The Trudeau Liberals 2016 Tax Plans

[PuckChaser]

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.

$1B a year sure seems like a lot of people would be using it, considering they're likely only paying $1125 tax on that extra $5k a year. In fact, if its costing us $1B a year, roughly 888,000 individuals are taking advantage of it (if they paid middle class tax). Which is a significant piece of the Canadian taxpaying population.

You've single-handedly destroyed your own argument with unsourced numbers on cost, while advocating we increase consumption taxes to stagnate spending in an already slow economy. I sincerely hope Trudeau doesn't have people like you as his finance advisors, because we're really $@#@ing screwed if so.

 

[jmt18325]

$1B a year sure seems like a lot of people would be using it, considering they're likely only paying $1125 tax on that extra $5k a year. In fact, if its costing us $1B a year, roughly 888,000 individuals are taking advantage of it (if they paid middle class tax). Which is a significant piece of the Canadian taxpaying population.

You've single-handedly destroyed your own argument with unsourced numbers on cost, while advocating we increase consumption taxes to stagnate spending in an already slow economy. I sincerely hope Trudeau doesn't have people like you as his finance advisors, because we're really $@#@ing screwed if so.

I was wrong with my revenue cost numbers.  That's over 5 years:

http://calgaryherald.com/news/politics/new-tfsa-limits-boon-for-savers-costly-for-governments

Actually, consumption tax increases coupled with income tax decreases is generally a positive thing.  I wish I could say I was proposing that, but I'm advocating the government returning revenue to say, 2007 levels. 

As it is right now, we can't fix our infrastructure deficit, we can't afford to fix DND, etc.  Those are both very expensive items.  Trudeau is proposing deficits.  I'm proposing the same level of spending on the same things with no deficit.  In the end, it costs us less money. 

 

[Good2Golf]

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

Better than citizens taking responsibility for their future and investing in the economy while benefiting from the increased effectiveness of compounding under a tax-free framework so they don't have to draw from significantly more contributors to the tax base?  ???

First-order savings will always be the most efficient.  Money is always subject to some amount of attrition when it moves...

 

[jmt18325]

Better than citizens taking responsibility for their future and investing in the economy while benefiting from the increased effectiveness of compounding under a tax-free framework so they don't have to draw from significantly more contributors to the tax base?  ???

First-order savings will always be the most efficient.  Money is always subject to some amount of attrition when it moves...

In a perfect world, I would agree with you.  We don't live there, unfortunately.

 

[PuckChaser]

Actually, consumption tax increases coupled with income tax decreases is generally a positive thing.  I wish I could say I was proposing that, but I'm advocating the government returning revenue to say, 2007 levels. 

No problem. We'll magically fix the global economy and jump oil back up to $110 USD a barrel with the Canadian dollar at or near par.

 

[Altair]

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.

I could max out a TFSA if I wanted to, I choose not to.

I also earn a decent amount thank you kindly.

I simply don't see how a measure that helps a few people that can use it to the fullest should be valued above a measure that helps the masses for who could really use the help to retire comfortably.

Call me a closet socialist if it makes you feel better. I'll continue to care about the poor in society rather than the top 10 percent who already live very comfortable lives and with measures like TSFAs at their disposal, will lead even more comfortable lives.

I hope the CPC continues to think and act  like you. Continue to act like they are all in for the 1 percent and the other 9 percent who aspire to be 1 percenters. Their will continue their time in the political wilderness when the rest of the great unwashed turn on them. :nod:

 

[George Wallace]

I could max out a TFSA if I wanted to, I choose not to.

I also earn a decent amount thank you kindly.

I simply don't see how a measure that helps a few people that can use it to the fullest should be valued above a measure that helps the masses for who could really use the help to retire comfortably.

Call me a closet socialist if it makes you feel better. I'll continue to care about the poor in society rather than the top 10 percent who already live very comfortable lives and with measures like TSFAs at their disposal, will lead even more comfortable lives.

I hope the CPC continues to think and act  like you. Continue to act like they are all in for the 1 percent and the other 9 percent who aspire to be 1 percenters. Their will continue their time in the political wilderness when the rest of the great unwashed turn on them. :nod:

Complete garbage.  However, trying to convince you two selfish Socialists that just because you can't do something, no one else should either is not a good option, is getting tiring. 

 

[George Wallace]

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

???

Now you want me to save my money to better ensure a future, but you want to reduce the ways that I can effectively do so. 

Which way do you want it?  You can't have it both ways.

(Or perhaps you are making a Socialist comment that I work hard to save to ensure your and many others futures.  Sorry; I prefer the Capitalist way of working hard to improve my lot, not the lot of someone who does not work to improve their position in life. )

 

[Bird_Gunner45]

Is there any chance of this turning into a rational conversation, or is it just going to carry on as a "socialist -facist" yelling match.

TFSA's are a good tool for saving money and be it a max of $5000 or $10,000 ought to be an investment option for people.

The top 1% of wage earners ($190,000-ish) could save a total of around $4000 if they invested the full $10,000. That said, over 40% of taxpayers pay no income tax as they don't make enough, so really they save $5000-$10,000. Is that equity?

 

[Altair]

Is there any chance of this turning into a rational conversation, or is it just going to carry on as a "socialist -facist" yelling match.

TFSA's are a good tool for saving money and be it a max of $5000 or $10,000 ought to be an investment option for people.

The top 1% of wage earners ($190,000-ish) could save a total of around $4000 if they invested the full $10,000. That said, over 40% of taxpayers pay no income tax as they don't make enough, so really they save $5000-$10,000. Is that equity?

To your first point, seeing as how this is a military forum board, anyone who doesn't support the Conservative party or the idea that Justin Trudeau is on a mission to destroy Canada is branded a socialist, the answer is probably no. 

To your last point, 40 percent of Canadians don't pay income tax because they don't earn enough, but somehow have money to put 10 grand into a TFSA to save the full amount you alluded to. I love it. If only poor people stopped buying food and paying rent so that they could put their earnings into a TFSA

 

[Brad Sallows]

>a measure that helps the masses for who could really use the help to retire comfortably

No such measure exists, nor is one likely to.  CPP/OAS/GIS are designed to prevent austere poverty, not support comfortable retirement.

Maximum basic CPP monthly retirement payment for 2015 is $1,065.00 and basic OAS is $569.95, for an annual income of $19,619.40.

Basic OAS and GIS without CPP for a single person is $16,113.36 annually.  Depending on circumstances, limits kick in pretty quickly.

If you want to retire comfortably and don't have a government-backed DB pension, or one backed by a strong public or private union/employer fund, you need to save.  20% of your gross income is a widely recommended target.  If that squeezes your desired lifestyle, you need to choose between living more frugally now or more frugally later.  You need to deal with monetary inflation and with the fact that governments and government agencies are working very hard to keep their costs of borrowing low; combined, those two create a fairly hostile climate for returns on investment at present.

The only way to keep OAS/GIS payouts low is to allow people to save, and to create an environment in which the returns on saving are obvious and reasonable.  The current mania with low interest rates achieves exactly the opposite: it penalizes saving, and encourages debt-fueled spending.  There is no worry about paying lots of money out in future for OAS/GIS, because public finances won't support it.  There are too many other stakeholders with more political muscle in line to receive their funding first.

You might easily survive 25 to 35 years after retirement.  That is a long stretch of time to subsist on the equivalent of whatever $18-30K buys right now.  Do not assume the smaller upcoming generations or waves of new immigrants will submit to whatever yoke you believe you can vote to harness them in.

 

[Jed]

>a measure that helps the masses for who could really use the help to retire comfortably

No such measure exists, nor is one likely to.  CPP/OAS/GIS are designed to prevent austere poverty, not support comfortable retirement.

Maximum basic CPP monthly retirement payment for 2015 is $1,065.00 and basic OAS is $569.95, for an annual income of $19,619.40.

Basic OAS and GIS without CPP for a single person is $16,113.36 annually.  Depending on circumstances, limits kick in pretty quickly.

If you want to retire comfortably and don't have a government-backed DB pension, or one backed by a strong public or private union/employer fund, you need to save.  20% of your gross income is a widely recommended target.  If that squeezes your desired lifestyle, you need to choose between living more frugally now or more frugally later.  You need to deal with monetary inflation and with the fact that governments and government agencies are working very hard to keep their costs of borrowing low; combined, those two create a fairly hostile climate for returns on investment at present.

The only way to keep OAS/GIS payouts low is to allow people to save, and to create an environment in which the returns on saving are obvious and reasonable.  The current mania with low interest rates achieves exactly the opposite: it penalizes saving, and encourages debt-fueled spending.  There is no worry about paying lots of money out in future for OAS/GIS, because public finances won't support it.  There are too many other stakeholders with more political muscle in line to receive their funding first.

You might easily survive 25 to 35 years after retirement.  That is a long stretch of time to subsist on the equivalent of whatever $18-30K buys right now.  Do not assume the smaller upcoming generations or waves of new immigrants will submit to whatever yoke you believe you can vote to harness them in.

But when you are young and you don't think you will live much past 50 who cares?

 

[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.

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.

Not perfect but the only way?  That is an understatement followed by an untruth.

By what you are proposing, a $1 income increase from $89,400 to $89,401 would see a $671 tax increase; income would have to rise to over $90,300 for an individual to break even on take-home pay.  That is not imperfect, that is a kick in the teeth.

As for being the "only way," I call baloney.  If you want a middle class tax cut, you don't just cut a middle class tax bracket.  If you want to make an "middle class tax cut" then you need to tinker with all the tax brackets (reduce the rates or delay with they kick-in at low ends  and raise or advance the kick-in of higher brackets) while looking at the impact on effective tax rate (and not just marginal tax rate).

As an experiment, plug this into your calculator.

• to $12k personal exemption
• $12k to $48k at 15%
• $48k  to $72k at 20%
• $72k  to $120k at 25%
• $120k  and up at 30%

It will not make proponents of flat tax happy, but it does achieve the effect that Trudeau promised - a tax cut in the middle and higher taxes up top (though not as high as he aimed).

 

[PuckChaser]

To be perfectly honest with you, I was trying to give the Liberals a hand in justifying a tax decrease that I find silly if it means I lose income splitting. I could care less what tax system we have, as long as I'm paying less, and still have the same benefits re: health care, cpp, ei that I have now.

 

[Altair]

To be perfectly honest with you, I was trying to give the Liberals a hand in justifying a tax decrease that I find silly if it means I lose income splitting. I could care less what tax system we have, as long as I'm paying less, and still have the same benefits re: health care, cpp, ei that I have now.

Ah, the core of the issue.

Important policy decisions must be made with the best interests of puckchaser in mind.

 

[PuckChaser]

Ah, the core of the issue.

Important policy decisions must be made with the best interests of puckchaser in mind.

As opposed to trashing TFSA limits because you choose not to use them? I consider myself the middle class working family that Mr. Trudeau tried to target. He failed.

 

[Altair]

As opposed to trashing TFSA limits because you choose not to use them? I consider myself the middle class working family that Mr. Trudeau tried to target. He failed.

Meh.

He helped me. 1 for 2.

 

[Bird_Gunner45]

To your first point, seeing as how this is a military forum board, anyone who doesn't support the Conservative party or the idea that Justin Trudeau is on a mission to destroy Canada is branded a socialist, the answer is probably no. 

To your last point, 40 percent of Canadians don't pay income tax because they don't earn enough, but somehow have money to put 10 grand into a TFSA to save the full amount you alluded to. I love it. If only poor people stopped buying food and paying rent so that they could put their earnings into a TFSA

I don't think you understood my point. I understand that they don't pay taxes because they don't make enough (or have enough tax credits). If the 40% that don't pay taxes but use the same services as me (paying $20,000 in income tax) than why should I, paying tax, not have some way to save money and lower my taxes if I choose? Why do people who pay no tax constantly want those paying to pay more?

I'm in favor of a flat rate as an actual fair means of taxation. Everyone uses the same services so why do only 60% pay? (Aside from earnings)

 

[Altair]

I don't think you understood my point. I understand that they don't pay taxes because they don't make enough (or have enough tax credits). If the 40% that don't pay taxes but use the same services as me (paying $20,000 in income tax) than why should I, paying tax, not have some way to save money and lower my taxes if I choose? Why do people who pay no tax constantly want those paying to pay more?

I'm in favor of a flat rate as an actual fair means of taxation. Everyone uses the same services so why do only 60% pay? (Aside from earnings)

Because it's disgusting that some people would need to chose between paying taxes and eating food.

 

[Flatliner]

Because it's disgusting that some people would need to chose between paying taxes and eating food.

The hardest part is determining where to draw the line between those who genuinely need and those who abuse.