‘It was a very simple thing’: This tax return from 1953 shows just how complex our tax system has become


Over the years Sam Cass, 98, has diligently kept all his tax returns. Jamie Golombek takes a look and sees what’s changed

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For decades, Sam Cass, 98, did his own tax return — by hand. But he had to give that up when he turned 80. In a video interview last week from his retirement home in Thornhill, just north of Toronto, Sam explained that tax filing had become too complicated over the years.

“It got to the point where I couldn’t handle it anymore,” Sam said. “In the old days, it was a very simple thing. The whole tax return was: What was my income and what was my outcome? Nothing else!”

His son, Murray, was recently going through his father’s files and discovered that Sam had diligently kept all his tax returns back to 1953. They were, indeed, all done by hand.

“He had beautiful handwriting,” Murray said. “(Dad) even won an award of penmanship while in school.”

Indeed, returns were a lot simpler back in 1953. The four-page booklet that Sam filled out, which we’ll take a closer look at below, had to be either dropped off by hand or mailed to your district tax office.

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“It took me two or three hours of concentrated work to do the returns,” explained Sam.

Murray, who now prepares his dad’s return along with the returns of some other family members, also did them all by hand until six years ago, when he switched to a tax software program.

“My best friend is a tax accountant, so I send him the PDFs of the returns and wait for his OK before sending them off. He always provides some good suggestions,” Murray said.

Sam was born in Vilnius, Lithuania, and immigrated to Canada with his parents in 1923, when he was six months old. He earned his bachelor of science from the University of Toronto. In December 1943, Sam, having previously joined the Canadian Army Reserve, enlisted in the army as a signalman in the Royal Canadian Corps of Signals. After basic training, all the men Sam trained with were shipped overseas, but Sam was held back and assigned to serve as a radio instructor to future recruits. Few men from his detachment survived the war.

Sam Cass, now 98, right, served under the Royal Canadian Corps of Signals during the Second World War, left.
Sam Cass, now 98, right, served under the Royal Canadian Corps of Signals during the Second World War, left. Photo by Courtesy of the Cass family

After Sam’s discharge in 1945, he went on to do a masters in civil engineering-transportation planning from the University of Waterloo. After graduating, Sam enjoyed a lifelong career in transportation, joining the staff of the City of Toronto as the assistant city traffic engineer in 1950.

In 1953, Ontario passed the Municipality of Metropolitan Toronto Act creating a federated system of government made up of the City of Toronto and a dozen surrounding municipalities, encompassing some 620 square kilometres, and Sam found himself at the helm of an agency employing some 1,000 full-time and contract staff. In 1989, Sam retired from the Municipality of Metropolitan Toronto as the Commissioner of Roads and Traffic. 

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Let’s take a look through Sam’s 1953 return and see what’s changed — and what’s remained the same.

1. Income, but no capital gains 

Sam’s 1953 employment income from the City of Toronto was $5,014, which is equivalent to a salary today of just over $49,000 in 2021 dollars. While he had no investment income to report that year, the 1953 return does ask you to report your interest income, dividend and rental income. Noticeably absent from the 1953 return, of course, is any mention of capital gains, as they only started being taxed in 1972.

2. Exemptions were a good thing  

On his 1953 return, Sam claimed a total of $2,150 in “exemptions,” including a “personal exemption” of $1,000 for himself, an additional $1,000 for his wife, and $150 for his daughter. Sam would go on to have two more children, seven grandchildren and seven great-grandchildren. He also claimed $21 in charitable donations.

Exemptions were deductions from net income to arrive at taxable income. The exemptions were repealed by the 1988 tax reform and were replaced by the non-refundable credits we have today. For 2021, the federal basic personal amount is $13,808 and is worth 15 per cent, or $2,071. The federal donation credit is 15 per cent on the first $200 of annual gifts, and generally 29 per cent for donations above that. Provincial credits work similarly.

3. A time before RRSPs 

Sam contributed $250.70 to his pension plan in 1953 and was able to deduct that amount from his taxable income. You’ll note that Sam’s return had no line on which to deduct an RRSP contributions as the RRSP wasn’t created until 1957, when your contribution limit was set as 10 per cent of the prior year’s income, to a $2,500 maximum. And, if you missed contributing for a certain year, your RRSP contribution room for that year was lost forever. For 2021, you can contribute 18 per cent of the prior year’s earned income up to a maximum of $27,830 and unused contribution room automatically carries forward from one year to the next.

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4. An 83 per cent top tax rate 

Today, we have top marginal rates as high as 54 per cent for the highest income-earners in some provinces. If you think that’s high, back in 1953 the top marginal tax rate was 83 per cent for those with taxable income over $400,000. In 2021 inflation-adjusted dollars, that’s equivalent to income over $3.9 million.

5. No provincial taxes … temporarily 

Interestingly, the 83 per cent figure was the top federal rate as, in 1953, there were no provincial taxes as the right to levy income taxes was temporarily suspended in 1941 to allow the federal government to collect much needed revenue for the war effort. As a result, the provinces accepted federal grants as a substitute for the right to impose their own direct income taxes. In 1962, the feds reduced their own income tax rates to make room for the provinces to again impose their own provincial income taxes.

6. Foreign income on the radar 

Back in 1953, there was a small section on the bottom of page 4 of the return called “Income from the United States,” which asked whether you received income from the U.S. on account of yourself or any other person in Canada or abroad. If yes, you were directed to file a special form UST1 as well as a US form 1042. While Canadian residents are taxable on their worldwide income, in the 1950s, few taxpayers likely had any foreign income beyond the U.S.

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Fast forward to the 2020 tax return where there’s a question on the bottom of page two as to whether you owned any foreign investment property (excluding foreign property in registered accounts) in 2020 where the total cost amount was more than $100,000 at any time last year. If so, you are directed to complete Form T1135, “Foreign Income Verification Statement.”

7. Of gifts and death taxes 

On page one of the 1953 return, it asks whether, in 1953, you transferred “any property, securities or cash of a value in excess of $1,000 to any person” and if the total you gifted exceeded $4,000, you had to complete a separate Gift Tax Return.

Gifts were on the taxman’s radar because of their connection to death taxes, which were a component of the Canadian tax system for nearly a century until they were repealed at the end of 1971. The gift tax played an integral role in preventing someone from giving everything away prior to their demise to avoid the death tax. Prior to 1941, succession duties were only levied by the provinces, but that year, the federal government starting imposing its own death taxes under the Dominion Succession Duty Act, for individuals who died on or after June 14, 1941. In 1958, this Act was replaced by the Estate Tax Act, which was modelled on the U.S. estate tax system, which exists to this day south of the border.

8. The bottom line 

In 1953, Sam’s tax bill was $507 on $5,014 of employment income, taking into account his deductions and exemptions, for an effective tax rate of 10 per cent. If Sam’s net income of $4,737 was translated into 2021 dollars ($46,400), his 2021 tax bill (including the basic, spousal and employment amounts) would come to about $3,609, for an average tax rate of around eight per cent.

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While Sam was meticulous in his record keeping, you don’t have to hold on to your returns for 67 years. According to the Canada Revenue Agency, you must keep all required records and supporting documents for a period of six years from the end of the last tax year they relate to.

When I asked Sam why he kept his returns for so long, he responded matter-of-factly: “As far as paperwork was concerned, I always kept everything. Just personal habit.”

[email protected]

Jamie Golombek, CPA, CA, CFP, CLU, TEP is the Managing Director, Tax & Estate Planning with CIBC Private Wealth Management in Toronto.

In-depth reporting on the innovation economy from The Logic, brought to you in partnership with the Financial Post.

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