SOME ASPECTS OF THE DEVELOPMENT OF THE PERSONAL INCOME TAX IN THE PROVINCES AND MUNICIPALITIES OF CANADA UP TO 1930*

Abstract

THE THESIS WAS WRITTEN on the foregoing subject: (1) to trace the historical development of income tax statu-tes; (2) to try to ascertain the fiscal importance of the tax and the degree of success with which it was administered; (3) to review what had been written about the tax. Nearly forty municipalities from the western to the eastern coast of Canada were visited on a trip that took almost a year. Interviews with government officials, the public accountants of provincial governments, the tax rolls of cities and reports of provincial and municipal government commissions on taxation, were chief sources of information. The absence of reliable statistics impeded the study at many points. The development of the income tax in Canada goes back to the time of the American Revolution, when the Provincial Government of Nova Scotia attempted,with little success, to levy a restricted form of income tax. In the second half of the nineteenth century, the tax was used widely in New Brunswick and Ontario cities. By 1930 a municipal income tax had been used at one time or other in all provinces save Manitoba and British Columbia, but it had become a significant source of revenue in only a few cities in Ontario and New Brunswick. The governments of British Columbia, Prince Edward Island, and Manitoba were the only three provincial governments utilizing an income tax in 1930. At that time the tax was still more important as a municipal tax than as a provincial tax. The income tax developed historically as an adjunct of the personal property tax, which in turn was a part of the general property tax. Two reasons largely account for the development of the tax. One was the need for revenue. The other was the conviction that without the tax a number of persons, such as professional men, would not be paying their fair share of taxes. The municipal income tax usually was imposed at the same flat