Showing posts with label tax cuts. Show all posts
Showing posts with label tax cuts. Show all posts

Saturday, September 15, 2007

GST Cut Falls Flat



Here is a new definition of Flat Tax.
A tax cut that lands flat, as in flat on its face.


Last year's GST cut did not stimulate increased consumer spending or the economy and, unlike some other tax cuts, will not pay for itself in the long run, a new analysis has concluded.

"Do tax cuts pay for themselves? Well, certainly the GST reduction didn't," Global Insight said in an analysis Tuesday of the costs and impact of the one-point cut in the sales tax rate by the minority Conservative government to 6% from seven last July.

"The relationship between GST revenues and consumer expenditures reveals no significant evidence of stimulated consumer spending," concluded the analysis, based on Finance Department fiscal reports that run through June 2007 -- the first 12 months since the Harper government carried through on its election promise and cut the GST.

"A cut in almost any other kind of federal government tax would have been more effective in stimulating economic growth and would have resulted in it getting more of the lost revenue back," Dale Orr, the think tank's chief economist, and author of the report, said in an interview.

Among the tax cuts that would be the most effective in stimulating economic activity and boosting future revenues would an income-tax cut, which as well as leaving people with more money to spend, would encourage them to work longer and harder to earn more, Mr. Orr said.

However, he noted that the Conservative government instead raised personal income taxes in its first budget.

"That was done specifically to finance the GST cut," Mr. Orr said.

Insured workers pay GST which was intended to address the national debt, yet we have not received any evidence that all those funds are doing that. Insured workers then pay GST for servicing the national debt, pay income taxes to fund programs and serve the national debt and then workers and employers pay down the national debt yet again through their EI premiums - not voluntary contributions!

VAT (value added tax) and GST (goods and service tax) are two of the fastest growing taxes globally, a new report launched today by PricewaterhouseCoopers demonstrates. The report, Shifting the balance –the evolution of indirect taxes, offers an insight into the growth of indirect taxes and focuses on a number of key themes such as the shift from direct to indirect taxes, barriers to business and the need for reform, litigation, and the use of technology in indirect tax compliance.


It suggests that this could reflect a global trend by governments to focus on the certainty of revenues from VAT/GST and a desire to shift compliance costs from tax authorities to businesses. The report describes how, in light of the evolution of indirect taxation, there is a further challenge not to be forgotten. VAT systems can be regressive in nature and also potentially inflationary. It recommends that governments considering the introduction of such systems to enhance global tax competitiveness, need to bear in mind measures that will ensure a level of welfare for the lower paid individual taxpayers, including the potential for applying reduced tax rates or even zero tax rates for basic goods and services or those supporting other social aims, such as relieving the burden on the elderly or disabled.



SEE

Tax Cuts For The Rich Burden You and Me

Tax Fairness For The Rich



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Saturday, August 25, 2007

Mrs. PM Stay At Home Mom



Barbara Smith of Calgary shares something in common with Laureen Teskey aka Mrs. Stephen Harper. They are both professionals from Calgary. One has chosen to be a stay at home mom the other supports her right. Barbara's business is lobbying for tax credits for stay at home moms. Which would include 'professional' working moms; like Laureen.


Laureen Teskey Harper runs a graphic design business from the Harper/Teskey home,

Laureen Teskey, 42, wife of newly-elected Prime Minister designate Stephen Harper is by profession a graphic designer who used to run a thriving design firm in Calgary.

In fact, Ms. Teskey, who now also goes by the name of Laureen Harper, met the her future husband when she was a member of and graphic designer for the Canadian Reform Party, of which Harper was a Member of Parliament for in the 1990s.


Real working women, the majority of Canadian women, professional or wage slaves, support their families by working out side the home .

They don't have the luxury of choice, like Mrs. Stephen Harper nor of benefiting from Barbara's tax breaks.


Engendering the State: Family, Work, and Welfare in Canada -
by Nancy Christie - 2000 - Political Science - 480 pages


See:

Bank Union

Paleontologist Versus Paleo-Conservatives

Feminizing the Proletariat

UN Report Says We Need A Living Wage

Whose Family Values?



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Friday, August 24, 2007

Glass Half Full

In true blue fashion neither the Alberta Government nor their Federal cousins can calculate.

Someone get these guys an abacus.

Alberta surplus jumps in first-quarter projection


Fed surplus more than forecast, again



In Alberta though we have a regime stuck in the nineties, and even this surplus will end up somehow being a deficit when it comes to government spending.

While the Federal Surplus is helped along by the Conservatives delays in funding their eco-programs.



SEE:

Tax Cuts For The Rich Burden You and Me

Tax Fairness For The Rich



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Tuesday, August 14, 2007

The Cost of War

That's Trillions of dollars.


U.S. NATIONAL
DEBT
CLOCK


The Outstanding Public Debt as of 14 Aug 2007 at 09:16:31 AM GMT is:





$ 8 , 9 7 3 , 6 9 2 , 9 6 9 , 8 4 7 . 8 3


The estimated population of the United States is 302,702,356

so each citizen's share of this debt is
$29,645.27.


The National Debt has continued to increase an average of

$1.47 billion per day since September 29, 2006!



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Friday, August 03, 2007

LOL III

If a tree falls in the forest.....

"I think there's definitely been a will inside caucus to explore the tax-cutting side. I think that's something we've been discussing, especially leading into this summer caucus," said Rahim Jaffer, chair of the parliamentary caucus.

"I know the minister of finance was particularly interested to hear what caucus was thinking on those particular issues ..." he told reporters.

Finance Minister Jim Flaherty was not at the meeting.

If he was so interested why wasn't he there?

SEE:

Can't Get No Respect

Conservatives New Nanny State

Canadian Values

Tax Cut Fetish

Flaherty



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Wednesday, July 11, 2007

Tax Cuts For The Rich Burden You and Me


Two recent stories point out the failure of the 'peoples government of Canada' to meet the peoples need. Instead they have passed on the tax burdens once again to Johnny and Janey Canuck. And these assessments don't come from the Left but from the Right.

Basically reminding us that Jim Flaherty's much vaunted Tax Fairness is not.

Misdirected Tax Reforms Driving High Canadian Tax Rates: C.D. Howe Institute


Targeted tax relief doesn’t cut it, think tank says

Workers bear the brunt of taxation with high personal income, payroll and sales taxes, the report stated, with the Canadian effective tax rate on labour at 45.9%, down slightly from 46% in 2006.

"As economic studies have shown, the effect of such high effective tax rates on employment income is to reduce the incentive to work, especially for secondary workers in the family," said the report.



- Finance Minister Jim Flaherty is urging provinces to go for a tax change that would shift billions of dollars a year in corporate taxes to the shoulders of individuals.

In this year's federal budget, Flaherty renewed Ottawa's push to get all provinces to harmonize their sales taxes with the goods-and-services tax (GST).

However, full harmonization by the five provinces that still operate retail-sales taxes --Ontario, B.C., Saskatchewan, Manitoba, and Prince Edward Island -- would shift $7.5 billion in what is now a tax on businesses to consumers, a new report estimates.

In Ontario alone, the shift would amount to $5 billion annually, said Jonathan Kesselman, a public policy professor at Simon Fraser University. "It's large," he said in an interview, adding that it's been a bit of a political sleeper.

"Harmonization's Achilles heel continues to be the visibility of the large tax-burden shift from business to consumer," Kesselman writes in the latest edition of Canadian Tax Highlights, a Canadian Tax Foundation publication.




See:

Tax Fairness For The Rich




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Friday, May 11, 2007

Deja Voodoo Economics

Gee it was earlier this week that I reported on this.Except that Stats Can report was more blue sky messaging, the glass half full rather than the glass half empty.

In that case you had to read between the lines, this is more honest reporting. No blue skying this, tax changes have only benefited the rich.


Rich get richer, poor get poorer, study finds

Updated Fri. May. 11 2007 8:55 AM ET

Canadian Press

OTTAWA -- A new study says the gap between rich and poor is widening in Canada, appearing to confirm that the rich do indeed get richer while the poor get poorer.

Statistics Canada found that inequality in after-tax family incomes has increased over the past 15 years.

The study says that while the tax-transfer system changed in many ways throughout the 1990s, it reduced income inequality by as much in 2004 as it did in 1989.

The study found that incomes among the top 10 per cent of earning families rose by 22 per cent between 1989 and 2004, while at the same time incomes fell 11 per cent among the poorest families.


SEE:

Canada's Wealthy, Still

Productivity

Taxes

Wealth


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Tuesday, May 08, 2007

Flaherty Flip Flops

Okay so when will the Conservatives back track on their failed Child Care program and reinstate funding for actual child care spaces. Oops that of course affects only Martha, Henry and the kids, not corporations and CEO's.

Flaherty backtracks on tax measure

In a reversal, Finance Minister Jim Flaherty says a new controversial tax measure will be rewritten to ensure that legitimate Canadian corporations can continue to invest abroad and deduct the interest charge from their taxes.

Under pressure to back down from a "sleeper" measure in the March 19 budget that Canadian businesses said would cost them more than $1 billion and make them less competitive, Flaherty confirmed yesterday that draft legislation being prepared by the finance department would ensure that the provision only went after tax havens and so-called double dipping.

Flaherty blitzed on Alcan bid

Nevertheless, news yesterday of Alcoa Inc.' s US$33-billion takeover bid for Alcan turned up the heat once again on Mr. Flaherty and his proposed move to limit companies' ability to deduct interest on foreign financings.

Tax specialists, business groups, blue-chip chief execdutives and think-tanks have weighed in in opposition to the move. The government has said the proposal would end the practice by some Canadian-based firms of obtaining two or more deductions for interest expenses incurred to finance offshore operations.

Last month, Richard Evans, Alcan CEO, said in a published interview that the tax change could make the aluminum maker susceptible to a foreign bid because it would hinder Alcan's ability to grow through foreign acquisitions.

SEE:

Gildan Sweat Wear

Tax Fairness For The Rich


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Wednesday, May 02, 2007

Whine Me A River


The loonie's impact is hardest on manufacturers in Central Canada as its impact on western manufactures is being offset by the high demand for their products, Myers said.

There's not much the Bank of Canada can do to help firms deal with the strong dollar, Myers said. However, governments can continue to cut taxes on investments in new machinery and equipment and reduce their regulatory compliance costs, he said.

"The high dollar has forced manufacturers to become super-efficient, but they still face a lot of mandatory overhead costs," he said.



If they are so efficient then they should be able to plow their record profits back into their companies, instead of investing them in the stock market or sending them offshore to tax havens. Of course "super-efficient" is just another way of saying job cuts.

See:

Productivity Myth

Canadian Workers Poorer Today Than Yesterday

Variable Capital


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Wednesday, January 31, 2007

Tax Fairness For The Rich


Income Trust investors were given the bums rush last fall when Finance Minister Jim Flaherty announced that the Conservatives were breaking their promise and taxing this lucrative tax loophole. But wait it was just an announcement they still haven't come up with a policy yet. Canada's income trust bill not ready yet

And so the reason for the rush to judgement on Income Trusts? Why they booted Garth Turner out of caucus only the week before. And then they adopted his policy on Income Splitting which they had denied was a priority prior to October 31. It is all political optics.
In an attempt to appease upset investors, the government said it will increase the seniors tax credit and allow income splitting. “Pension income splitting is a major positive change in tax policy for pensioners and seniors,” Flaherty told the committee.


Because so far Flaherty has not come up with any more evidence of Income Trust impacts on the tax system than what his Liberal predecesors had found. Suspicious that. Of course the rush by big Canadian corporations to become income trusts and avoid corporate taxes caught the Tories off guard.

The boys on Bay Street gave them the bums rush so they returned it in kind. Caught off guard they rushed to judgement and gave Bay Street a Halloween trick while promising retirees and seniors a special treat; income splitting.

This is the key element of the Conservatives tax fairness plan; Garth Turners idea of Income Splitting. Which is neither fair nor good policy, but like the GST cut it is good political optics. However like the Income Trust policy it is still only speculative. Income Splitting is not a reality, yet.

Lobbyists suggest the signals are strong that the minority government could muster enough support for pension-splitting plan. But getting it passed may be complicated because it is likely to be treated as part of a package of measures that includes its controversial plan to phase out tax breaks for income trusts.



Those advocating for income splitting are the same right wing lobbyists like REAL Women, who lobbied for the Tories Child Tax Bonus and opposed daycare funding. They want tax credits for living at home moms with kids. That is they want taxpayer to pay for wealthy folks who can afford not to work two jobs. They do not want to pay for other folks daycare being the greedy parasites they are.

A 34-year-old Kemptville, Ont., woman with three kids at home and a husband commuting to a computer job in Ottawa is the chief organizer for the Parliament Hill conference Turner hosts Tuesday.

Sara Landriault, national coordinator of Care of the Child Coalition, says spouses who care for children at home, the vast majority being women, should be paid through the tax system for their work.

She acknowledges a sobering fact a sobering fact Turner himself discovered in a research paper he commissioned from the Library of Parliament. Though he calls the income-splitting scheme a tax reform for the middle class, the library document shows it is actually the upper - maybe upper-upper - classes that would benefit most.

"Sure, they pay more taxes, they're going to get more of it back," says Landriault.

And that doesn't even take into account lone-parent families, the majority of whom are headed by a woman and many of whom live below the poverty line, says Martha Friendly, one of Landriault's staunchest opponents and co-ordinator of the Childcare Resource and Research Unit at the University of Toronto.

"Low-income single mothers, they don't get anything out of this," says Friendly, noting with apprehension that Turner's own research shows the move would take $5 billion out of federal revenues when it's combined with income-splitting for pensioners. "It's cutting taxes for people who have more money."

Critics of the idea also point out it will do little or nothing to help low-income singles or couples who arguably need help the most.

But John Williamson of the Canadian Taxpayers Federation stresses that higher-income couples shoulder a disproportionate share of the tax burden.The weight is especially heavy for single-earner families.

Well duh they earn more they should pay more taxes. But of course that's the right wings definition of class warfare, taxing the rich. Because only those who are wealthy can afford to have an unemployed spouse living at home.

You may have heard the recent news from the Census Bureau that as of 2005, and for the first time in recorded history, more than half of all adult women are living without a spouse. There are plenty of implications that arise from this latest finding, but as the New York Times points out, contrary to popular perception, this so-called “marriage gap” isn’t about gender, but instead, it’s about education and social class -- women with lower socioeconomic attainment are less likely to marry than women with higher socioeconomic attainment.

And to add insult to injury the folks who will benefit the most from income splitting of pensions will not be widows, the largest group of single pensioners in Canada and the poorest, or the average working class family but those who can afford to retire early or retire and continue working.


Tax relief -- at what cost?

Income-splitting is a vote-getter that would save middle-class families billions of dollars a year in taxes, but experts say that doesn't make it sound fiscal policy. MPs inside and outside the Conservative party are urging Prime Minister Stephen Harper to lower taxes in his upcoming budget by allowing couples to combine their incomes and divide the tax load. Some experts are saying the cost of income-splitting -- anywhere from $3 billion to $5 billion a year -- could blow a hole in the nation's finances.

Tax fairness is rhetoric for tax breaks for the rich and wealthy in Canada.

Rules for this year's biggest financial-planning treat will discriminate in a tricky and illogical fashion among those who have yet to turn 65. That the treat is tricky may explain why Finance Minister Jim Flaherty chose Halloween to announce his plan, but not why he used the term "tax fairness."

He plans to let many couples save taxes by splitting income more equally between the two partners, starting with 2007 tax returns. This golden opportunity will not be restricted in a simple fashion to those of a certain age, income or work status. Instead, eligibility will depend on the type of income.

This is unfair. At one extreme, we could have a former deputy minister splitting pension income as early as age 55, while also collecting a pay cheque from a new job. Yet, an unemployed retiree who never contributed to a pension – or was forced out before qualifying – would have to wait until age 65 to split income.

Basically, you would need to receive monthly payments directly from a registered pension plan, or be receiving income as the surviving spouse of a deceased member of a pension plan in order to split income with a spouse or common-law partner.

Here's how a finance department spokesperson explained the rationale for discriminating on the basis of income type, rather than a person's age, employment status or, say, one's eligibility for a lifetime income.

"The purpose of the age 65 requirement is to target the pension income credit to retired individuals. Individuals have much greater personal control" over when they withdraw money from registered retirement savings plans, registered retirement income funds and life income funds as opposed to registered pension plans.

"Without the age 65 eligibility rule, many individuals who are not retired could gain significant tax advantages well before they attain age 65 by arranging to withdraw money each year as RRSP annuity or RRIF income while still saving for retirement.

"Individuals in receipt of (registered pension plan) income, on the other hand, generally have little control over the timing of their pension payments; they usually only receive such payments when they are retired."

The problem with the line of reasoning is that many pension recipients can and do retire before age 65, and they can and do find new jobs. That can particularly include former police officers, teachers, armed services personnel and civil servants. They collect both a pension and a paycheque or consulting fees.

Meanwhile, others who do not collect a pension could find themselves unemployed and having to rely on their savings.


See:

Income Trusts

Tax Avoidance

Tax Fairness

Flaherty

Garth Turner

Pensions

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Tuesday, January 30, 2007

Income Trust Blowback


Begins today. I guess these folks won't be voting for Harpers Conservatives.

Meanwhile Financial Post (the Financial Post!!!) exposes the self interested business lobby that is pro Income Trusts; the Canadian Association of Income Trust Investors (CAITI) pointing out that they are not 'really' investors;

Whether CAITI actually represents trust investors is debatable. One witness appearing tomorrow, independent consultant Dianne Urquhart, says the association is in reality sponsored by trust vendors and the law firms and accountants supporting them. They are trust "investors" only to the extent they invest in their own product.

And the FP to its credit points out, as I have here the concerns that Income Trusts were always a ponzi scheme, benefiting fund managers and owners more than investors.

Contrary to what the spin masters would have us believe, not all pensioners are opposed to the government's decision to tax trusts. The National Pensioners & Senior Citizens Federation, which speaks on Thursday, supports Flaherty's decision. Its 450 chapters and clubs represent a million seniors and pensioners, including the 300,000 members of the United Senior Citizens of Ontario.Even before the Halloween decision came down, the NPSCF was concerned about "income trusts being sold to seniors on the basis of cash yields that are inaccurate, inflated and misleading."

What the Liberals should have done and didn't and what the Conservatives promised not to do, but did, affected investors, sure, but only a small number of well off seniors. Canadian seniors who have been screwed by Income Trusts should remember the financial term used for these kinds of investment; high risk.


This is not the same kind of rip off seniors in Alberta faced under the Tories in Alberta in the eighties (during the last big boom) when Dial Mortgage Abacus-Cities and Principal Trust collapsed. Those were avoidable and had been backed by the Alberta Treasury Branch as well as the Government. Yet when they collapsed seniors were left holding the bag.

What keeps getting lost in all this brouhaha is that Flaherty is promising business another tax cut to make up for taxing income trusts. That's the real meaning behind his euphimistic "Tax Fairness". Nothing fair about it. Just another government handout to those who already have the upper hand.

See:

Income Trusts

Tax Avoidance



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