Showing posts with label income splitting. Show all posts
Showing posts with label income splitting. Show all posts

Tuesday, November 13, 2007

Flaherty's Tax Deception


The reason the Conservatives have a surplus is because income taxes remain high. The recent Flaherty roll back was only to the level that had existed under the Liberals.

Tax Fairness? Hardly. The rich continue to get tax breaks, the working poor face claw backs and the middle class pays more in taxes.

And other than the window dressing of rolling back the Conservative created GST (not eliminating it) not much tax relief came out of all the smoke and mirrors pre-election mini-budget.

Instead all that Flaherty did was dress up for Halloween as the Wizard of Oz.



The federal government's personal income tax cuts were relatively modest, and for the most part merely a rollback of the tax increases in his first budget, according to an analysis by a think-tank that was involved in preparing projections for Finance Minister Jim Flaherty's recent economic statement.

And those measures will only temporarily ease the personal income tax burden, and not by much, and won't keep that burden from rising in the future, says the analysis Wednesday Global Insight's chief economist Dale Orr, which warns that burden will rise in the years to come.

"Finance Minister Flaherty is fond of telling us that Canadians pay too much tax," it said, noting that last week's economic statement promised about $60-billion in tax relief over the next five years.

However, almost 60% of that is the goods and service tax reduction, a cut that Global Insight say will do little to boost the overall performance of the economy.

"Only 18% is in personal income tax reductions," the report said. "From almost any perspective, the personal reductions in the economic statement were very small, smaller than they could have been, and smaller than they should have been."

The economic statement, which was widely perceived as a pre-election mini-budget, reduced the lowest personal income tax rate to 15% from 15.5%, retroactive to January 1, 2007. It also increased the amount people could earn before being taxed, providing $10.9-billion in personal income tax relief over the 2006- 2013 period, with about about half of it this year and next.

"What the Finance Minister Flaherty didn't tell us is that the lowest marginal rate was 15% in 2005, and in 2006 until the Conservative government raised it to 15.5% in budget 2006, to help finance the first GST reduction," Orr said, adding that the rollback of the earlier Tory tax hike accounted for almost 80% of the total personal income tax relief .

"Thus, this personal income tax 'relief' is relief only because the Conservative government took it away in their budget 2006, to have it restored again in the November, 2007 economic statement."

And the amount of "relief" is tiny relative to its impact on the personal income tax burden, which is measured as the proportion of personal income paid in personal income tax, and it's temporary, the analysis argues.

The rollback of the earlier tax hike reduces that burden slightly to 9.8% this year from 10.1%, but the tax burden will rise back to 10.1% next year as the projected increase in after-inflation earnings pushes more income into higher tax brackets, it said.

While tax brackets rise with inflation, any real or above-inflation increase in incomes, means more of that income is taxed at higher rates, Mr. Orr explained in an interview, adding that were it not for the re-indexing of the income tax system, which occurred under the former Liberal government, the tax burden would rise even faster.

"Roughly speaking, if personal income increases by five per cent, federal personal income tax collections will increase by about six per cent of $7-billion a year if the increase in personal incomes is evenly spread across the income distribution," it said. "Personal income tax collections ... are the proverbial 'cash cow'."

In fact, in recent years the faster growth in incomes at the upper-income level has resulted in personal income tax collections rising by closer to eight per cent for every five per cent increase in personal incomes, it said.

The analysis, for example, calculated that for every $100 increase in income an individual's income the government collects an extra $29 from an upper income tax-filer but just $15 from a low-income one.

The analysis was prepared for Global Insight clients which include governments of virtually all stripes and corporations, Mr. Orr said.

Canada's rich pay less in taxes than poor, report finds

OTTAWA — The era of tax cuts ushered in by federal and provincial governments in recent years have made Canada’s tax system so regressive that the country’s richest now pay the lowest rates of all income groups, says a report to be released Thursday.

The report by the Canadian Centre for Policy Alternatives, an advocacy research group that has pressed in the past for more social spending and bigger taxes on corporations and higher-income Canadians, looked at what percentage of income Canadians pay in taxes to all levels of government.

The study shows that Canada’s progressive tax system has become less so between 1990 and 2005, and for the richest Canadian families — those with annual earnings of $266,000 a year and more — the era of tax cuts since the turn of the century has been like manna from government.

Those very rich Canadians paid 30.5 % of their income in federal, provincial and municipal taxes in 2005, as opposed to the 30.7 % for those with incomes under $13,523, the lowest 10 % of family earnings.

That’s a big difference from 1990, when the top 1 % of earners paid 34.2 % of their incomes in taxes, as opposed to 25.5 % for families in the bottom 10 %.

“The tax system as gotten less progressive,” said the group’s senior economist Marc Lee.

“There’s something in the overall tax system now that most people would find offensive. The idea that someone who is in the upper middle class is paying a higher tax rate than someone much wealthier is not fair.”

In last week’s mini-budget, Finance Minister Jim Flaherty cut the GST as well as personal, corporate and other taxes by $60 billion over five years, declaring that “Canadians pay too much tax.”

In recent years, several provincial government have also cut taxes, but in many cities, property taxes and users fees have been rising as local governments try to cope with rising costs and service demands.

The highest taxed Canadian families are those earning between $120,000 and $151,000, who pay 36.9 % of their income in taxes. This group is followed closely both those earning $57,460 and $72,299 — whose tax bill represents 36.5 % of their total income.

Lee said his report is different from other such analyses in that he included all sources of income, including salaries, inheritances, employer provided benefits and capital gains. As well, the report calculates all taxes, including property and corporate taxes and user fees charged by governments.

He said he chose the 1990 to 2005 timeline because the last time a similar methodology was used to analyze the Canadian tax system was in 1988, and because the 15 years covers a time of government deficit cutting and tax hikes, followed by several years of tax cuts.

The main finding is that on average, tax rates dropped by 2 % between 1990 and 2005 as both federal and provincial governments undid the tax increases of the 1990s with deeper and broader reductions.

But the relief wasn’t spread equally. Those in the top 1% of earners actually saw their tax bill drop by about 4%, whereas those at the very bottom saw the take rise by 5%.

Lee said although the lowest income earners generally pay no or very little income tax, they do pay a disproportionately high amount in relation to their income in sales taxes, property taxes and other government revenue generators, such as gaming and liquor sales.

Tax cuts by provinces was the main impetus behind the flattening of the system, says Lee, although federal cuts, such as the elimination of the 5% high income surcharge after 2001 also reduced progressivity.

Provincial taxes are less progressive than federal levies because of their greater reliance on sales tax and fees for such things as driver’s licences. As well, provinces generally have flatter provincial income tax rates.

“Provincial income tax cuts are the major culprit behind Canada’s eroding tax fairness, an important consideration given allegations by the provinces of a fiscal imbalance in Canadian federalism,” the report finds.

Upper-income earners benefited from a 2001 federal decision to eliminate the 5 per cent "high-income surtax" and from preferential treatment of capital gains from the sale of stock market shares and real estate.

The affluent were also better able to take advantage of increased allowable tax deductions for RRSPs, Lee said.

At the other end of the scale, low-income earners saw their tax rates accelerate as a result of increases in payroll, consumption and property taxes, as well as user fees.

The analysis concludes that there is scope for raising income taxes at the top of the income ladder to make the system fairer.

"Such changes would help to ensure those who can afford to contribute more for public goods and services valued by all Canadians can do so," the study says.


Tax cuts won't buy a cup of coffee
Analyst says savings for low-income earners are, at most, 39¢ a day

Unveiling tax goodies on mini-budget night, a beaming Finance Minister Jim Flaherty declared to a national audience that "these tax cuts will move some 385,000 people off the income tax rolls altogether."

Sound good?

It should. This kind of thing has been a staple of federal budgets for many a year.

But analysts scoff at this supposed manifestation of a government's goodwill toward Canadians at the bottom of the financial scale.

In fact, there's widespread agreement the tax changes introduced by Flaherty do little to improve the lot of low-income earners.

"Don't get sucked in by that," says TD Bank chief economist Don Drummond when asked about Flaherty's claim 385,000 people won't pay federal tax as a result of the Oct. 30 mini-budget. "Most of those people were paying $5 or $10."

He said he completely agrees with the idea that someone earning under about $14,000 should not be taxable. "But just bear in mind the amount of taxes they are paying. It's not a very meaningful statistic."

The main lever used in Flaherty's mini-budget to ease the tax burden on low-income Canadians was raising the basic personal amount that can be earned without paying federal taxes to $9,600 – an increase of $671.

The people supposedly removed from the tax rolls, then, are those whose taxable earnings would have been slightly higher than the old threshold of $8,929.

"There are people who would be just barely above the amount of the non-refundable credit, so, in effect, you put them in a zero tax position," says Hugh Mackenzie, a research associate with the Ottawa-based Canadian Centre for Policy Alternatives. "They're not eliminated from the tax rolls. The position that they find themselves in is that when they go through the tax calculation, they find at the end of it they don't owe anything.

"It's not as if these people are exempted forever from paying tax," Mackenzie added. "As inflation goes on and economic circumstances change, you could have a very similar income and find yourself taxable again."

In his mini-budget, Flaherty also said he is helping taxpayers by dropping the lowest personal income tax rate to 15 per cent from 15.5 per cent. This helps all taxpayers but is proportionately more helpful to those with low incomes.

But Flaherty's budget measures still aren't great news.

Cutting the lowest tax rate will return about $1.3 billion a year to taxpayers, notes Drummond. "When you've got 20 million paying taxes, $1.3 billion doesn't go very far."

However, he says, the Harper government decided to spend the money it had for tax cuts on reducing the GST another percentage point to 5 per cent.

With a GST cut, "there's no incentive to work, save and invest. In fact, if it gives any incentive, the incentive is only to spend more and consumption is not one thing the Canadian economy is short of by any means," Drummond said.

As a result, Flaherty's income tax moves do little for Canadians with the smallest earnings packets, economic analysts say.

First of all, it's universally noted the reduction in the lowest income tax rate to 15 per cent only reverses a tax increase brought in by Flaherty in his 2006 budget. Taxpayers are getting a benefit they would have received anyway had he not raised income taxes last year.

It's a similar situation with the increase in the basic personal amount to $9,600. Flaherty is only moving forward increases in that tax break put in place by the Liberals in 2005.

Taken together, the Oct. 30 measures will provide only very modest help for low-income earners.

The CCPA's Mackenzie estimates the mini-budget changes will result in a maximum income tax reduction for individuals of $242 in 2007, $187 in 2008 and $144 in 2009.

For a single parent, the maximum reduction is $298 in 2007, $184 in 2008 and $94 in 2009, he said.

And those savings will be less for anyone with an income below about $38,000 a year, Mackenzie said. So, as a result of the way taxes are calculated, Flaherty's income tax changes will amount to a gain of at most 39 cents a day for a single individual and 25 cents a day for a single parent, he estimates.

It marginally helps people with very small incomes, says Rob Rainer, executive director of the National Anti-Poverty Organization.

"But we're not going to see any major, substantive visual evidence on the streets, so to speak, of people really having their financial fortunes reversed by this," Rainer said.

Analysts and anti-poverty advocates agree that Canadians must go way beyond tax cuts if they are going to use government fiscal measures to effectively reduce poverty.

Reducing taxes for those at the low end of the income ladder only helps if governments refrain from cancelling out any benefits by clawing back income supports and social assistance as taxpayers' incomes begin to rise above the subsistence level, economists stress.

These clawbacks, designed to keep support programs from becoming too expensive, act as a disincentive for low-income workers to extend their hours or upgrade skills because the reduction in social benefits, combined with rising tax rates, leave them with less money. As a result, what economists call their marginal effective tax rate can reach the same level or higher than top income earners.

"You really have to get the effective rates on low-income people down," says Dale Orr, an economist with Global Insight. "Some of these people are subject to very high effective marginal rates because they lose tax credits and subsidies and things. So we really have to do something better for them."

The federal Conservatives have taken a step in this direction, introducing the Working Income Tax Benefit, a $550-million-a-year program designed to help eliminate some disincentives for low-income earners. However, critics say it needs to be expanded to be of maximum value to working families.


Federal government shows no interest in making Canada better
Lana Payne
The Telegram

Before kids even go to school, we expect them to connect the dots.
My daughter has been doing it for years and she’s only 6. When she’s finished connecting the dots, she is left with a clear picture that she then colours a multitude of shades and hues.
You soon learn, though, that children are very good at connecting other kinds of dots. At Thanksgiving, like most kids in the city, she was asked to bring items to school for the food bank. We talked to her about food banks and explained that not everyone had enough money to buy food, pay bills and buy clothes for their kids. And that food banks help, but they are not the answer.
This must have stayed on her mind, as a few days later she asked, out of the blue, if we had food banks because “rich people didn’t share enough.”
Canada’s not-so-new prime minister and his blustery finance minister are counting on us having forgotten to connect the dots.
They certainly don’t want us questioning their tax-cut agenda and the damage it is causing and will continue to have on the country’s social fabric.
They most certainly do not want Canadians contemplating this failed and flawed public policy.
Because if Canadians start connecting the dots, they may discover that despite tens and tens and tens of billions of dollars in tax cuts, they are still not feeling that financially secure.
Despite a 30-year unemployment low, despite more than a decade of government surpluses and despite unprecedented economic growth, Canadians are a worried lot — at least according to polling by the Canadian Centre of Policy Alternatives.
It may have something to do with all the debt families are carrying and a lack of household savings. Or it may be because real wages, excluding inflation, have not increased since the recession year of 1981-82.

Not shared
It’s no wonder Canadians are feeling a little shaky. After all, the country is generating more wealth than ever before, they see politicians giving away billions, but it isn’t filtering down to them.
And despite this failed and unimaginative economic policy of tax cutting, the federal Conservatives persist with the finance minister announcing at the end of October another $60 billion in tax cuts — almost 25 per cent going to corporations.
This is what Canadians do know and what Stephen Harper ought to fear.
They know how expensive it is to send their big kids to university or college because taxes haven’t been used to reduce the cost of post-secondary education.
They know that only the lucky and the fortunate can access affordable child care and early learning programs for their smaller kids. They know that tax cuts won’t repair mould-infested schools. They know tax cuts won’t build bridges or pave roads. Nor will they build hospitals, buy cancer-treatment equipment or pay home-care workers a decent wage. Tax cuts do nothing for homeless people, except keep them homeless.
And tax cuts for corporations do even less, except feather a few already cushy nests.
Canadians know that the last thing hugely profitable corporations need is more of their hard-earned cash. Yet the Harper Conservatives have done just that, handing over another $14.8 billion in corporate tax cuts, including to obscenely rich oil and gas multinationals.
It’s no wonder a study last week by the Centre for Policy Alternatives discovered that Canada’s tax system is becoming less and less progressive. According to the report, by economist Marc Lee, the richest one per cent of families pay a lower percentage of their income to governments than the poorest.
Lee’s conclusion was that Canada’s tax system, after years of cuts, now fails a basic test of fairness.
And this was before the Conservatives’ latest round of tax cuts, which had many economists warning that Harper had slammed the door on any new major programs.
What a waste. This money could have made a real difference in the everyday lives of Canadians. An average $200-a-year individual tax cut won’t buy a coffee a day. But collectively, it could have done a lot of good.
That’s, of course, if you are interested in making that difference in the first place.

Government doesn’t care
What is becoming increasingly clear is that Canada’s slightly used Conservative government has no interest in that. They are much too busy managing the public relations of a war, shutting out the media and playing politics.
And while they play politics — fencing with each other over who is the sharpest politician in the lot — another child’s sense of wonder is dimmed by poverty because government chose tax cuts over action.
And that is the whole problem. We have a federal government that doesn’t believe in government, and so most days are spent dismantling and diminishing government as a force of change.

The message to Canadians is: don’t look to Ottawa to be part of the solution.


Unfair burden on poor

EDITORIAL
TheStar.com


Whether taxes are high or low, they ought to be fair, with those with the greatest ability to pay contributing a larger percentage of their income than those with less ability to pay. Such a progressive tax structure has long been a core Canadian value – at least in principle.

But the reality of our current tax system tells a far different story.

In 2005, the richest Canadians actually paid a smaller share of their income in taxes than those who earned the least. In a country that prides itself on fairness, all levels of government took a combined 30.7 per cent of income in taxes and fees from those with incomes under roughly $13,500, but only 30.5 per cent from the top 1 per cent of Canadians, those with incomes of more than $265,800 a year.

In the broad middle between the poorest and the richest, the tax system was mildly progressive, which means that the very richest Canadians paid a lower overall tax rate than any other group.

These findings come from a new study by the Canadian Centre for Policy Alternatives, which looked at changing taxes from 1990 to 2005, a period when the rich were getting richer and the poor poorer. Astonishingly, it found tax cuts had exacerbated that trend.

During this period of big tax cuts, the overall tax rate for most Canadians fell 2 percentage points. For the wealthiest, the drop was 4 percentage points. But while others were getting tax breaks, the poorest Canadians saw their tax rate rise more than 5 percentage points.

By their very nature, some taxes are regressive, hitting the poor harder than the middle class and the rich. Property taxes are one such tax and while they took a diminishing share of everyone else's income over the period, for the very poor they took a rising share, increasing to 5.9 per cent in 2005 from 5.1 per cent in 1990.

Sales taxes, which are also regressive, had the same effect. Rising more slowly than income for most Canadians, they increased significantly relative to income for the two lowest-income groups.

But if that wasn't bad enough, cuts in progressive federal and provincial personal income taxes favoured those with higher incomes, particularly the rich, at the expense of the poor. To create greater fairness, Marc Lee, the study's author, suggests hiking taxes on the rich.

But taxing the rich would do nothing for the poor. It is far more important to tackle poverty head on, and raising incomes of the 10 per cent of Canadians who live on less than $13,500 a year.


See:

Flaherty's Smoke and Mirrors

Tax Cuts For All

Tax Cuts For The Rich Burden You and Me

Tax Fairness For The Rich



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Thursday, October 18, 2007

Tax Cuts For All

Instead of capital gains tax cuts (which only impact the rich) or further tax cuts for corporations how about eliminating income taxes (payroll taxes) for working Canadians and families who earn less than $100,000 a year.


Tax break not dead: Flaherty
The Harper government is examining how to make good on its pledge to grant Canadians a capital gains tax break in the 2008 budget, says Finance Minister Jim Flaherty, who avoided the measure in the last two fiscal plans because of cost and design difficulties.

Mr. Dion's tax strategy, so far, is promising enough. He aims to cut the corporate rate to 18.5%, a rate that, however, coincides with the rate some corporate insiders have heard Conservative officials talk about. Is Mr. Dion scalping Tory policy?


While the average Canadian family earns far less than $100,000, those in professions and in trades earn above the average. Revenue Canada and Stats Canada define high income earners as having an income of over $113,000 annually.

An argument could be made for elimination of taxes at the $80,000 a year level, however due to geography this would have a negative impact on higher paid workers in the Arctic, Northwest Territories, Yukon, etc. where prices are also higher.

Also family incomes can be blended to reach $100,000. Whether we speak of eliminating income taxes for individuals at the $50,000 per annum income level or families at $100,000, I am open to debate on this issue. So far I have seen few who were willing to take me up on it right or left. Despite the tax tinkering being promoted by the Liberals and Conservatives.

Eliminating Income taxes on workers and working families would go a long way to eliminating the prosperity gap the NDP talks about. You will see from the statistical studies below that the income gap between rich and the working class grew, and that they benefited from reductions through tax cuts and tax credits, including the myth of how they pay more GST. In fact they don't since their monies are tied up in cars and homes and other consumer goods, but in stocks and investments, and in fact they pay less luxury tax than the average worker does when GST and PST are added up.

And while the stats show that income support payments from EI, welfare, AISH, etc. have a positive economic impact on the working poor, this would be better offset by a program that created a Guaranteed National Living Wage. Something the Green Party has joined the NDP in calling for though neither of them go far enough.

The Libertarian Party of Canada does advocate for the reduction of and maybe the elimination of income taxes. To be replaced by user fees to pay for the privatization of public services! While the CPCML adovcates Make The Rich Pay! which I agree with and in fact take a more libertarian position than the LPC or the so called fiscal libertarians in the Conservative Party!

During the last federal election, the Marxist-Leninist Party of Canada (MLPC) addressed the question of government revenue and taxation as follows:

"The Marxist-Leninist Party of Canada does not agree with the manner in which the issue of taxes is posed by the big parties and most media. Income taxes were introduced during World War I as a temporary measure and reflect an archaic viewpoint that owners of equity and debt are the centre of the economy, and Canadians and the state should serve the most powerful corporations."

Governments should keep their hands off personal incomes. Governments should fund program expenditures from their claim on the aggregate social product, not from that portion of social product the working people have managed to claim in the form of wages and salaries.

Who produces that wealth? The working people do. After the claims of the workers who produce the wealth have been distributed at their workplaces, the government should make its claim on the workplaces itself. It should appropriate directly from companies over a certain size enough social product to fund the costs of the social programs and infrastructure required for modern production in a modern society and a human and natural environment fit for human beings. A modern transportation and energy infrastructure for example are needed for modern production to take place in a society. Why then shouldn't those requirements be paid for from the aggregate social product of the society and appropriated directly at the point of production? Government revenue is a claim on the provincial social product. In its self-proclaimed drive to modernize, the Ontario government should stop the unacceptable practice of stealing the claims of working people on the social product and abolish the archaic income tax system, sales taxes and the myriad other taxes and service charges that takes money from the people. The claim (revenue) of the Ontario government should come directly from enterprises above a certain size that are engaged in producing social product or distributing, servicing and financing it.


The point is that no existing parliamentary party is talking about eliminating income taxes for the majority Canadians who now carry the burden of funding the government, which should be paid for by the Corporations and the rich since it's their state after all.


Income Inequality and Redistribution in Canada: 1976 to 2004

After remaining stable across the late 1970s and 1980s, family after-tax-income inequality rose during the 1990s. This increase occurred at the same time as a reduction in the generosity of several income transfer programs, including the Employment Insurance and Social Assistance Programs (in some provinces), and decreases in income tax rates. This potentially reflects a weakening of the redistributive role of the Canadian state.

However, while rising after-tax-income inequality can result from a weakening redistribution system, it can also result from rising inequality in family market (pre-tax, pre-transfer) income. In this report we address the following question: Is income redistribution playing a smaller equalizing role in recent years than it did in the past, or is increasing inequality being driven by rising familiy market-income inequality?

A close examination of after-tax income reveals that from 1989 to 2004, income fell for lower-income families but grew for middle- and higher-income families. Average income in the bottom 10% fell by 8% over this period, but rose by 8% at the median and by 24% in the top 10%. As a result, the absolute range between those with income in the bottom 10% and those in the top 10% also rose. In real dollars, after-tax income for a four-person family was stable at about $110,000 higher in the top decile compared to the bottom decile all through the 1976-to-1995 period, but grew thereafter, reaching $147,600 by 2004. This indicates that the increase in after-tax-income inequality is of significant absolute magnitude as well as relative magnitude.

Income polarization also rose over the 1990s. The share of Canadians with family after-tax income from 75% to 150% of the median after-tax income fell from 52.1% in 1989 to 47.3% in 2004, a drop of 4.8 percentage points. Closer inspection of the data reveals that the trend away from the middle class (defined by income) was both towards lower-income and higher-income persons. The share of persons with after-tax income below 75% of the median rose by 2.6 percentage points, while that share with income above 150% of the median rose by 2.0 percentage points.

The share of persons with adjusted income below one half of the 1979 level of adjusted family median income fell across the 1980s but rose in the 1990s, ending at 10.2% in 2004, which is slightly higher than it was in 1989.

There are several reasons to suspect that the role of the tax-transfer system in equalizing incomes may be different in the 2000s than in earlier decades. While the paper does not go in to these in great detail, we note that changes in social assistance and employment insurance eligibility and entitlement levels (these generally became more generous across the 1980s and then less across the 1990s), the introduction of new programs such as the Canada Child Tax Benefit and the Goods and Services Tax credit, as well as the maturation of the Canada Pension Plan and the Québec Pension Plan were important developments which may have affected the amount of income redistribution that is done through the transfer system. Moreover, increases in real tax rates across the 1980s, followed by their reduction in the 1990s, may have had implications for redistribution through the tax system.

This study shows that, after remaining stable for several decades, family after-tax-income inequality rose in the 1990s, settling at a higher level in the 2000s. At the same time, the share of middle-income families was reduced and the share of low- and high-income families grew larger. The absolute gap between bottom- and top-income families also increased in a substantive way, indicating that these increases in inequality have an important magnitude. These trends appear to have been driven by rising inequalities in income received from market sources (wages, salaries, self-employment income, private pensions and investment income) among families.

Perspectives on Labour and Income - September 2007

High-income Canadians

Brian Murphy, Paul Roberts and Michael Wolfson

Thresholds defined in nominal dollar terms are the
simplest. Absolute thresholds refer to a particular dollar
amount—for example, $100,000. Those with
incomes higher than a given figure are considered to
have high income.

Examples of commonly applied absolute nominal
thresholds include $250,000, the highest income
grouping used for many years by the Canada Revenue
Agency (CRA);2 $150,000, used in Statistics Canada’s
census tables; $100,000, used by the province of
Ontario in their ‘sunshine list’ made available under the
Public Sector Salary Disclosure Act (Campbell 1996); and
the threshold at which the top federal tax rate begins—
$113,804 in 2004.3

  • In 2004, 5% of Canadian taxfilers had an income of $89,000 or more; only 1% reached $181,000 or more.
  • In 2004, the top 5% of taxfilers received 25% of total income and paid 36% of income and payroll taxes.
  • The prevalence of high income peaks in the 45-to-64 age group. In 2004, individuals of that age represented less than a third of all income recipients, but made up more than half of the top 5%.
  • Calgary had the highest proportion of families with income over $250,000 in 2004, but Toronto had by far the most families with such incomes, almost one-third of the national total.
  • Of the 1.2 million taxfilers who made up the top 5% of income recipients in 2004, three-quarters were men, even though men accounted for less than half of all taxfilers. However, since 1982 there has been an 11% increase in the portion of women in the top 5% of tax filers.

Average income and net worth

In 1999, the average income for the bottom 80% of families was $38,000 while their average net worth was about five times higher at $192,000. The top 1% had average income of $366,000 and average net worth of $1.9 million, also roughly five times income. It follows that both the average income and average wealth of the top 1% are about 10 times that of the bottom 80%. The implication is that some lower-income families have relatively high net worth (for example the elderly) while some high-income families have relatively low net worth (the young).

Not surprisingly, the importance of housing and vehicular assets declines as income increases. While houses and cars accounted for 31% of average net worth for the 80% of families with the lowest incomes, they accounted for only 16% for the top 1%. These top income families had 61% of their net worth in financial assets compared with 37% for the bottom 80%. Pension assets are far more evenly distributed—21% of net worth for the top 1% of families, 32% for the bottom 80%.

The ratio of taxes to total income rises with income. In 2004, the bottom 95% of the taxfiler population received 75% of income and paid 64% of taxes, while the top 5% received 25% of income and paid 36% of taxes.11

A number of different tax rates can be examined. Nominal (statutory) tax rates are provided in legislation and are higher for higher incomes. The marginal tax rate applies to the last dollar of income. These rates are sensitive to the kind of income and the unit of analysis—individual or family. The effective tax rate (ETR) is simply the ratio of taxes paid to total income.

For the bottom 95%, ETRs generally increased through the 1980s, remained roughly constant at just over 15% throughout the 1990s, and declined at the turn of the millennium, remaining steady through 2004. More fluctuation was evident in the high-income population because of high-income surtaxes and numerous changes to top federal tax brackets. They had a more pronounced rise in the mid-to-late 1980s, declining more sharply in 1988 with the introduction of tax reform, which reduced 10 brackets to 3 and converted many deductions to tax credits.

Over 85% of the 5% of Canadians with the lowest incomes in 2004 paid no income or payroll taxes (Chart F). While some individuals may have no income taxes payable, Employment Insurance and Canada or Quebec Pension Plan contributions may still be payable.

The proportion paying no taxes drops sharply after the first vingtile but remains over 40% until the 35th percentile. It then drops quickly to below 1% approximately two-thirds of the way up the income distribution.

Chart F - The proportion of taxfilers paying zero taxes declined at almost all income levels

Some 5% of individual taxfilers had incomes of $89,000 or more in 2004. Regardless of the threshold used, incomes in the upper tail of the distribution as well as the share of total income increased substantially from 1992 to 2004. In contrast, individuals in the bottom 50% to 80% generally saw little improvement in constant dollar income.

Compared with the U.S., Canada had significantly fewer high-income recipients in 2004, and their incomes were considerably less. High-income Canadians increasingly receive more of their income from employment than from other sources.

Investment income has been a decreasing proportion, even among those with the highest incomes.


Income Instability of Lone Parents, Singles and Two-Parent Families in Canada, 1984 to 2004

This paper examines income instability of lone parents, singles and two-parent families in Canada in the past two decades using tax data. We attempt to answer the following questions: Has there been a widespread increase in earnings instability among lone parents (especially lone mothers) and unattached individuals over the past 20 years? How do the trends in earnings instability among lone parents and unattached individuals compare to the trends among the two-parent families? What is the role of government transfers and the progressive tax system in mitigating differences in earnings instability across different segments of the earnings distribution among the above-mentioned groups? We find little evidence of a widespread increase in earnings instability in the past two decades and show that government transfers play a particularly important role in reducing employment income instability of lone mothers and unattached individuals.

Similar to Morissette and Ostrovsky (2005), we find that earnings instability varies considerably with employment income and is much higher among families in the bottom tertile (one third of all families) than among families in the top tertile. The magnitude of these differences varies for different age groups and family categories; however, it is fair to say that for two-parent families the bottom–top earnings instability ratio is generally smaller mostly due to lower instability in the bottom tertile.

In all age groups, social assistance appears to be the single most important factor reducing income instability of lone mothers. For lone mothers, SA plays a much greater role in reducing income instability than for the two-parent families. In the youngest age group, for instance, it reduces instability in the bottom tertile by 32%. As social assistance has little effect on the lone mothers in the top tertile, this also results in the largest drop in the differences between bottom and top tertiles (23%). The impact of social assistance on instability is somewhat smaller for the 45-to-49 age group although it is still larger than the impact of any other factors.

Employment insurance also lowers income instability of lone mothers. In all age groups, it is the second most important factor mitigating instability among lone mothers in the bottom tertile. Overall, the reduction in instability (relative to market income) due to EI and SA in the bottom tertile varies between 32% and 48%.

The role of the progressive tax system has two different aspects. On the one hand, in all age groups, the instability of the after-tax income in the bottom tertile is lower than the instability of the total income although the reduction is 6% at most, and in some age groups it is close to zero. On the other hand, in some age groups the tax system has a larger effect in the top tertile, so the after-tax difference between bottom and top tertiles is actually larger for the after-tax income than for the before-tax income.

Personal debt — PDF

Personal consumption expenditure constitutes a larger share of GDP in the U.S.

Consumer spending is a key contributor to a country's economic health. Consumer spending as a percentage of GDP is much lower in Canada, ranging from 52.8% to 58.9% over the last 25 years, compared with 61.4% to 70.0% in the U.S. In other words, consumer spending has boosted the economy more in the U.S. than in Canada.

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Canadians pay more income taxes and transfers to government

Even though both countries have a progressive income tax system, their marginal tax rates, methods of taxation, and allowable deductions vary considerably. In Canada, a relatively larger share of personal income goes for federal and provincial income taxes, Canada or Quebec Pension Plan contributions, and Employment Insurance premiums (17.3% in 1980 and 23.4% in 2005). Americans, on the other hand, paid 18.3% and 18.7% of their income for federal and state income taxes, social security contributions, and unemployment insurance.1 The gap between total and disposable income has widened over time in Canada while remaining almost unchanged in the U.S. However, the mix of deductions in the U.S. has changed considerably: Income taxes accounted for 79.4% of deductions in 1980 compared with 57.7% in 2005..


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Both Canadians and Americans have increased their debt-to-income ratios

Credit can be used to meet regular or unexpected consumption needs, or even to acquire assets. Debt load, measured by the ratio of total debt to disposable income was almost the same for Canadians and Americans at the beginning of the 1980s. After that, they parted ways: Americans had the greater debt load between 1983 and 1991 and Canadians between 1992 and 2000. From 2001, debt grew steadily in both countries and by 2002 had surpassed disposable income. By 2005, for each dollar of disposable income, Canadians owed $1.16 and Americans $1.24.

Some of the increased indebtedness between 2001 and 2005 may be attributed to relatively low rates of interest, easy credit through home equity loans, and increased limits and incentives on credit cards issued by competing financial institutions.


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Canadians use more consumer credit for their personal spending

Between 1980 and 2005, consumer credit represented between 21 and 38 cents of each dollar of personal spending in Canada. In the U.S., the amount was between 19 and 27 cents. Since 1986, when the Reagan administration cancelled tax deductibility for interest paid on consumer loans, Americans have been using less of this kind of credit. Consequently, since 1988, the gap between the U.S. and Canada in the use of consumer credit has widened.

Non-homeowners in both countries, who have neither mortgage debt nor access to home-equity line of credit, can increase limits on their credit cards or use personal loans to finance unexpected needs or other budgetary shortfalls. http://www.statcan.ca/english/freepub/75-001-XIE/comm/11-5.gif


On a per-capita basis, consumption expenditure outpaced disposable income in both Canada and the U.S.

Over the 1980-to-2005 period, per capita consumption expenditure in Canada more than tripled from $6,870 to $23,560, while disposable income rose proportionally less—$8,390 to $24,400 (2.9 times). In the U.S., expenditures and disposable income rose more steeply—from CAN$8,770 to $37,980 (4.3 times) and from CAN$9,710 to $39,260 (4.0 times). The disparity between Canada and the U.S. in both per-capita spending and disposable income has increased and, as consumer spending has outgrown disposable income, both Canadians and Americans have had to finance their spending through credit.


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In both countries, total household debt outgrew consumer spending as well as disposable income

In terms of aggregates in their respective currencies, household debt rose in Canada from $134 billion in 1980 to $916 billion by 2005 (6.8 times), and in the U.S. from $1.3 trillion to 11.2 trillion (8.6 times). Even though inflation was almost the same in both countries, consumer spending and disposable income increased less in Canada. Consumer spending, for instance, rose from $168 billion to $760 billion in Canada and from $1.8 trillion to $8.7 trillion in the U.S.

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Young pensioners
Ted Wannell

  • Although public retirement pensions cannot be collected until one's seventh decade (age 60 for the Canada and Quebec Pension Plans, and 65 for Old Age Security), many private pension plans allow long-serving employees in their 50s to draw benefits. Tax data indicate that about one-fifth of workers begin collecting benefits from such plans before their 60th birthday.
  • The pension take-up rate is very low (less than 1%) from ages 50 to 54. It spikes at age 55 (5% for men and 4% for women) as many plans commence unreduced benefits at this milestone, given sufficient tenure. This peak is not surpassed until workers exit their 50s.
  • About half of young pensioners worked for pay the year after they began receiving their pension. However, much of that work was either part-time or intermittent since only 30% earned at least $5,000. Men were more likely than women to surpass the $5,000 benchmark (34% versus 26%).
  • The probability of non-trivial re-employment falls as the age at retirement increases. Those who retired at 50 were almost twice as likely as those retiring at 59 to earn at least $5,000 in the following year.
  • Very few young pensioners turn to self-employment as a significant source of income. Less than 1 in 10 earned some self-employment income, and 1 in 20 or less earned at least $5,000.
  • Early pensioners generally retired from high-paying jobs. Their average earnings in the year before retirement were about 50% greater than those who did not retire. Among women, the post-retirement income of young pensioners exceeded the income of those who remained in the workforce.
  • Young pensioners typically bring in about two-thirds of their pre-retirement income the year after they begin collecting their pension—very close to the 70% replacement rate recommended by many financial analysts. Pension income accounts for a greater proportion of the total income of women in this group (66% in 2004 compared with 61% for men).

The 2001 Census figures on income, released on Tuesday May 13, are telling us two very important stories. The first is that Canadian society is becoming increasingly polarized. The richest 10% of our population has seen its income grow by a whopping 14% while the bottom 10% has seen only a slight increase of less than 1%. Moreover the income of many working families has actually declined!

Overall, government transfers have decreased. Although Statistics Canada declined to reveal the dollar value of the decrease, they did provide analysis of the changing significance of government transfers to different income groups.

Among working age families, the proportion of total income represented by government transfers dropped over the decade, from 6.4% to 5.6%. This drop did not actually begin until after 1995, and it reversed a trend of growth in government transfers to working age Canadians which had been evident since 1980.

However, the proportion of income attributable to government transfers has increased throughout the 1990s for the 30% of families at the bottom end of the income distribution. The proportion of their income derived from government transfers increased from 58.4% to 62.2%. Transfers to the other 70% decreased over the decade.

The image “http://www.ccsd.ca/pr/2003/chart1.gif” cannot be displayed, because it contains errors.


Median total income, by family type, by province and territory
(All census families)

2001 2002 2003 2004 2005

All census families1

$
Median total income
Canada 53,500 55,000 56,000 58,100 60,600
Newfoundland and Labrador 41,400 43,200 44,800 46,100 47,600
Prince Edward Island 46,900 48,600 49,600 51,300 53,400
Nova Scotia 46,900 48,600 50,000 51,500 54,000
New Brunswick 45,200 46,800 48,000 49,700 51,500
Quebec 49,700 51,600 52,600 54,400 57,000
Ontario 58,400 59,600 60,500 62,500 64,500
Manitoba 49,800 51,200 52,100 54,100 56,100
Saskatchewan 48,900 50,500 51,500 53,500 56,300
Alberta 59,900 61,700 63,000 66,400 71,000
British Columbia 51,700 52,800 53,600 55,900 58,500
Yukon Territory 61,000 63,900 64,300 67,800 71,700
Northwest Territories 70,300 76,000 76,400 79,800 83,900
Nunavut 44,800 48,100 47,900 49,900 52,300

Table 7
Incidence of Low Income: Various Groups, Canada

Market Basket Measure 2000, 2001, 2002
and LICOs-IAT 2002

MBM-2000 MBM-2001 MBM-2002 LICOs-IAT 2002
All persons 14.8 13.6 13.7 11.6
Under 18 years of age 18.4 16.8 16.9 12.2
18-64 15.2 14.0 14.1 12.1
65 and over 5.8 5.5 5.6 7.6
Males 14.0 13.0 13.2 10.7
Under 18 years of age 18.2 16.9 17.7 12.7
18 to 64 13.9 12.9 13.0 11.0
65 and over 5.0 5.1 5.3 4.9
Females 15.6 14.2 14.1 12.4
Under 18 years of age 18.7 16.6 15.9 11.8
18 to 64 16.5 15.1 15.2 13.1
65 and over 6.5 5.8 5.9 9.7
All families 17.7 16.7 16.3 15.5
Economic families 2+ 12.0 10.8 11.2 8.6
Elderly families 4.7 3.9 4.5 2.9
Elderly married couples 2.5 2.8 3.1 1.9
Other elderly families 12.9 8.2 10.0 6.9
Non-elderly families 13.2 11.9 12.3 9.5
Married couples 9.7 8.7 9.0 7.1
Two-parent families with children 11.9 10.6 9.8 6.5
Married couples with other relatives 5.8 6.3 7.1 5.0
Lone-parent families 38.4 37.3 41.1 34.2
Male lone-parent families 18.6 17.8 21.8 12.2
Female lone-parent families 42.5 41.4 45.6 39.4
Other non-elderly families 13.2 9.8 12.0 10.8
Unattached individuals 29.5 28.7 26.5 29.5
Male 28.6 28.4 26.2 27.1
Female 30.4 29.1 26.7 32.0
All Elderly 12.0 11.6 10.0 19.4
Elderly Male 14.2 13.9 11.8 15.9
Elderly Female 11.2 10.7 9.4 20.7
All Non-Elderly 35.8 34.8 32.5 33.2
Non-Elderly Male 31.0 30.8 28.7 29.0
Non-Elderly Female 42.3 40.3 37.6 39.0

  • Two groups among the working age population - those commonly referred to as the "working poor" and five socio-demographic groups at disproportionate risk of persistent low income are featured in this report.
  • The risk of experiencing annual and persistent low income for "working" families (those where the Major Income Recipient (MIR) works 910 hours or more for pay annually) is much lower than for families with weaker attachment to paid work. However, "working poor" families still accounted for almost 30% of all working-age low income families in 2002 and for just over 40% of low income children living in such families in that year.
  • Regardless of the low income measure used, five socio-demographic groups have a disproportionate risk of persistent low income. Two out of the five high-risk groups - unattached individuals aged 45-64 and persons with work-limiting disabilities - significantly improved their incidence of low income between 2000 and 2002. Changes in the incidence of low income for the other three groups - lone parents with at least one child under 18, recent immigrants and Aboriginal Canadians living off-reserve during this period were not statistically significant.
  • Between 2000 and 2002, the Market Basket Measure identified a somewhat larger low income population than is calculated using Statistics Canada's post-income tax Low Income Cut-offs (LICOs-IAT).
  • This difference is more than accounted for by the more stringent definition of economic family disposable income which is compared to the MBM low
  • income thresholds. Several more items are deducted from gross income using the MBM than the LICOs-IAT.
  • These additional deductions from gross income are particularly important in increasing the incidence of low income for children (as deductions include out-of-pocket child care costs) and for working-age families with a strong attachment to paid work (as deductions include payroll taxes and other mandatory payroll deductions).
Taxation in Canada



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Wednesday, March 07, 2007

Making Good On Liberal Promises

Once again the Harper government makes good on Liberal promises.

During the announcement, the government also said it will spend $14 million on 775 projects for seniors under the New Horizons for Seniors Program, which was launched in 2004.

And none of the Seniors groups even mentioned Income Splitting as a priority!

CARP wants changes to the clawback on the Guaranteed Income Supplement, Cutler said.

Under current rules, Cutler said, if a senior receives any other income on top of the GIS, he or she loses 50 cents on each dollar from the supplement, which is aimed at very low-income seniors.

CARP doesn't want that rule to kick in for the first $5,000 of extra income a GIS recipient gets. That would encourage seniors to find part-time work, Cutler said.


See:

Pension Plans

Income Splitting

Pensions

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Wednesday, February 14, 2007

Income Trust Fraud

Dianne Urquhart speaking before the Commons Finance Committee investigating Income Trusts on Tuesday, January 30, 2007,in answer to a question from NDP member Judy Wasylycia-Leis said that indeed according to both Canadian Securities law as well as American securities law that there may have been unethical sales of Income Trusts to seniors based on false promises and could be investigated by the RCMP as fraud.

Judy Wasylycia-Leis was making the point that even with the change in taxation status the Trusts themselves operate in a fashion that current accounting practices would be considered illegal. A point neither the Liberals or Conservatives have bothered to deal with.

I support the income trust tax plan, with no increase in grandfathering beyond four years. I strongly urge that the income trust tax plan be enhanced by the addition of prescribed conditions to the Income Tax Act to stop income trusts from reporting deceptive, non-gap financial measures. Cash distribution must be defined as income distribution and return of capital distributions. The cash yield calculation should be restricted unless there is an equally prominent income yield calculation.

The federal government should not be giving tax incentives for an investment targeted to seniors where the product is an unsuitable investment based on the investment objective of secure retirement income and preservation of retirement capital. The high-risk design of income trusts and their deficient investor protection legal framework makes them unsuitable for seniors.

Making matters worse, the tax incentive is promoting the purchase of an investment where there is considerable malfeasance in the financial reporting and marketing material, which I'll speak about in a moment.

I have found that two out of three business income trusts pay distributions well in excess of their incomes. The average amount that the cash distributions are above income is 60%. The sources of the extra money are borrowed money, reserves from prior financing, and not retaining cash to replace plant, machinery, equipment, and software. This financial engineering, without proper transparency, is causing the return of capital to be capitalized as income. This is causing excessive pricing in the market.

In my research “Heads I Win, Tails You Lose”, I found that the business income trust market was trading at a premium of 55% relative to the TSX/S&P60, which comprises sixty of Canada's largest public corporations and a few income trusts. I also compared it to a sample of Canada's non-cyclical public corporations, which comprise the banks, the telcos, the utilities, and the power companies. On that basis, Canadian business income trusts were trading at a 55% premium. Even when I looked at the cashflow from operations, I found that income trusts were trading at a 40% premium. I believe the tax advantages in income trusts contributed 16% of the 55% premiums.

I conclude that the income trust tax plan with a four-year grandfathering period has a 10% negative impact on prices. My calculations differ from the calculations Mr. McKay asked about earlier with respect to what the investment losses have been since October 31 and the announcement of the plan. Business income trusts and energy income trusts, based on a roll-up of each of the individual trusts, are down 13%—up to about two to three days ago—for a loss of $23 billion.

On the basis of my detailed analysis of the tax advantages and the elimination of the premium associated with the tax advantages, it's my opinion that the income tax loss associated with the decision to introduce the income tax plan is $17 billion. This damage is a necessary consequence of a government closing a tax loophole that is not achieving benefits for the economy and is promoting the purchase of an investment by seniors for which this investment is unsuitable.

For a properly diversified portfolio with less than 20% invested in income trusts, the new tax damage is 2%. This is clearly capable of being absorbed by Canadians who invested in this security. Those who have higher losses than this have seen them occur as a result of improper diversification, or perhaps they have suffered the losses as a result of the malfeasance with respect to the improper marketing of income trusts to seniors.

I want to note that on May 3, 2006, the Canadian Accounting Standards Board said that the failure to distinguish clearly between returns on capital and returns of capital is inaccurate and potentially misleading, particularly when terms such as “yield” are used to describe the amount distributed.



Ms. Judy Wasylycia-Leis:
Thank you, Mr. Chairperson.

I just wanted to say that I didn't hear Dianne Urquhart condoning Enron. What I heard Dianne Urquhart saying was that we need to be vigilant at all times, and whenever there is the possibility of unethical practice or even criminal undertakings, we should be ready to crack down on it.

I want to ask Dianne, since I'm just getting up to date on this Prudential Securities issue, are you saying that what is common practice in Canada would be considered criminal in the more tightly regulated U.S. environment?

Mrs. Dianne Urquhart:
I would say that the RCMP and provincial and municipal police forces have the tools within section 380 of the Criminal Code today to call the deceptive cash yields...as has been said by the chairman of the Canadian Accounting Standards Board and by Paul Hayward, OSC senior legal counsel, who said in a tax journal in 2002 that an investigation could be conducted and fraud could be found. I'm not making that allegation specifically, but the wording concerns the Canadian Accounting Standards Board and Paul Hayward, OSC senior legal counsel. The actual criminal charges in the United States suggest that the misconduct of the limited partnerships of the eighties and early nineties was similar to that which has occurred in the Canadian income trust market, and it could be considered criminal in Canada upon investigation.

Ms. Judy Wasylycia-Leis:
Thank you.

I have one more question for Dianne Urquhart and then one for Mr. Teasdale.

Dianne, as you and others know, I have publicly stated that I support measures to shut down income trusts used as a way to avoid paying taxes, and I accept the statistics we've now had from a number of jurisdictions and a number of years, which are consistent with what you and others are saying.

My question to you, Dianne, is given the fact that the ways and means motion is likely to go through, based on the previous vote in Parliament.... And I've been working on this issue you've raised about the undervaluing—or overvaluing, sorry.

Ms. Judy Wasylycia-Leis:
No, it's clearly overvaluing.

It's a serious issue to change the Income Tax Act to deal with this. Is it still worth my while to do this, given the fact that, hopefully, we'll see over the grandparenting period the end of income trusts? Is it still important for consumers that we do it?

Mrs. Dianne Urquhart:
Yes, there is still $200 billion of current income trusts in the market, and 288 of the trusts are, I believe, in non-bifurcated markets--full transparency. I don't want those who know that their income trusts are overvalued having the opportunity to sell them to unsophisticated players. I believe we should have immediate requirements; the sooner we can get this into the Income Tax Act the better. The sooner we get transparency on the return on capital and the distributions, then we can have a market that's honest and not one in which sophisticated players dump trusts onto those who do believe the return on capital is there for their household expenses. It's just not there, because there is a limit on access to the amount of cash that's on the balance sheets and on the financial markets paying it.

A further hit on income trusts came when Seniors, those folks whom everyone in the income trust business says they speak for, spoke for themselves.

''The federal government should not be giving tax incentives for seniors to purchase an investment that is risky and does not have a proper investor protection regime in place,'' the National Pensioners and Senior Citizens Federations said in its brief to the committee. President Art Field noted that even before Flaherty announced the tax on trusts, the federation had passed a motion expressing concern seniors were being urged to invest money in what it called ''unsuitable'' and ''questionable'' income trust investments.


The Liberals who continued to opportunistically defend Income Trusts, as does Ralph Klein speaking of strange bedfellows, stated they of course would NOT have taxed Income Trusts...now they should have made that an election promise.


McCallum, meanwhile, defended the former Liberal government, noting it had moved to level the playing field between trusts and corporations, but by reducing the tax on corporate dividends rather than putting a tax on trusts. ''It's difficult to say what else we would have done had we stayed in government,'' McCallum added.

Well now we know what they would have, should have, could have done.

They issued their press release on the last day of the hearings, yesterday after Judy had issued her own private members bill, a bill that got NO attention from the MSM.

Despite the fact that neither the government nor the Liberals have addressed the real problem with Income Trusts that they are a Ponzi Scheme. An attempt to separate seniors from their pensions, since pensions are a vast untapped source of capital.

That is the elephant in the room,that the NDP has addressed in their private members bill.

“This NDP bill will bypass government inaction,” says Wasylycia-Leis.“We have a Finance Minister who claims he wants better securities regulation but continues to ignore this urgent problem. Meanwhile, our self-regulating investment system acknowledges there is a serious problem but has failed to produce an enforceable solution, and the industry continues to sell its products to unsophisticated investors using fuzzy numbers. This is unacceptable.”
See

Income Trusts

Pensions

Ponzi




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