The issue of how children should be treated in the tax system.and more Assignment

The issue of how tiddlerren should be treated in the tax system.and more - Assignment ExampleThe Canada electric shaver Tax benefit came to existence as a response to a commitment made by the parliament of Canada in the year 1989, to completely eliminate child poverty in Canada by the culmination of that millennium. For a person to qualify for this payment they must be living with and providing care to a child of bel offset 18 year, must be Canadian residents, and must have a common-law provide or a spouse. This paper aims at discussing how children should be treated in the tax system. The first m Canada introduced financial assistance to families with children bellow the age of 18 was in the year 1945. This was made possible finished the Family Allowance Act of 1944. In 1979 the monthly rate of family allowance was reduced from 25.68 dollars to 20.00 dollars. When income taxation was introduced in Canada in the year 1918, tax exemption was allowed for each child. The Canada C hild Tax Benefit was introduced in the year 1992 and took rig in the year 1993. The Canada Child Tax Benefit aims primarily at low income families with parasitical children. The interlock effect of all these changes was that higher income families were treated the homogeneous way for tax purposes in parasitic of the number of dependent children in the family (Hale, 2002). The Harper government reintroduced some modest tax breaks for higher income families with children, including tax credits for dependent children and childrens fitness and arts credits. The Harper Government alike introduced the Universal Child Care Benefit which pays $1200 per child as taxable income to parents. According to Robert M. Haig and Henry Simons income is defined as values of commodities and services that a citizen consume minus or plus any change in net worth in a given period of time. This definition of income is commonly known as Haig-Simons definition of income. In this combat both outflow and inflow of resources are taxable (Hale, 2002). Given that children bellow the age of 18 do not have any activities that generate income but have activities that require resources it will be partial if their consumptions are taxed equal to the grownups. When parents or guardians spend money on commodities and services that relate to the upbringing of their children, at that place is a certain amount of money that is taxed. This might make life harder for families with children, especially those with low income. This explains the want of the Canada Child Tax Benefit. The Canada Child Tax Benefit highly contributes to the horizontal equity in the Canadian tax system. Horizontal equity in taxation refers to equal taxation of individuals with the same amount of income. In a case where two people have equal gross income, people with children will be taxed more. This is because they always have to spend more as compared to the childless individual. The increased expenditure is because t hey have free person to take care of. The Canada Child Tax Benefit creates equality by making incontestable that those with children get some tax relief thus making their general taxation almost the same to that of people who do not have children (Hale, 2002). This makes sure that no income earner is subjected to unfair taxation. It also ensures that the low income earners have an easy time bringing up their children. The Canada Child Tax Benefit can also contribute to vertical equity in taxation. Vertical equity is a principle which states that citizens with higher income should always pay more taxes as compared to those with low