Of premiums, surtaxes and income taxes in Ontario

Since joining the ranks of the gainfully employed, my days of tax-free living as a postdoctoral fellow have come to seem like hazy distant memories. Not that I mind paying my taxes. Indeed, I'm very fond of the tax-and-spend approach to government services. Tax me heavily, but provide me with top notch health care, education, transportation infrastructure and other services in return.

With those socialistic bona fides established, I feel compelled to observe that even my tax-loving self recoils a little bit every year as I complete my Ontario income taxes. It's not that the tax rates are particularly high - they aren't. It's the fact that after I calculate my basic tax rates, I then have to perform two additional calculations to establish my health premium surtax and my Ontario surtax, and then add these amounts onto the basic tax. I have no illusions that the collective health premiums paid by Ontario taxpayers cover the full cost of our health care services (even when the government isn't running a deficit) and I can't imagine that other taxpayers think this is the case, and so I wonder about the optics of this approach.

Have there been studies done of how taxpayers react to these additional tax calculations? Because my gut feeling is that there is a negative psychological impact attached to performing additional surtax and premium calculations, and that perhaps a significant proportion of the taxpaying electorate might be happier just calculating the lump sum at tax time. With the benefit of hindsight, I wonder if the short term benefits of Dalton McGuinty's technical keeping of a promise not to raise income taxes are annually offset by taxpayers grumbling as they figure out the amount of their additional premiums and surtaxes.

Of course, I could be completely wrong about this, but it might be something that future tax policy-makers might want to consider.

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