/paulyoungcga/canada-merchandise-
trade-april-2020
• More emphasis on education and training -
https://www.slideshare.net/paulyoungcga/human-capital-skills-
trades-and-skills-development
• Reforming United Nations and its various agencies -
https://www.slideshare.net/paulyoungcga/reforming-both-the-
united-nations-and-who
• Focusing on improving areas like infrastructure, farming, urban
planning, water and forestry management -
https://www.slideshare.net/paulyoungcga/the-real-truth-about-
emissions-and-carbon-taxation or
https://www.slideshare.net/paulyoungcga/canada-how-are-farmers-
doing-in-financial-in-canada
• FDI - https://www.slideshare.net/paulyoungcga/what-is-next-for-
foreign-direct-investment

19. OTHER
SOURCES
• If you like to learn more
about trade and/or other
subjects as part of your
professional learning and
development then feel
free to review my material
on
https://www.udemy.com/
(search Paul Young CPA
CGA