Well, all in all no one lost an eye and it's nice to see conservative principles go by the wayside so quickly. OK - if not principles then plans. The much lauded beer and popcorn money is now to be taxable income in the hands of the lesser earning person in a household. This benefits the very poor and the well-off unemployed who will not have enough personal income to hit the minimum income for being taxed. A two person working family gets much less as the lower income person gets taxed more. Sort of a clawback but still a very expensive and silly insistence that not using the existing child tax credit system and thereby creating a second bureaucracy is better. Not universal and not helping all those that need it.
What is really interesting is the way they worked around the bad idea to create good ideas that they never ran on. The capitulation to raising the lowest income tax level was reasonable. Someone gave Harper a talking to and he listened. He flipped and it was good because he did not have to also flop. I can live with 1/2% more tax for everyone to pay for all the little bits of social engineering tax breaks here and there. But the real prize is the $1,000 per year tax credit for employees for...stuff. We all buy stuff for work as employees and now get that recongnized:
Tax expert Tim Cestnick, a principal of the WaterStreet Group Inc. in Burlington, Ont., said the new credit is effectively just an increase in the basic personal credit, although it will apply only to people with employment income.Now, not to quibble, but I am not sure that is a tax "credit" so much as a deduction from income. You do not get the full amount credited against taxes. If it is a deduction from income you are merely saving the taxes not imposed on that part of your income. So it is the opposite of the beer and popcorn money in that the more you earn the more you will benefit. And creates another bureaucracy. But as you do not have to prove you have actual employment expenses by filing receipts, not as big a bureaucracy as there might be.In 2006, the credit would reduce every working individual's taxes by $38, and this will rise to $155 in 2007. Because the credit is indexed to inflation, that amount will increase slightly in future years.
To avoid multiple bureaucracies, all that needed to be done in increase the child tax credit and the personal exemption. Bingo, bongo we are in the Congo. Same effect as people expect pretty much and all that changes is the tax charts sent out to empoyers calculating the deductions that have to be made. But it would not be a "conservative" tax credit...just a cheaper more effective one.
Comments
SayNay? - May 3, 2006 9:54 am
Without looking at the merits of the clawback, on the "second bureaucracy" aspect of your post, Al, could you elaborate on this? I thought that the current info on file (or as updated by new parents)for the CTB would be used to send cheques from HRDC to qualifying parents, who would report this payment on their ITR to CCRA - same with the employee tax credit: again, simply claimed on the employee's ITR. Did the Conservatives set up some other department(s) to administer these payments?
Alan - May 3, 2006 9:57 am
Check the listings for offices within whatever Revenue Canada is called now. Every exepmtion or credit or line on your tax form has a policy division, an enforcement division as well as staff time to check that each new line is filled in right. Changing a rate on an existing line on the tax form does not do this. So not a new department but a new division within a department.
SayNay? - May 3, 2006 10:12 am
Somehow I don't see the Cons hiring new PS staff to administer these payments - maybe some additional training for existing staff...
Alan - May 3, 2006 2:17 pm
See - that is the trouble with blogging. "Somehow" is enough for you to found your expectation of how government works. Do you really think the PMO would drill down that far to find out if more people get hired in RevCan? Good Lord.
Alan - May 3, 2006 2:54 pm
Hey! Look:<blockquote class="smalltext">On July 1st duty on 100% Canadian wines will be eliminated and <b>the excise tax rate on beer brewed at Canadian micro-breweries will be reduced</b>.</blockquote>Woot!!! There it is in the budget.
SayNay? - May 3, 2006 3:04 pm
Excuuuuuse me...I guess to make it clear, and without lecturing: I do not see the Conservative President of the Treasury Board , the Hon. John Baird, directing his Deputy Minister to approve an increase in the staffing budget for HRDC or CCRA, as a result of the Conservative Government making these payments alone. I would suggest the Cons will direct these departments to make do with what they have.
Ya, Good Lord I needed to clarify that.
SayNay? - May 3, 2006 3:08 pm
I think that beer excise tax reduction was aimed specifically to get your vote, Al. The "Good Beer Blog tax reduction clause"....
David Janes - May 3, 2006 3:17 pm
Duty for who? Why would Canada import Canadian wines?
Flea - May 3, 2006 3:32 pm
"Why would Canada import Canadian wines?"
Damn it, they're on to me!!
Alan - May 3, 2006 5:18 pm
Remember, gentlefolk, it is Customs <b>and</b> Excise. Two different things. "Customs" is the entry taxation and "excise" is the Federal taxation at times other than the importing: cars, booze, backy mainly. Here is your homework on this topic.
David Janes - May 3, 2006 5:28 pm
"Duty": I do recognize the word "especially" is in there, though perhaps CTV could have chosen a different word.
The # of wines with 100% Canadian content is very very very very <span style="font-size: 8px">small</span>. Many VQA plonks are 90+ non-Canadian.
ry - May 3, 2006 9:30 pm
Sounds like the Candian Cons gave you what we call 'Progressive Taxation' down here in the lower half of North America. If so, and that's much more complicated than it's been in the past, I feel for 'ya Al. My wife got busted in the chops this year for her gov't awarded fellowship money---wound up owing $2500US. Tax systems suck.
Always around April 15th the idea of a flat 15% tax starts looking kinda nice, but after that I have to ask myself what I was drinking.
Alan - May 3, 2006 9:34 pm
College scholarships are now tax free here, ry. Don't know about fellowships. Having been though cancer, a quad by-pass and various other life saving matters we are quite content to pay for the services up here compared to our cousins to the south (no, my actual cousins) and the deductible game even well off seniors have to play.
ry - May 4, 2006 1:11 pm
Tout your 'universal health care' all you want Al. BUt just remember, by law, it's impossible to hold back said services here in the US. You may have collection agencies after you until you die, but you still get the care----and, if what some people say is true, faster.
I was the recipient of two jaw retraction surgeries(lower mandible) in much this fashion.
It's just that here in the US we don't believe in protecting your lifestyle at the expense of the other taxpayers(sorry Al, but popcorn and beer money is a lifestyle type thing. Wiping that out with any kind of tax, or ice time for Minors hockey(sad to think of those who trully play hard for the simple love of the game), isn't going to rob you of your apartment or the house you're looking to buy. It may make you live in a different neighborhood or eat less bbq pork(hmmm, bbq), but make you homeless or rob you of dignity or justice? I thinketh noteth, but then I'm an apostate Southerner).
Scholarships are non-taxable, but a fellowship isn't. We didn't know. Jess's father had her accountant do her taxes the first two years she was on it. I thought something was weird with how the accountant was doing it so I looked at it. If she ever gets audited Jess is going to owe MEGA for the two years she didn't pay any taxes on the fellowship, with all the fines and late fees.
It works for you, our Northern Cousins. Great. Happy for you guys. Everyone should get the gov't they deserve. Just don't try to make us be like you because we won't like it, and you'll hate us when we start bitchin' about it. Just, please, no punching in the face. ;)