106: Fixing Our Tax System

Canada’s tax problem isn’t just slow phones at the CRA—it’s a century of bolt-on rules that made filing confusing, subjective, and expensive to administer. A new review found CRA contact centres gave accurate answers only 17% of the time during the 2025 tax season window, echoing long-standing issues flagged by earlier audits (including millions of dropped and blocked calls). This complicated tax system creates unnecessary bureaucracy, wasted money, unpaid taxes, and a subjective audit process that means you can pay more (or less) taxes depending on how well your auditor slept the night before.Hiring more agents won’t fix a tax law that’s impossible to interpret. Simpler rules will. In this episode, I sketch a path to simpler, fairer, faster taxes. First, a quick history lesson on why we have income taxes, and how they became a Frankenstein's monster of laws that no one can understand. This will show us that the problem is getting worse, and will keep getting worse until we have a major system overhaul. Then I'll get into solutions.I explore proven options from abroad:Pre-populated / return-free filing (pioneered by Denmark; now used in most OECD countries) to slash time, phone calls, and errors—already being piloted in Quebec for simple returns. Flatter, broader bases with minimal carve-outs (think Estonia’s ultra-simple system) and NZ’s broad-base/low-rate GST—models that raise revenue with less friction. Withholding-as-final for straightforward T4 earners, so most people don’t file at all unless their situation is complex—borrowing design cues from the Nordics. Look, nobody wants to talk about tax until they have to. But when they do - and they have to every year - they hate everything about our tax system. It creates unnecessary frustration and anger. Nobody wants to deal with the CRA, and nobody wants to work for the CRA either. Why would they?Many people who don't pay taxes do it out of frustration - they just give up. They're not evil; they're just overwhelmed. Tax filings have become a game.I’m not anti-tax; I’m anti-waste. My companies happily pay millions of dollars in corporate taxes annually. Its employees add another 1M in income taxes to our society, and you can add HST on top of all of it. What I want is less money burned collecting taxes and more money spent on services. If Canadians want better healthcare, safer streets, and a clearer deal with citizens, we should push for tax simplification, not just bigger call centres.Sources:CRA call centres: 17% accuracy (Feb–May 2025); prior audits on access/accuracy. Investment Executive+1Canada’s income tax history (1917 “temporary” tax). The Canadian EncyclopediaProvincial/territorial corporate tax—CRA administers most; exceptions Quebec & Alberta. Canada.caPre-populated returns (Denmark origin; 28 OECD countries). Tax Policy CenterQuebec simplified / pre-filled return pilot (2025 filing for 2024 year). Revenu QuébecEstonia—simple, pre-filled returns; ~15 minutes to file. Library of Congress Tile CollectionsNew Zealand—broad-base, low-rate GST model overview. Inland RevenueConnect with Chris Cooper:Website - https://businessisgood.com/