Wednesday, January 28, 2009

Budget Insult To Taxpayer Intelligence...AGAIN!!!

By ArdeeL

What a farce this budget is. Flaherty taking credit for increases that were already there and items that had been promised before. Lets look at the claim of increasing the Basic Exemption from $9,600 to $10,320 - NO! this credit has already been established at $10,100 for 2009 and is in all published tax tables for 2009 as a cost of living adjustment. What the budget does is increase it by an extra $220 or 2.2%

What about the increase in the upper limitstes for the 15% and 22% tax brackets up by 7.5%? NO!!!. these upper limits were already established through the "NORMAL" cost of living increase of 2.5% to be $38,832 and $77,664 anyway. The added benefit is about $2,000 on each rate and the tax savings will be a maximum of about $140 until you exceed the $77,000 amount, i.e., $2,000 * 7% (22%-15%). On a weekly basis, this amounts to about $2.69.

The Age Credit will amount to $150 for those with incomes up to $33,000. At that point the lovely CLAWBACK of Age credit kicks in and will wipe it out at the $70,000 level.

Nothing in the budget for RRSP / RRIF or Trusts other than the item related to the 25% reduction in 2008 RRIF amounts.

What an insult to a taxpayers intelligence!!!!

Friday, January 23, 2009

Scrap the tax

Published: January 23, 2009 4:00 PM
Updated: January 23, 2009 5:44 PM

With increasing job and stock market losses and decreasing home values, Canada needs positive and sustainable economic changes. I’ll gladly accept the interest rate cut you’re going to hand out next week but can’t help but think of other measures that could be taken that would provide Canadians with economic benefits that are more sustainable.

It seems almost all ideas about how to best stimulate our economy have been focused around the creation of new monies.

We all know that it was artificially low interest rates, and therefore excess new money creation (read: inflation), were one of the main reasons we are in the economic mess in the first place.

Creating even more new money to solve the problem of excess money creation will only be a band aid fix at best. The cocaine addict feels better moving to heroin but still has to pay the ultimate price sometime, ie: it’s not a sustainable fix.

I feel very strongly that eliminating the proposed new tax on income trusts would go a long way towards sustainable and positive economic growth.

Aside from putting more money in the pockets of Canada’s largest demographic, allowing income trusts to operate as they did would allow the small to mid-sized companies that make up the majority of the income trust space to grow and create new jobs.

It is very tempting at this point to go over all the sketchy details surrounding the proposed income trust tax that don't make sense.

I won’t go into detail here but, these are just a few of the concerns:

BMO Capital Markets study showing income trusts create more than twice the tax revenues compared to corporations

Lost capital gains, increased capital losses and lost distributed income taxes not reported

Most of the 18 pages of the government document showing apparent tax leakage being blacked out even though the document was requested under the Freedom of Information Act

The misrepresentation that Stephen Harper gave in his campaign to not tax income trusts

Regardless of those facts and many others, the question becomes: what can we do here and now to stimulate our economy, while preferably not creating even more inflation?

Providing Canadian retirees and pre-retirees with a sustainable source of monthly income that is generated from Canadian companies, that in turn would create more jobs and therefore an economic circle that would allow Canadians to take care of Canadians makes nothing but sense.

On behalf of all our clients and all investors across Canada I implore you to eliminate the proposed ‘Tax Fairness Plan’.

Canada is still one of the best countries in the world but I’m sure many around the world have joined Canadians recently in scratching their heads over decisions made over the last few years with our income trust debacle, Alberta royalty taxes and proposed coalition government etc.

Dramatic changes can only happen under dramatic circumstances.

These are dramatic times and I therefore propose a challenge to all Canadians: Write your local MLA’s, write your party leaders as well as the Finance Minister and Prime Minister.

Income trusts should never have been taxed in the first place but, unless we the people do something about it by taking action, nothing will change.

Trevor J. Perepolkin