Raise taxes but not necessarily raise taxes and True Patriot Love but not necessarily patriotism

Well, Interim Liberal Leader Michael Ignatieff is at it again, saying one thing one day and qualifying it the next.

"We will have to raise taxes," but not at the expense of hurting the recovery from this recession, Mr. Ignatieff, on a four-day tour of Southwestern Ontario, told a meeting of the Cambridge Chamber of Commerce.

And then...

"But let me repeat, so there's no doubt about it. No Liberal party with a brain in its head is going to raise taxes in the middle of a recession."

Asked about tax hikes during good times, Ignatieff said: "Hopefully not then either."

Now that's leadership.

And now he has a book out called "True Patriot Love". Aw.

A review from Macleans...

Ignatieff proposes patriotism as the sustaining motif in this grand lineage that reaches down to him. On one level this is merely a convenient way to package campaign fodder for a man who, after all, hopes the next federal election will make him prime minister.

You know, when I was away from Canada for 7 months on a work contract, did I miss my home? Of course.

So I can sympathize with Ignatieff touting his patriotism being away for 30 years from the very country he wants to lead.

As you can see in the video below, his patriotism is unwaivering...



And you can read more of these Iggyisms on the following blog:
http://www.bluelikeyou.com/ignatieffiggyisms/

"The Coalition is dead." Long live the coaltion!

“The coalition is dead. It's finished. It's over,” said [Bloc Quebecois leader] Mr. Duceppe.

Just last week, Duceppe said, "The coalition is stronger than ever." What happened?

Now that the Liberals are "reluctantly" supporting the budget (as predicted), NDP Leader Jack Layton now says he can't trust Liberal Leader Michael Ignatieff. (Does Layton trust anybody anymore? Sour grapes?)

Ok, so what does this mean now?

It means the Conservatives will be in power all year long, propped up by the Liberals, as Ignatieff wants regular budgetary updates from Harper.

It's too bad. I wished Harper and Flaherty would have soured the budget enough so that the Liberals couldn't support it and possibly force an election in which the Conservatives would have a better chance at winning a majority against the notion of a separatist-Coalition.

And that's why the Liberals dumped Dion so quickly and put in Ignatieff. Although they all signed that coalition promise document for the Governor General (including Ignatieff), it really wasn't binding after the prorogue anyway.

I don't think though, that Ignatieff has said anything significant to win over soft-conservatives. In fact, I think this budget really strattles the middle, forcing to push the opposition Liberals to the left more because, well, they have to oppose something!

If there weren't any middle class tax cuts, it would just be like a Liberal budget ... or heck, a coalition budget. Earlier in the month though, Ignatieff was FOR a middle class tax cut, then hearing that it would be in the budget, scrapped that idea and said he was against it.

Harper's long time goal is to replace the Liberals as the natural governing party. Every political move he's made is indicative of that strategy.

Now the question is, does Stephen Harper want to REPLACE the Liberals, or BE like them?

Except for the middle class tax cut, this budget makes me think so.

So while the old Liberal/NDP/(Bloc) coalition is dead, a new one begins, but it's really the old old one when Dion was leader of the Liberals.

So now we simply wait until Michael Ignatieff rebuilds the Liberal party until he's comfortable fighting an election .... and we'll wait ... and wait...

Long live the coalition!

The case for and against a deficit

Few people can outright buy a house or a car, which is why they take out a mortgage or a loan. The beauty of a house is that it usually increases in price so in a sense the mortgage is you paying yourself and increase in value is above the interest you pay to the lender. Owning a home is a good investment as it becomes the most significant part of your assets which you can also use to lien against later on in a reverse-mortgage for retirement, renovations, or what-have-you. Not only do you own the house, but the property as well, which alone, has value.

A car, however, usually depreciates. Cars are not a good investment, unless it's for business purposes. With fuel, insurance, repairs, maintenance, it's a burden. But soooo worth it at times. When fuel was above $1.40/L, it was cheaper to fly than drive.

Anyway, my point here is that there's good debt and bad debt. Sometimes it's good to buy something now while it's cheaper than later.

In the case of government, the sooner we spend on infrastructure, roads, and transit now, even by going into debt, it's actually much cheaper. I could give you numerous examples, especially in Edmonton where if they spent now, the project would be done and the city would have saved money in the long run. But they don't and construction and labour costs go up and up costing much more later on.

So with the current federal budget reported to have a $40 billion deficit (!), a lot of this is supposed to be economic stimulus in the form of targeted tax cuts, bailouts (loans?) to specific industries, and massive infrastructure spending.

I am all for the infrastructure spending as I mentioned. This will actually save us cash in the long run because the longer we wait, the way more expensive it gets and this country needs a big injection. It appears that there are a lot of project where the federal government is involved and this is a good thing.

The other reason why there's going to be a big deficit is that tax revenues are decreasing. While unemployment is between 6 and 7 percent, it's not near how it was in the early-mid 90's or early 80's, between 10 and 12 percent. It could be. But the point is that if someone isn't working, the gov't can't collect payroll, EI, or income taxes. Plus the person isn't spending as much, so there's no GST collected.

And it's this reason why the gov't doesn't want to see so many autoworkers without a job right now, so that's why they're helping GM and Chrysler.

But I will say this again, and I keep hearing intelligent economists saying that what we need to do is be spending more on higher level training and education and get our economy not so dependent on manufacturing, such as auto. Basically, invest in people. There's still lots of job shortages in key areas of I.T., health, accounting, and other areas. There's a reason for that. Our economy is demanding it.

What's appearing obvious to me now is that the government, whether Conservative or Liberal, Bush or Obama, are seeing where the free-market system works and where it doesn't work as well. They see that jobs are the key component and having credit and money flowing through is important.

In the end though, I don't see how a $40 billion change in Canada or a $825 billion change in the U.S. is actually going to make a huge impact on the economy in the long run.

What it's going to do is make us all dependent on the gov't when things go awry rather than take our own personal responsibility for it.

And it's amazing how we didn't learn that 75 years ago.

Let's just hope this deficit is temporary and the way out of it is for the gov't to cut its own useless spending, sell off useless assets, just like the rest of us regular folk have done.

Deficit Spending

It appears the upcoming federal budget is going to have everything in it--infrastructure spending, bailouts, tax cuts, retraining programs, etc. to try and boost the economy. Will it help? A little, but it won't cure it.

The tax cuts won't have effect on the economy until a few years later as folks will likely pay off their own debt and save a little to put into the new Tax Free Savings Account, but I'll take what I can get.

To me, the most imporant part is the retraining aspect as job losses are increasing and people need to get into sectors that have better job stability. I think eventually, Canada has to move its manufacturing out and replace with more stable, long-term jobs and this is done through accessible education and training.

Anyway, I thought the budget was going to be a modest one, with a slight deficit, and with a spoiler to have the Liberals vote it down and likely force an election which Harper could win a majority. But it appears newly anointed (read: 'not party elected') Liberal Leader, Michael Ignatieff, will probably have his caucus support it, basically killing the coalition. Aw darn.

However, with regard to deficit spending rumoured up to 30 billion, I have this to say (which I've been saying for years)...

If there are direct income tax cuts in this budget, then I could care less what the deficit is. Canadians have their own bills to pay and have been cutting their own expenses, using credit cards, getting loans for decades to get by. I'm mostly talking about low to middle income folks here who are taxed to the gills.

And if the gov't wants to get out of deficit, they'll have no choice but to sell off useless 'assets' like empty buildings, cut waste and improve departmental efficiencies.

This is really too bad as it appears they'll be deficits for the next several years, completely negating the paying down of debt and freeing up money from debt interest payments, which still makes up the largest piece of the budgetary pie.

Unfortunately, because Canada's gov't is one of the biggest in the world per capita, even ever since we've been in the black for the past 12 years, they only got to pay about a third of the debt down, because they were still increasing spending, although their tax revenues shot up.

So I'm glad both Harper and Ignatieff agree on tax cuts. In fact, they seem to be agreeing on a lot of things, including deficit spending.

One Liners

• The Conservative government tax relief package passed through the house. With the Liberals having sat on their hands throughout, you wonder who's more relieved. Too bad gas taxes weren't also lowered. (Plop plop fix fix..)
  
  
• Today, the Conservative government is tabling "An Act to provide for consultations with electors on their preferences for appointments to the Senate." Of course, Liberals will cry their usual "insenaty": -- "I've always been in favour of senate reform, but not piecemeal reform like this." In consulting with electors, I think they're sick of hearing you say that. (Not so much..? How's this one...)
  
  
• As you may have read, Brian Mulroney has called for a full inquiry into his dealings with Schreiber; this time he really wants to clear the airbus. (Ba dum dum!)
  
  
• Prime Minister Harper's poll numbers are up and Dion's are way down. After the tax package was announced, Conservative numbers went up and Liberals went down. Now after the Mulroney-Schreiber affair, Conservative numbers are down and Liberals are up. Is this what we call poll dancing? (Yes? Yes? Ok, no...)

Lowest Planet Taxes

Prime Minister made a speech to the Canadian Club today with some great tax sound bites:

"one of the most competitive and attractive tax environments on the planet."

I now wonder what taxes are like on other planets. The carbon tax on Mars must be really high (even though it's poles are melting too).

"Federal taxes will fall to the level they were at in the last year (1963) of the Diefenbaker government -- before the policies of the late 1960s, before Trudeau -- back to the lowest level in nearly half a century"

Ah yes, before socialism.

"the lowest corporate income tax rate among the major developed economies"

Oh no! Not those evil corporations like Ford and GM who provide thousands of jobs in Ontario!

"These are economists who believe the GST is a good tax; which of course comes from the school of economics that believes there's such a thing as good taxes,"

Harper is obviously not one of those economists.

"The Liberals' opposition to tax cuts should deeply trouble you, should deeply trouble every Canadian taxpayer,"

They always have.

"[Bob Rae] spent five years using Ontario as a lab experiment for tax, spend and borrow policies,"

Yep. And like Trudeau, Ontarians have been paying for it ever since.

"And keeping taxes down, not raising them back up, is key to keeping this country moving in the right direction,"

Yeah, no kidding. That's the most libertarian thing Stephen Harper has ever said.

These are the kinds of speeches I like to hear. Bravo!

Now let's hope continued tax relief announcements are made in the 2008 budget. But I get the feeling that there won't be any. Maybe a reduction in the middle rate, that would be nice.

Goods and Services Talk...

Libleader Stephane Dion today said if elected PM (what a dreamer!), he would rescind the GST reductions made in the last year by the Conservative government.

The Grit leader said many people believe the two percentage point cut to the goods and services tax was the wrong move. He said it amounts to $34 billion that the govenrment could spend elsewhere.

Where? Kyoto? And who are these "people"? Economists, professors, blah blah blah. Why doesn't he ask the average Canadian, who in the majority, don't like this tax.

Former Deputy PM, Sheila Copps, wrote today about this very thing and said that the further GST cut was "a masterstroke":

In their rarefied world, budgets are designed solely to boost productivity. Measures to achieve other public policy objectives are deemed political, as if somehow politics has nothing to do with taxation. Economists pontificate without having to get elected. Elected officials have to measure specific advice against the bigger picture.

On that count, Finance Minister Jim Flaherty pulled off a masterstroke yesterday. Flaherty gave half a loaf to those looking for across the board personal and corporate cuts. But he ignored their railing about the GST.

He listened instead to the taxi driver and the small retailer hanging on by a thread.

Most Canadians don't like the GST and want governments to reduce it. Political parties who ignore the consensus do so at their peril. It would be suicidal for any opposition party to bring down the government on the GST.

The biggest argument against a GST reduction is how it will affect inflation and whether the Bank of Canada increased interest rates. When the GST went down from 7 to 6%, did interest rates go up?

Go to the Bank of Canada website and see. Choose the daily Bank Rate from January 1, 2006 to December 31, 2006 and click 'Get Rates'.

Look at what happened from July 1, 2006 (when the GST went down a point) and onward. Did the rate change? Nope, not one bit. The rate held steady at 4.50 all the way until July 2007 when it increased to 4.75.

So should we listen to these "experts" who talk about inflation and all that when it comes to the GST? No. Even they can't find the info, which took me 2 minutes to find on the web.

I just don't see how anyone can disagree with a tax reduction that puts more money directly into the coffers of Canadians. Dion keeps yapping about how income tax reductions are better. The GST cut also helps those who don't pay income tax at all, which they'll be more people in this category now that the personal exemption has been increased and the lowest bracket reduced by half a percent, retroactive to New Years Day of this year. Sure, it's not a lot, but anything is better than nothing.

Reports are showing that the average tax savings for a Canadian will be about $250 a year, or about $21 a month.

Methinks too, that this reduction was just the beginning. In fact, methinks the only tax reduction the Liberals would have ever done was the lower bracket going to 15% if elected.

With the small business tax going down to 11%, guys like me who receive profit sharing bonuses each year also welcome this move as my company will have more money to dish out. Then that bonus will be taxed less as well. Then when I go spend that money, they'll be less taken out even further.

Now that Flaherty has trumped the Liberals on taxes, and believe me, I was getting worried they wouldn't, the Liberals have now been squashed on the right side of the spectrum.

It'll be up to the NDP to further squish them on the left and we can finally get rid of this ideologically and principly void party called the Liberals.

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.

Royal Reserve?

A lot of folks have blogged about their opinion and the opinions of others, experts, panels, about Alberta Premier Ed Stelmach's final decision on the oil and gas royalty review that has been all over the news.

To name a few of these bloggers, which I read on a daily basis (and you should too!):

Ken Chapman
Daveberta
Calgary Grit

Each offer a different insight. Ken says Ed made good. Dave, not at all. Grit, pretty much the same as Dave.

So under Ed's plan, in a few years "we'll" be getting $1.4 billion more than before where the panel recommended more sooner to put us at $1.9 billion. So the panel's recommendation would have added a couple billion more to the provincial coffers. Whatever.

Already, the government isn't lagging on the intake side and what have they done with it? How's our infrastructure and roads. How is our environment doing? How are the cities, homelessness (which Ed addressed today actually, but we'll see about that). Any better? Health insurance premiums eliminated? No no no?

And on the other side, since this announcement, as Big Oil was screaming about a crisis, jobs lost, etc., the markets didn't do much, and I suspect their profits will continue to rise due to higher and higher oil prices.

But as I said, in the end, Albertans really won't see a dime. I doubt even those who

With this extra revenue, do you think our taxes or insurance premiums (read: tax) are going down? Nope. It's all going to infrastructure and health.

Well okay, but still, do you trust that this will make ANY difference to these things?

With their record to go on and already record revenues, I have no faith whatsoever.

My last post said I'd drink a double Crown Royal to the oil workers themselves. Now I'm going to switch to Royal Reserve, although a lower quality, it's a much more fitting name to this whole thing don't you think, and symbolic of how the average Albertan is really being treated.

Speaking of Deep...

A study just released states that Canadians are deeper in debt than ever before (not including mortgages). This is not surprising. Everyone wants to keep up with the Joneses in purchasing the latest technologies, cars, and clothes, instead of saving or investing for the future.

Thing is, let's not forget that Canadians are also highly taxed. When the Chretien/Martin Liberals were in power, sure they eliminated the deficit and starting paying down the debt, but in order to keep inflation low, through the mid-late 90's, the average family saw their annual income tax bill increase by over $3,500... and a little each time, so we'd barely notice.

So it's refreshing to hear that the the current Conservative Finance Minister is looking to reduce our tax burden, and maybe, just maybe Canadians can pay off their OWN debt and save for the future.

Canadians have had deep wounds from high taxes for many years and even had salt poured on it. It's time to heal them, don't you think?

The First Cut Is The Deepest

So with the Throne Speech out of the way, and as I predicted, Stephane Dion's Liberals are going to let the Speech pass. Today, the Conservatives have introduced an omnibus crime bill with measures and tougher sentences that died on the order paper when the last session was ended.

Now, Finance Minister Jim Flaherty is talking tough on taxes.

Flaherty would not tip his hand Wednesday, but he made clear that he was about through with the targeted tax cuts of the past two budgets -- which included the significant, such as a tax benefit for low income earners, and the esoteric, such as benefits for children in sports programs.

"We've fulfilled most of our tax obligations that were in the platform, so now we can move to more broad-based tax reform," Flaherty said.

There is also talk of the promised further 1% reduction in the GST, putting it at 5%.

But getting back to income taxes, being that the Conservatives have been emulating the John Howard Australian Liberal Party, I challenge Minister Flaherty to take a page out of that party's pledge to significantly cut taxes by $34 billion over several years.

Under the plan announced jointly by Prime Minister John Howard and Treasurer Peter Costello, all taxpayers would get a tax cut — about $20 a week for those currently on average weekly earnings from July, rising to about $35 in 2010.

In annual terms, $20/week amounts to $1040/year and $35/week amounts to $1820.

So, come on Minister Flaherty, for this new session of parliament, make the first cut the deepest. Thing is, any of the wounds felt will be by the opposition Liberals, and now's your chance to pour salt on it.

14 thousand thousand thousand

Or you can call it $14 billion.

With the federal Conservatives paying off $14 billion in debt, there are two things I can expect:

1. My generation got really screwed by the previous generation for leaving us this massive debt to pay off with a continued high tax regime.

2. Hopefully my taxes that are paying down this debt won't be has high as my children's.

But I doubt the latter will prevail as I note the situation in Alberta, where since the debt has been paid off, there have been absolutely no tax reductions, other than seniors who don't have to pay health insurance premiums anymore. Now we find out today from the Alberta Auditor General that political staffers are getting insane bonuses, a couple MLAs got paid for no work done on a trip to Idaho, expenses are racked up, and the big whopper... that the province (read: taxpayer) has been short-changed up to $6 billion (that's 6 thousand thousand thousand) in oil and gas royalties over the past several years.

This article says it all.

I'd like to add that no social engineering or program can help a middle to low income person or family more than them simply keeping more of their OWN hard earned money other than lower taxes.

In conclusion:
WE ARE GETTING ROYALLY SCREWED BY OUR GOVERNMENTS.
THEY ARE STEALING OUR MONEY. AND IT'S GOT TO STOP.

Another "surplus"

The federal government "surplus" was predicted by Finance Minister Flaherty to be $3 billion. But it's more than double that at $6.4 billion.

I've already blogged a billion times about how government "surpluses" shouldn't be called that, but "overtaxation amount". When are middle and lower income folks going to get a break?

My inside sources tell me that Conservative MPs are quietly pushing for broad-based tax cuts in the next budget.

Canadians are way overtaxed. Enough of the social-engineering targeted tax cuts. Many Conservatives were very disappointed with the last budget where no income tax cuts existed, all to fix the so-called "fiscal imbalance" with the provinces. I just don't think that will ever please every province.

And I don't want to see a measly 1% cut for the lower or middle bracket. While I understand that can have an affect on inflation, how about a 1-2% reduction every year for the next 5 to 10 years? That would force preceding governments to look for ways to become more efficient.

But alas, Harper promised eventually to cut the GST to 5%. My guess is that's where things are going instead of income tax, but why not both? Why not?

What Alberta owes taxpayers

They predicted $4 billion.

But now it's over $8 billion.

Good estimating there!

Why is it called a surplus though? Why can't we call it "the overtaxed amount"? Sure, you could say, "It's everyone's surplus!". Yeah, but it depends what it's spent on. And I think a lot of you can agree that this is the problem.

The Alberta government is raking in the dough, not just from oil revenues (which went down from the previous year), but from income taxes, gambling, and other sin taxes. This is due to the enormous growth and immigration to "Wild Rose Country".

With more people, there's obviously more of a demand on health and other services.

About one billion bucks of that revenue though is from health care insurance premiums, which is a fancy name for "the tax to remind you that health care is actually not free". But as I've said before, these premiums hit lower-mid income single parents over 25 and families pretty hard, and for folks going back to school or training. Those who can't, get collection agencies after them which then hurts their credit (although no credit was really applied for and issued).

As they did with the seniors, now is the time to get rid of it. What's nutty is that you can't even claim it on your income tax, so you're being taxed on it as well.

Politicians are so out of touch with this because they don't see the monthly bill.

After that "health tax" is gone, then we should look at lowering provincial income taxes even further as well as building more schools and hospitals (which I guess they've started doing).

But Alberta roads aren't looking so good lately. Our infrastructure deficit is massive. The QEII main artery highway is in bad shape, not to mention a lack of a ring road around Calgary and Edmonton's being way behind.

But worst of all is the lack of a good highway to Ft. McMurray, where the revenue generated from fuels these surpluses. How about some payback Ed?

I sure miss those $400 Ralphbucks. Edbucks just doesn't sound right.

Poly Sci paper

A dear Liberal friend of mine is about to write a paper for a Poly Sci class. Here's the synopsis:

"Discuss the establishment of Canada's social 'safety net' in the middle
decades of the 20th century, and the pressures that have led to cutbacks in social programs in the last two decades."

Is it me or does this sound quite socialistic--"pressures" seem to tend to the left and "cutbacks in .. last two decades" just doesn't seem quite true, does it? Here's what I rambled together as a recommended conclusion; not sure if she'll use any of it:

"The establishment of Canada's social safety net in the 50's and more so in the 60's, while well intentioned, has created a Ponsi scenario, whereby future generations pay for the cost of the present and the past, thus causing the years of high deficits and high debt to pay for it all. This of course resulted in taxes of all kinds (income, CPP, EI, GST, etc.) being created and thus rising in the decades preceding it, plus massive interest payments on the debt which still currently make up the largest budget expense.

"This higher tax revenue coupled with cuts to these programs in the 90's resulted in large and continued budgetary surpluses. These governments, whether Liberal or Conservative, have used the resulting surpluses for new spending on small and large programs to satisfy various lobby groups and minorities, social transfers to provinces that demand more because they cannot get their own fiscal house in order, and to socially engineered tax rebates targetted to whichever voting block the governing party needs to attract in order to win a majority of seats in the next election.

"Essentially, over the decades, the federal government has setup itself to bribe voters with their own money to vote for them. Families, especially lower and middle class ones, now must have both parents working, one to pay for the essentials, and the other to pay for the taxes, which of course increases production and our domestic product for a more vibrant economy, but it also increases the amount of income tax the government actually takes in. So not only are we being bribed with our own money, but parents have been inslaved in the economy, by working more overtime, taking less holidays, which results in one or both parents not being at home enough to actually perform a proper parental role for the children. The resulting stress on the family is then a strain on the health care system and in providing a proper home for the children. It is no wonder why divorce rates have increased along with the higher tax regime on families and why the government then uses tax money that parents are trying to pay for to try and provide day care for children with working parents. This scenario is completely backwards and a drain on society and Canada's future as a whole.

"The social safety net was intentioned as a temporary measure to provide for those lower income and poor who slip through the cracks of the economy. It is now used to provide for the middle class as well, but the increase in their taxes has resulted in many not being able to get ahead, pay off debt, or save for the future. Individuals and families make cuts to their budget all the time to help pay for basic necessities. It is high time that governments started doing the same and return that money back to the individuals and families who earned it in the first place."

What are your thoughts?

And the results... D-

Okay, let's see if my list of "demands" were met. Then again, I already vote Conservative, so why continue to pander to me, right?

- Raise the personal exemption to $20,000 - really, can anyone earning below this amount afford to pay?

Was the personal exemption even raised at all? I really think there should be an automatic mechanism in place that at least matches inflation.

- Lower the bottom income tax rate from 15.5% to 10%

Nope. It's still 15.5%.

- Lower the middle income tax rate from (34%??) to 25%

If they never lower the bottom rate, they'll never lower the middle rate.

- Move the trigger income for the highest rate bracket to $150,000, not what $67,000 as it is now?

Nope.

- Lowered capital gains taxes (I have stocks)

Nope.

- Any debt payment interest savings go to tax cuts (which I hear is what's going to happen).

Um, hello? (tumbleweed passes by...)

So what DO we have for tax reduction?

• A new $2,000 child tax credit will provide up to $310 of tax relief for each child under 18.

  A new $550-million-per-year Working Income Tax Benefit that will provide up to $500 per year for individuals and $1,000 for families to reward and strengthen incentives to work.

  Increasing the age limit to 71 from 69 for registered retirement savings
  plans and registered pensions.

  Overall taxes for eligible pensioners will be reduced by allowing pension income splitting as promised in October when the government decided to tax income trusts.

  New resources to the Canada Revenue Agency to detect and close down tax
  avoidance through offshore tax havens.

The Conservatives have become social-engineers extraordinaire, but with a family focus, so I'm for that. But the libertarian in me wished there were more broad based tax reductions.

And not only are they family based social-engineers, but are doubling as vehicle engineers too. Check out the crazy tax incentive scheme for new vehicle purchases!

To begin with, new automobiles with a combined fuel consumption rating of 6.5 litres of fuel per 100 kilometres or less; and minivans, SUVs and light pickup trucks with a consumption rate of 8.3 litres per 100 kilometres, or less, will be eligible for the rebate.

The basic rebate amount will be $1,000, and an additional $500 will be added for each half-litre per 100-kilometre improvement in the combined fuel-efficiency rating of the vehicle below the threshold.

The rebate will max-out at $2,000, and vehicles purchased or leased March 20 and later will qualify.

Following are a list of the rebates for various vehicles (fuel efficiency rating in brackets):

Toyota Prius: $2,000 (4.1)
Honda Civic Hybrid: $2,000 (4.5)
Toyota Corolla: $1,000 (6.3)
Mini Cooper M6: $1,000 (6.5)
Ford Escape HEV 4x4: $2,000 (7.4)
Saturn Vue Hybrid: $1,000 (7.9)
Chevrolet Impala: $1,000 (12.3)

..

The budget also imposes a "green levy" on new gas-guzzling passenger vehicles, excluding trucks.

A charge of $1,000 will be levied on Canadians who purchase new vehicles with
fuel-efficiency ratings of between 13 and 14 litres per 100 kilometres. The levy
will increase by $1,000 for each full litre above the 13-litre benchmark, to a
maximum of $4,000.

This is a very progressive positive environmental incentive for auto buyers. It literally blows my mind how the auto industry hasn't produced more efficient big vehicles, when you know they can with the technology we have today. But let's see if this scheme actually works. Will buyers be aware of this incentive and will the auto industry adjust their engineering to follow suit?

Politically, this is a very saavy budget. Apparently, the big item was simply to "solve" the provincial fiscal imbalance (read: buy votes in Quebec). So now that's "solved", will the next budget solve the other fiscal imbalance. You know, the people who help buy the votes in Quebec -- i.e. middle class taxpayers.

You know, now that the Conservatives are addicted to tax incentives, I'm starting to think of another way to encourage people to work and boost the middle class.

Maybe the middle income tax rate should be lower than the bottom rate? But being that I wish the upper rate was more like it is in the U.S. at $200,000, this is a pipe dream.

Overall, there is nothing in this budget that does anything for a single income person trying to get ahead--not unless you get married and have kids and dance around or something. Hmmm.

Andrew Coyne sums up my feelings about this budget. Spin aside from fellow Conservatives: Dark Blue Tory and Noise From The Right, what's so "conservative" about this budget? I'd definitely say it looks more Liberal or very, very Red Tory.

This budget gets a "D-". Booooooooo!

Budget 2007

The 2007 federal budget is about to be announced in the House of Commons by Finance Minister Jim Flaherty, if not already underway.

Before I see what's in it, as a single earner middle class taxpayer, here's what I want, and I think these are feasible:

- Raise the personal exemption to $20,000 - really, can anyone earning below this amount afford to pay?
- Lower the bottom income tax rate from 15.5% to 10%
- Lower the middle income tax rate from (34%??) to 25%
- Move the trigger income for the highest rate bracket to $150,000, not what $67,000 as it is now?
- Lowered capital gains taxes (I have stocks)
- Any debt payment interest savings go to tax cuts (which I hear is what's going to happen).

The federal government takes in a huge amount of cake from taxpayers already and it needs to control its own spending BEFORE we should have to control ours on things like food, clothing, and shelter. People's income taxes dwarf the amount spent on these basic necessities and that tragedy all started occuring during the 90's under the Chretien/Martin Liberal government where over 70 taxes in some form or another were introduced or raised.

I love it when analysts, journalists, economists and pundits say, "lowering income taxes will COST the government $2.5 billion". "COST"? Um, but bowing down and taking those high rates up the shlocka is COSTING taxpayers and families first and my lengthy walk to trying to pay down my student loans or families paying down a mortgage or trying to save for their kids' education.

You simply have to ask if you are getting the value from the thousands of dollars you send to the federal government, which, by the way, collects the most taxes from you and delivers the fewest tangible services. Health care and education you ask? Well, that's provided and paid for by your province.

What if you had a few extra hundred dollars to spend, save, and invest each month?

The middle class is getting screwed and has been getting screwed for years as the government gets bigger. What do I mean by screwed? It's harder for us to become rich with an hourly rate job.

I'm all for lowered tuition and graduation incentives, but a lowered tuition will never happen as long as bloated bureaucracies and inefficiencies occur in our universities and colleges. Teachers will continue to get the shaft, not from government, but by crappy school boards and their unions. Nurses, doctors, and ultimately, patients themselves are screwed even when we pour more money down the funnel. Aboriginals have been getting screwed for a long time, as billions are given, but the end result never changes as the money is syphoned off.

The way to cut them off at the trough is to lower taxes first and have these organizations find ways to improve and deliver the goods before individuals and families are asked to.

I'm all for trickle down economics, but I think we need to boost the lower and middle income earners and give them a break and an opportunity to not just wait a couple years for the money to run through the economy and get to them.

Does anyone remember when current health minister, Tony Clement, ran for the Conservative leadership? I always liked his idea of the first $200,000 a person earns is income tax free. Wow, that would really give young graduates a head start in life. I'd have paid off my student loan and owned a house by now.

Or is giving money to the government to spend more important to you?