On tax "increases"
Here's my take on the Federal Budget 2006, and the Liberal claims that my taxes were "raised".
The Liberals cut it to 15% only because they were going into an election... a regular Liberal promise. The Tories changed that change to 15.5%. This, for me, equals an "increase" of $200 over the course of the year. However, with the new $500 employment credit, and the GST reduction, and the regular increase of the Basic Personal Amount, I'm still going to see an overall tax savings, as the GST will be reduced on all of my bills, my non-food purchaces, my gas, etc.
I'm happy.
The Liberals cut it to 15% only because they were going into an election... a regular Liberal promise. The Tories changed that change to 15.5%. This, for me, equals an "increase" of $200 over the course of the year. However, with the new $500 employment credit, and the GST reduction, and the regular increase of the Basic Personal Amount, I'm still going to see an overall tax savings, as the GST will be reduced on all of my bills, my non-food purchaces, my gas, etc.
I'm happy.
posted by Christian Conservative @ 4:09 p.m.
8 Comments:
At Thu May 04, 06:36:00 p.m. EDT,
Anonymous said…
The Librals are trying to make this look like the less fortunate will be paying more taxes which they know to be an outright lie. Like you said the income tax reduction was a vote buying tactic by the Libs, along with most of the 3rd budget that was introduced in the fall.
I can't stand listening to the lies though, between the GST reduction and the increase in the basic personal amount the less fortuante are going to be paying less taxes then they did under the Liberals.
Also, lower income Canadians spend a higher percentage of their income on goods and services than higer income Canadians. So although they aren't going to be getting $3,000 off the purchase of a BMW, they are going to benefit more proportionally.
At Thu May 04, 07:06:00 p.m. EDT,
Blake Kennedy said…
Ryan:
Your last point is exactly correct, that the GST is a regressive tax and its reduction is a substantial step forward for Canadian society. We should of course be marching towards its elimination, but I find that all of this electioneering-style tax cuts (8,523,234 different tax cuts, all of which are negligible) has set that goal back substantially. Harper's budget plays to political favour more than good policy, but it is not without its bright spots.
That said, the increase of the LOWEST and not the highest marginal rate is just plain stupid. It's hurtful to the poorest Canadians and politically insane. Would anybody have complained if the top rate went up .5%? Nope, so why not raise that? That's just a dumb move that can very easily be used to torment the Conservatives. If I were the Liberals, I'd be beating that drum until the next election, and it's just an obvious response. Somebody was asleep at the wheel at that call, or just has no idea what it's like to be poor.
At Fri May 05, 01:00:00 a.m. EDT,
Anonymous said…
of course they don't know what it's like to be poor- they're conservatives.
i joke.
At Fri May 05, 08:51:00 a.m. EDT,
Blake Kennedy said…
I'm glad you're joking, anonymous, because I am under the poverty line and voted Conservative because of their promise to reduce the GST.
At Fri May 05, 09:15:00 a.m. EDT,
Anonymous said…
Blake,
I had no intention of actually offending anyone with that comment, so my apologies.
At Fri May 05, 09:54:00 a.m. EDT,
Blake Kennedy said…
No offense was ever taken. :) but thanks for clarifying regardless.
(I should have made some sort of comment that that joke did elicit a chuckle out of me. It is true, at times.)
At Fri May 05, 11:39:00 a.m. EDT,
Lord Kitchener's Own said…
Well, the $500 employment credit will take $77.50 off your tax bill (it's not a $500 DEDUCTION, it's a non-refundable "credit", so it's not a $500 deduction from what you owe, it's a $500 credit on what your taxable income is, and it's assessed at the lowest rate).
So, this leaves you with a 122.50 tax bill increase, meaning you will need to spend $12,250 on GST eligible products and services this year to eliminate that last 122.50 through the GST cut, which doesn't seem unreasonable (though I don't personally spend $1000 a month on top of food and rent, it's not outrageous by any means).
But as for the GST cut helping poor people, I don't know many poor people spending over a thousand dollars a month on items that are GST-eligible, so I doubt anyone below the poverty line will ever save as much as $120 a year from the GST cut. Maybe to someone at such a low income level that $120 a year is a big deal, but again, if you're below the poverty line, how are you spending $1000 a month on GST eligible items and still paying your rent and buying food? I have a pretty well paying job, and I don't think I'll spend enough on GST-eligible items every year to make more than $40 or $50 from that cut, at best.
That's the thing about this whole budget. It's a whole bunch of policy initiatives that won't really do much, but sound good, and aren't objectionable, and can be spun well. Telling a student he or she will get a $500 tax credit for textbooks is a great selling point, because most students assume that means their tax bill will be $500 less next year. Tell them that they'll only actually save $77.50 with that credit, and they'll still be glad to get the eighty bucks, but probably upset that you made them think they'd save $500.
90% of this budget is Liberal redux, and the other 10% is 5% meaningless things that are stupid, but not meaningful enough to be objectionable, and 5% really awful policy. Pretty boring actually. It's sleight of hand, but so is all of politics, so I can't get worked up about it anymore. Congratulations politicians! (of all stripes). I think I'm now as cynical as I can be.
At Fri May 05, 12:06:00 p.m. EDT,
Blake Kennedy said…
"Congratulations politicians! (of all stripes). I think I'm now as cynical as I can be."
Thank you. Somebody else said this, too.
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