Tuesday, October 30, 2007

Feds be cuttin' taxes!

Here's some news I've been waiting for for many years. With hordes of federal revenues coming in, this is welcomed relief, but they can always do better.

In a fall fiscal update today, federal Finance Minister, Jim Flaherty announced the following:

  • 1% reduction in the GST effective Jan. 1, 2007 putting it at 5%
  • An increase in the basic personal amount exemption to $9,600 from $8,929, retroactive to Jan. 1, 2007;
  • Two years later, on Jan. 1, 2009, the basic personal amount exemption will be increased to $10,100;
  • Reducing small business income tax to 11 per cent by 2008;
  • $10 billion in federal debt relief; and,
  • The lowest personal income tax rate moves to 15 per cent from 15.5 per cent, effective Jan. 1 2007, undoing a change made in the first Conservative budget.
  • Corporate tax rates to fall by a third by 2012 (22% to 15%).
This is all good news. And it looks like the Liberals are going to support it.

I wished that the lower and middle income tax brackets were cut further though, say a steady decline like they're doing with corporate tax rates. Why not a 1% reduction each year for the next 5 years?

I like the $10 billion going to the debt. Little does anyone remember that a month or two ago, he put $12 billion, but made little announcement about it. That payment saved on interest payments, so that is probably where he can retroactively cut the low income rate by half a point.

With the GST cut, too bad it wasn't before Christmas. Methinks a lot of gift certificates will be handed out in stockings. The cut also makes Canadian goods look cheaper, although we're getting gouged by up to 25% by middle men who aren't passing the exchange rate import savings onto consumers.

All in all, I'm pretty happy with this and it's put me in a good mood.

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