So:

A loan of $1 m is given to Mr. Richbitch McDouchebag based on owning $1 m worth of stock.

Eventually that loan has to be paid off.

When McDouchebag sells off some stock to pay the loan, the amount paid presumably enters a bank account, either in their name or in the name of a numbered company they control, yes?

That’s income. Apply tax to it before they pay off the loan. In Canada, the top marginal tax rate is 33%, so $330k minus the other marginal tax amounts for the lower brackets would be applied before this money can go to pay off a portion of that $1 million loaned.

It’s either this, or we rip up the income tax act alongside finding a different revenue stream for the government.

I’m for whatever we can get on board with most people, because I am pretty sure most of us who aren’t accountants hate filing income taxes.

If we instead got most of our money from other things that the government sold, then (a) big companies couldn’t use the same accounting tricks to hide income, as we would no longer be taxing those precious profits of theirs (b) the rest of us wouldn’t have to go through tax pain every April.

I realize that for some people, they get things like tax credits for a bunch of things like home renos, etc.

Perhaps under a no income tax system, the incentive to do these activities that reduced their income tax would have to be changed to something more tangible, like a guaranteed lower rate on utilities or something. I dunno.