The Trudeau Liberals 2016 Tax Plans

[Altair]

It's not the TFSA that I have a problem with - it's the doubling of the contribution limit.  I have a TFSA and I use it.  There's no way I, being squarely middle class, will ever contribute $10,000 a year (not that I think government should always benefit me, that's not my point).  That is true of over 90% of people.

The CPP is a pooled pension plan with assets.  Increasing the in and out there will go a long way to protecting the government from large payouts (transfers to individuals eat up double the amount of the federal budget that DND does) in the future as the population ages.  The TFSA also does that, but much less so.  I think a mixed approach is the best.  I'm in favour of having a moderately sized TFSA and a moderately sized CPP increase.

That makes the most sense, but at the end of day, people who could take full advantage of the TFSA system will be bitter that they can no longer do so.

The majority of canadians who cannot take full advantage of it do not figure into that calculation.

 

[jmt18325]

"The problem with socialism is that eventually you run out of other people's money [to spend]."[/color]

Of course, since I didn't say anything about spending anyone else's money.....

 

[PuckChaser]

Liberal logic: Canadians aren't saving enough for retirement, we're going to help Ontario make a new pension plan, but remove 50% of an ability for them to save their money not with the government.

The whole plan is "Save your money where we can spend it, you're not allowed to save it privately."

 

[Altair]

Liberal logic: Canadians aren't saving enough for retirement, we're going to help Ontario make a new pension plan, but remove 50% of an ability for them to save their money not with the government.

The whole plan is "Save your money where we can spend it, you're not allowed to save it privately."

Or...wait for it, the poor and a lot of the middle class could never afford to max out their TSFAs so in order to help those who couldn't, help expand the CPP that will help them more that TSFAs ever would, and for those who can still afford to pay into TSFAs leave it for them, just at levels people are more likely to max out

Maybe the liberals care about people who aren't maxing out their TFSAs every year.

 

[Brad Sallows]

The rate of return on your CPP contributions (not the fund's performance, which has no bearing on your entitlement) is supposedly in the range of 2-3%.  My private holdings seem to pretty much keep pace with the 7% average which is widely cited as the long-term average for moderate risk portfolios (ie. stock market performance).  At your death, a spouse can receive a small one-time payment, but nothing else goes into your estate.  Private holdings are yours to dispose of as you wish in your will.  As a forced savings plan, CPP is a sh!tty deal.

If the proposed CPP "expansion" can be implemented so that current retirees get nothing extra and so that all non-retired contributors get out something directly determined by their remaining "expanded" contributions, then it might be borderline acceptable.  But I suspect the intent is to jack the people who still have years ahead of paying in - and in particular to bend over the younger generations, because the ratio of contributors to recipients continues to decline - to provide increased benefits for those who did not see to their own needs.

Maybe someone can broker a deal in which tax shelters for people who can afford retirement savings go away, and every able-bodied person living off government grants loses the subsidy and gets by in the open market.

 

[Brad Sallows]

>Maybe the liberals care about people who aren't maxing out their TFSAs every year.

No, they just sh!t themselves every time they think about "lost" tax-sheltered income.  The Liberals care about political power.  They needed money to make their promises (which is why they eventually just gave up and embraced deficits); RRSPs have been around too long to be "touchable", but the recently applied TFSA limit change was new enough to not be a third rail.  I suspect when they ran the numbers the net effect of their shell game with all the policy changes was supposed to be a modest bump up in revenues, but that plan is not surviving contact with the "enemy" (economy, and those with sufficient resources to mitigate tax exposure).

The TFSA contribution limit has value beyond its annual amount.  Not using your annual limit immediately as it accrues does not mean losing use of it forever.  Middle-aged and laid off with a buyout package, but no prospects of re-employment because firms prefer to hire younger, cheaper workers?  If you have enough contribution space, maybe you can shelter some of your future proceeds from the nest egg after the tax man takes the big bite.  Been among the working poor for years, but received an inheritance?  Maybe you can dump a chunk of it into a TFSA right now and keep socking pieces of it away with each passing year to generate some additional and tax-free income and be less poor.

The TFSA is almost meaningless to wealthy people, and certainly to super-wealthy people.  But the contribution limit - and in particular, the accumulation of it - is (or could be) extremely helpful to middle class people (or perennially poor people who receive a windfall).

 

[PuckChaser]

Maybe the liberals care about people who aren't maxing out their TFSAs every year.

By creating another payroll tax that's going to squeeze small businesses? Sounds like a great way to get jobs.

Its also very easy for them to fix their "middle class" tax cut that helps out their buddies too. You get 20.5% on the middle bracket, unless your net income is over the $89,000 limit, in which case you still pay 22%. Voila, now it actually is helping the middle class, not people making between $100k-$199k a year. That wouldn't give all the Liberal MPs (and Tory and NDP) a tax cut though.

 

[Altair]

The rate of return on your CPP contributions (not the fund's performance, which has no bearing on your entitlement) is supposedly in the range of 2-3%.  My private holdings seem to pretty much keep pace with the 7% average which is widely cited as the long-term average for moderate risk portfolios (ie. stock market performance).  At your death, a spouse can receive a small one-time payment, but nothing else goes into your estate.  Private holdings are yours to dispose of as you wish in your will.  As a forced savings plan, CPP is a sh!tty deal.

If the proposed CPP "expansion" can be implemented so that current retirees get nothing extra and so that all non-retired contributors get out something directly determined by their remaining "expanded" contributions, then it might be borderline acceptable.  But I suspect the intent is to jack the people who still have years ahead of paying in - and in particular to bend over the younger generations, because the ratio of contributors to recipients continues to decline - to provide increased benefits for those who did not see to their own needs.

Maybe someone can broker a deal in which tax shelters for people who can afford retirement savings go away, and every able-bodied person living off government grants loses the subsidy and gets by in the open market.

like any politician is suicidal enough to piss of the elderly demographic voting bloc.

Listen, I get it. I have money put aside, investments, a decent job that pays for a decent standard of living.

The community I got out of have none of those things. Not a heck of a lot of opportunities. My parents are solidly in the lower class, and they worked hard to get there. They are a success story only in the sense that they got out of their native country, escaping drug wars, police corruption and death. They raised two kids by working every single day and in all likely hood won't be able to retire comfortably at all. My grandmother, who they sponsored to get to canada worked till she was 81 cleaning houses until she got sick and was actually considered disabled by the goverment.

This isn't to garner sympathy. I'm proud of my parents, who worked hard every single day to give me and my siblings a chance to succeed in Canada. It's just to say for those who have never been there or haven't been there recently . All this whining about limiting TSFAs, tax cuts for middle class, expanding the CPP. Does anyone take a minute to think about how this will help people who actually need help?

 

[McG]

Its also very easy for them to fix their "middle class" tax cut that helps out their buddies too. You get 20.5% on the middle bracket, unless your net income is over the $89,000 limit, in which case you still pay 22%. Voila, now it actually is helping the middle class, not people making between $100k-$199k a year. That wouldn't give all the Liberal MPs (and Tory and NDP) a tax cut though.

So, a progressive tax system is designed so that you pay more when you make more but you also take home more when you make more,
I can do the math if you need, but I am fairly confident that your proposal see people pay more and take home less when they get that small raise that brings them just across the $89k point.  That proposal is not a good or fair system, regardless of one's thoughts on progressive vs flat taxes.

 

[georgelunn]

Just like Harper, Justin Trudeau has advisers whose intentions are sinister. Cuban and Chinese moles. I would not mind being taxed with 40% (regular pay; 45% on overtime pay) as I was 7 years ago as long as I am assured of a hefty pension plan. But the problem nowadays is that some are denied their pensions. They 'are given false promises' that on 'this certain day' their pensions will be delivered. But still none. Accept it. The government is in a terrible deficit. These sinister advisers deliberately undo what was done to 'provoke' people whose intentions are good. i.e. an individual who used to moan (like having sex), "tax me, Belinda, harder, harder,, harder.(because Belinda is rich)." And since middle class high taxes deliver the goods, they undo them to sabotage the economy. Then they tax the rich. Man, it is unsustainable to impose a 50% capital gains tax every year. What if they incur losses the next year. Then they go bankrupt.  :rage: Evil is evil, good is good. How can evil be good. How can good be evil?

 

[The Bread Guy]

Cuban and Chinese moles.

Buh-BYE busconductor

Milnet.ca Staff

 

[PuckChaser]

So, a progressive tax system is designed so that you pay more when you make more but you also take home more when you make more,
I can do the math if you need, but I am fairly confident that your proposal see people pay more and take home less when they get that small raise that brings them just across the $89k point.  That proposal is not a good or fair system, regardless of one's thoughts on progressive vs flat taxes.

Not saying it's perfect, but it's the only way for the Liberals to spin this. I completely disagree with their new Richie Rich tax bracket that is just going to drive money out of the country, because those people can afford to do it.

 

[George Wallace]

Of course, since I didn't say anything about spending anyone else's money.....

Oh yes you, and Altair, did.  You are both telling us that just because YOU can not max out a TFSA, then none of us should be able to as well. 

Here is a video for you two to watch, to see that lowering the gap between the Rich and the Poor, by bringing the Rich down, does nothing but push the Poor even LOWER.

https://www.youtube.com/watch?v=okHGCz6xxiw

You two are nothing more than "Closet Socialists" who figure that the evil Rich must be brought to bear the brunt of paying taxes for your lack of income.  Don't you even clue into the fact that the more one earns, the higher the tax bracket they enter into?  The RICH are already paying more taxes than you.

 

[Bird_Gunner45]

So, a progressive tax system is designed so that you pay more when you make more but you also take home more when you make more,
I can do the math if you need, but I am fairly confident that your proposal see people pay more and take home less when they get that small raise that brings them just across the $89k point.  That proposal is not a good or fair system, regardless of one's thoughts on progressive vs flat taxes.

The only real fair system would be to have a flat rate for everyone. However, selling that idea to the public would be near impossible.

Say, for example, we all paid a 20% flat rate. A low class person making $20,000 wpuld pay $4000 while a high earner (say $100,000) would pay 20,000. Fair

 

[Brad Sallows]

>All this whining about limiting TSFAs, tax cuts for middle class, expanding the CPP. Does anyone take a minute to think about how this will help people who actually need help?

If you want to help low income people, you could raise the individual deductible, lower the lowest tax rate, lower sales tax rates, cut or restrain growth in payroll taxes (CPP, EI), promote employment by reducing regulatory red tape, free up more money for benefits by restraining new spending growth and cutting fringe programs, etc.  There is a party which talks about doing those things - and occasionally does them - but it is not the Liberals.

 

[jmt18325]

Oh yes you, and Altair, did.  You are both telling us that just because YOU can not max out a TFSA, then none of us should be able to as well. 

Here is a video for you two to watch, to see that lowering the gap between the Rich and the Poor, by bringing the Rich down, does nothing but push the Poor even LOWER.

https://www.youtube.com/watch?v=okHGCz6xxiw

You two are nothing more than "Closet Socialists" who figure that the evil Rich must be brought to bear the brunt of paying taxes for your lack of income.  Don't you even clue into the fact that the more one earns, the higher the tax bracket they enter into?  The RICH are already paying more taxes than you.

Im not sure where all the above came from, but as a closet socialist, on this topic, I'm most interested in not paying billions of extra dollars in taxes in the form of GIS transfers for people that didn't save enough money now about 20 years from now.

You're being very short sighted in this.  I don't expect you to agree.  You're too busy worrying about spending other people's money in a few years.

 

[George Wallace]

Im not sure where all the above came from, but as a closet socialist, on this topic, I'm most interested in not paying billions of extra dollars in taxes in the form of GIS transfers for people that didn't save enough money now about 20 years from now.

You're being very short sighted in this.  I don't expect you to agree.  You're too busy worrying about spending other people's money in a few years.

Whoosh right over your head again. 

It comes from you saying:

Of course, since I didn't say anything about spending anyone else's money.....

You are arguing that since you, and Altair, can not max out your TFSA, no one else should be able to.  Does your telling me what I can and can not do with my money not sound like a SOCIALIST attitude and affecting MY MONEY?  As for your having to pay "billions of extra dollars in the form of GIS transfers for people that didn't save enough money now about 20 years from now"; you are bringing it upon yourself when you agree with a policy to cut TFSA contributions and take away from people who are prudent enough to save.

READ AGAIN what Brad Sallows, PuckChaser, and others are saying and see the logic in what others are saying.  Bird_Gunner45 has proposed a Flat Tax.  I have provided links to John F. Kennedy's view on taxes and "building an economy, and thus the nation"; but I am still convinced you did not read or view any of those links; nor do you understand what Margaret Thatcher said about "Socialism".

 

[jmt18325]

You are arguing that since you, and Altair, can not max out your TFSA, no one else should be able to.

I'm arguing that since statistically, very few people max out their TFSAs, there are better ways to ensure our country's retirement future.
   

Does your telling me what I can and can not do with my money not sound like a SOCIALIST attitude and affecting MY MONEY?

Every government tells you what you can and can't do in various areas of your life to differing extents, so no.

As for your having to pay "billions of extra dollars in the form of GIS transfers for people that didn't save enough money now about 20 years from now"; you are bringing it upon yourself when you agree with a policy to cut TFSA contributions and take away from people who are prudent enough to save.

We already have many different savings vehicles, yet we're still going to have to pay GIS in the future.  Given Canadian's collective very low savings rate, there's only one way to lessen that.

READ AGAIN what Brad Sallows, PuckChaser, and others are saying and see the logic in what others are saying.  Bird_Gunner45 has proposed a Flat Tax.

A flat tax disproportionately affects people at the low end of the earning scale (not me).  I'm not in any way in favour of that.

I have provided links to John F. Kennedy's view on taxes and "building an economy, and thus the nation";

I would agree with him on that - that's why I'm very in favour of Trudeau's infrastructure program and would support a government meeting our defence obligations.

nor do you understand what Margaret Thatcher said about "Socialism".

I don't want to spend your money - I want you and everyone else to have to save it to better ensure our future.

 

[PuckChaser]

I'm arguing that since statistically, very few people max out their TFSAs, there are better ways to ensure our country's retirement future.

Why do we have to get rid of it then? If its not used too much, the cost for implementation is already paid for and its very easy to administer for CRA. If there are better ways, implement those. Reducing TFSA is a purely partisan political trick; its being removed and not replaced with something to help people save for retirement, therefore Canadians are at a net loss regardless of how you, or the Liberals try to spin it.

 

[jmt18325]

Why do we have to get rid of it then?

I don't want to get rid of it - I want to leave it at $5000 per year adjusted for inflation going forward, as originally promised.  I would argue that the increase to $10,000 was a partisan increase, costing in the range of $1B per year.

I'm also in favour of increasing the GST back to 7%.  It would, eliminated the Trudeau deficits while allowing Trudeau to keep his spending promises on infrastructure, first nations, and the RCN.