Old age security reform

[August1991]

What...no "food stamps"? How barbaric!

Canada does not have a food stamp program. When I was young I was always confused by the references to food stamps in MAD magazine.

We have the Canada Assistance Plan, and the Canada Health Plan - as well as equalization.

b_c, for better or worse, we Canadians invented your food stamps. Johnson copied King, Diefenbaker and Pearson.

In Canada, we invented federal/provincial share schemes. (And you thought US senators invented this pork barrelling scheme!)

[August1991]

No, he raised the CPP rate from the 5% that the Liberals inherited in 1993 to 9.9% by 2003.

This has made CPP sustainable to at least 2075 based on very conservative investment returns (i.e. the CPPIB only needs to earn about 4% per year to ensure CPP is self-sustaining).

Only an accountant would claim that 9.9% is different from 10.0%!

More important, msj, is that the 10% "tax" is only imposed on the first $40,000 of income. Poor people pay this "tax", and rich people don't.

And make no mistake, msj, whether you're gay, conservative, left-handed, an accountant, leftist, liberal: the CPP/RRQ "contribution" is a payroll deduction and a "tax".

Rich people don't pay it, and neither do people who aren't working. The Liberal Paul Martin made poor working people pay this tax!

Amazing.

Edited January 28, 2012 by August1991

[bush_cheney2004]

..b_c, for better or worse, we Canadians invented your food stamps. Johnson copied King, Diefenbaker and Pearson.

If you mean that Canada invented the idea for large agricultural surpluses and poverty, I doubt that.

In Canada, we invented federal/provincial share schemes.

Nope...that honor probably goes to Australia (1933) according to wiki. Canada's dates to the 1940's according to this MLW entry:

http://www.mapleleafweb.com/features/equalization-program-canada-overview-and-contemporary-issues

[Evening Star]

And this is where I point out the hypocrisy and/or stupidity of the Harper government.

They brought in pension splitting for seniors.

As such, the guy with the Air Canada pension of $120,000/ year with the wife making $4,800 per year on CPP (split off from his CPP) saves $9,000 to $10,000 in taxes/OAS claw back per year (an extreme example but one in which does happen - I have more than a few clients who fit into this scenario).

To be clear, does "pension splitting" mean that this couple can in fact claim a pension of $62 400 each as opposed to $120k for the man and $4800 for his wife? And they thus end up saving on taxes because $60k is taxed (twice) at a lower rate than $120k would be? Just trying to understand.

[CPCFTW]

Its a lot of fun reading some of the comments here on this thread!

Automatically the conservatives take Harpers side stating that CPP can no longer sustain itself,if not now then maybe in 20 years.

I guess Harper has got one freekin kick ass awesome crystal ball to see what Canadas GDP will be in the future say 20 years to know for sure that our GDP will be incapable to compensate for our expenditures including CPP.

Personally if I had a kick ass crystal ball I would guess the numbers for the lotto max,maybe Harpers crystal ball only works for determining the gullability of his voters?

WWWTT

No one is talking about the CPP.

Does that include the Ontario HST and all the different services that are now subject to the provincial portion of the tax?

What about the municipal taxes climbing faster than inflation?And all the other new fees being levied by all levels of government?After all the government has become very creative in creating new fees that are not being labelled with the boogey-man word "Taxes"(development,liscensing,certificates,etc,etc)

Another flaw I found.Our wages/salaries are continuasly rising to keep up with inflation.We are all in higher tax brackets now as compared to 10 years ago.However our standard of living has not changed.In order to correct for inflation,the rate we pay must decrease.

Nice try but I am not brainwashed to always believe in smoke and mirrors!

WWWTT

The Liberals brought back indexation of the tax brackets over 10 years ago.

Oh, no, I'm sure we couldn't fool someone like you.

Haha keep digging WWWTT! :lol:

[msj]

Only an accountant would claim that 9.9% is different from 10.0%!

And only an innumerate would misunderstand the point. Martin raised CPP from 5% to 10%. You implied he raised it by 10% points.

That is an important distinction.

More important, msj, is that the 10% "tax" is only imposed on the first $40,000 of income. Poor people pay this "tax", and rich people don't.

It is imposed on the income one earns between $3,500 and $50,100 to be specific.

And make no mistake, msj, whether you're gay, conservative, left-handed, an accountant, leftist, liberal: the CPP/RRQ "contribution" is a payroll deduction and a "tax".

Rich people don't pay it, and neither do people who aren't working. The Liberal Paul Martin made poor working people pay this tax!

Amazing.

Rich people pay it as much as a poor person. It's just that they pay less of it as a percentage of their income.

Also, the "rich" don't have to pay into it since they may take advantage of other methods to avoid paying into CPP if they are so inclined.

Of course, if they don't pay into it then they don't get anything out of it either. BFD.

Edited January 28, 2012 by msj

[msj]

To be clear, does "pension splitting" mean that this couple can in fact claim a pension of $62 400 each as opposed to $120k for the man and $4800 for his wife? And they thus end up saving on taxes because $60k is taxed (twice) at a lower rate than $120k would be? Just trying to understand.

Pension splitting refers to splitting pension income as defined at line 115 of one's tax return (the most important distinctions here are that OAS and CPP are not reported at line 115, CPP can be split at source, OAS is never split, if you are 65 and draw money from your RRSP then it is not on line 115 therefore it can't be split but if you tell your bank to move that money into a RRIF and then take it out then you can split it with your spouse, etc).

So, the guy earns a $120,000 pension (defined benefit plan) from when he worked at Air Canada.

He earns a CPP pension of ~$9,600 (I can't remember the exact figure and it doesn't really matter if I'm out by $1,000 anyway).

So, he phoned up Services Canada (HRDC in the old days) and got them to split the CPP.

He and his wife each earn the OAS at $6,400 each (this is not split - they earn it for being good Canadian residents all their lives and it doesn't matter whether the wife every worked or paid a dime of tax in her life because she still gets it).

So, they each basically have the same income - $4,800 each from CPP, $6,400 from OAS, and $60,000 each from his pension.

Both pay a wee bit of OAS clawback but due to progressive tax brackets and a huge reduction in his OAS clawback they save $10,000 in taxes each year.

To be precise - using 2011 figures for a BC resident:

Without pension splitting (the Air Canada pension) - total tax bill (including BC, Federal, and OAS Clawback) - $40,449.72

With pension splitting - $30,041.28.

Tax/OAS clawback savings of $10,408.44.

But, hey, better for this couple to save $10,000 and have everybody wait to 67 to get the OAS, right?

[waldo]

no - at this stage I most certainly don't accept anything Conservatives are 'floating' on this. This simply strikes as opportunism and piecemeal. At the very least, given their track record, significant independent scrutiny on the Conservative numbers and estimates needs to be forthcoming. For something described as 2030 unsustainable, just how does a 2-year extension on OAS benefits make it... sustainable? Oh wait... you mean it's only a part of a concerted effort on several fronts? Really? What other fronts/avenues will make OAS sustainable by 2030... adding to the 'floated' 2-year eligibility extension suggestion? What other possibilities have been considered as an alternative to simply raising the benefit age?

I guess Harper has got one freekin kick ass awesome crystal ball to see what Canadas GDP will be in the future say 20 years to know for sure that our GDP will be incapable to compensate for our expenditures

yes, clearly...

Kevin Milligan - economist UofBC: argues that OAS is in no danger – he notes that it currently accounts for 2.41% of GDP and is only projected to rise to 3.14% by 2031

an OAS 0.73% projected rise to GDP by 2031... and yet Harper says OAS will be "unsustainable by 2030"... and all his lappers on this thread just automatically line up, lock-step!

[jacee]

Sometimes, people think the wrong thing. The reality is, we have a federal government that only spends $80B on programs. We can't afford pension transfers that cost more than that. We need to reign in spending and lower taxes at the federal level so that the provinces have room to raise taxes and carry out their obligations.

Just to be clear, though, we aren't talking about "pensions" (CPP),

but about OAS which is a universal benefit, the same amount for everybody.

We're also not talking about the GIS, a means tested supplement for low income seniors.

I see people here confusing them, no doubt too young to really care.

[msj]

yes, clearly...

an OAS 0.73% projected rise to GDP by 2031... and yet Harper says OAS will be "unsustainable by 2030"... and all his lappers on this thread just automatically line up, lock-step!

I agree that such amounts do not count as unsustainable.

However, .73% of our 2011 GDP is equal to almost $11 billion per year.

That's nothing to sneeze at.

I think this "gap" could easily be closed by ending pension splitting for seniors as I talk about above in post #82 above.

Or, alter pension splitting so that OAS is still clawed back but income tax savings are still realized.

That turns the $10,400 tax savings into about $4,000 in tax savings in the example I used above.

[msj]

Just to be clear, though, we aren't talking about "pensions" (CPP),

but about OAS which is a universal benefit, the same amount for everybody.

We're also not talking about the GIS, a means tested supplement for low income seniors.

I see people here confusing them, no doubt too young to really care.

OAS is clawed back 15 cents on the dollar as one's net income increases above about $68,000.

One also receives a lesser amount of OAS if one has resided in Canada for more than 10 years but less than, iirc, 40 (by the time they reach 65).

[WWWTT]

The Liberals brought back indexation of the tax brackets over 10 years ago.

Oh, no, I'm sure we couldn't fool someone like you.

Don't tell me,tell smallc!He's the one convinced we are paying less taxes by using a link that shows a bunch of percentages that mean very little!

Oh ya did you think I thought I forgot about the fact you have ignored about the other statements I made about municipal taxes,development,registration fees,etc,etc?

You ever watch "Enter the dragon"

Which one are you?Bruce Lee or the guy in the mirror?

Something tells me you like looking at yourself in the mirror!

WWWTT

[WWWTT]

It looks like you were so excited about someone trying to insult me you forgot to add something that contributes to this thread.

WWWTT

[WWWTT]

Haha keep digging WWWTT! :lol:

Here's another example of someone so excited that another is trying to insult me,he/she forgets to add something to their comment that adds to this thread.

WWWTT

[msj]

Don't tell me,tell smallc!He's the one convinced we are paying less taxes by using a link that shows a bunch of percentages that mean very little!

Oh ya did you think I thought I forgot about the fact you have ignored about the other statements I made about municipal taxes,development,registration fees,etc,etc?

WWWTT

The reason I have "ignored" that part is related to my use of the .

I am not going to waste my time with people who wear tin foil hats.

[waldo]

an OAS 0.73% projected rise to GDP by 2031... and yet Harper says OAS will be "unsustainable by 2030"...

I agree that such amounts do not count as unsustainable.

and yet, we need to hear about the radical restructuring via second-hand news coverage from Harper's speech in Davos? And then, when the reaction shyte hits the fan, we're suddenly bombarded with "OAS is unsustainable" from the PMO and Conservative minister's in scramble mode...

[msj]

It looks like you were so excited about someone trying to insult me you forgot to add something that contributes to this thread.

WWWTT

What's with the "trying" to insult bit?

I wasn't trying anything.

The "blink" emoticon was used as in "really, you don't remember the fanfare when the Liberals ended over a decade of inflation creep?"

The is also used seriously.

One cannot argue with another when it comes to making claims such as the one you have made.

I could put up reams of data to show that total revenue by all governments is down as a % of GDP but I know you will come back with some tin foil hat conclusion.

Hence the - there is no discussion with a personality.

That's not an insult - it's reality based on experience on these very forums.

[WWWTT]

The reason I have "ignored" that part is related to my use of the .

I am not going to waste my time with people who wear tin foil hats.

Actually I believe you ignored the other facts I have stated because you have never developed/rezoned any properties.Nor are you a contractor/service provider dependant upon municipal/provincial/federal regulations/standards,etc.Therefore you are unaware of how governments are making up new revenues.

Aswell you are ignorant of the fact that various levels of government are bending their asses half backwards to creat new fees/penalties that are not immediately deemed taxes!

Is a "tin-foil" hat the best you can do?

WWWTT

[fellowtraveller]

And this is where I point out the hypocrisy and/or stupidity of the Harper government.

They brought in pension splitting for seniors.

and this is where I point out that neither of us knows what reforms will actually be done by Harper.

OAS is comparable to the long ago 'baby bonus', where everybody with children got the same, fixed amount regradless of income.

It was replaced by the Child Tax Credit, where is not available to high income families. Simialr thing with the GST rebate program on consumer consumption items.

I expect that the income limits for clawback on OAS will be lowered , as well as the speculated increase in age for eligibility, which will likely take a decade or two to take effect fully.

Note that several countries in the developed world have already moved their age of retirement to 67.

We are not immune to the double whammy of living longer and the giant needy mass of boomers, at the same time.

Or we can take the path we have taken so far on health care, which is to pretend nothing is happening.

[CPCFTW]

Here's another example of someone so excited that another is trying to insult me,he/she forgets to add something to their comment that adds to this thread.

WWWTT

Sorry I don't have any lies and conspiracy theories to add to this thread for now. Besides, you're doing more than enough of that on your own!

[WWWTT]

What's with the "trying" to insult bit?

I wasn't trying anything.

The "blink" emoticon was used as in "really, you don't remember the fanfare when the Liberals ended over a decade of inflation creep?"

Then why did you make reference to myself in your statement?

WWWTT

[WWWTT]

Sorry I don't have any lies and conspiracy theories to add to this thread for now.

Did you ever?

WWWTT

[msj]

and this is where I point out that neither of us knows what reforms will actually be done by Harper.

OAS is comparable to the long ago 'baby bonus', where everybody with children got the same, fixed amount regradless of income.

It was replaced by the Child Tax Credit, where is not available to high income families. Simialr thing with the GST rebate program on consumer consumption items.

I expect that the income limits for clawback on OAS will be lowered , as well as the speculated increase in age for eligibility, which will likely take a decade or two to take effect fully.

The Liberals already brought in the OAS clawback in the 1990's. Or was it Mulroney who started it in the very late 80's? Can't remember.

What I do remember is that pension splitting came in in 2007 and it has drastically reduced the number of seniors subject to clawback.

You don't think that hasn't and won't have an effect on the pot of money used to shovel out OAS to everyone?

I would love to see some numbers come out of some economists' office - I bet dropping pension splitting alone would pay for the $11 billion per year number that I came up with above based on waldo's information.

[msj]

Then why did you make reference to myself in your statement?

WWWTT

Because you have a personality.

And I was responding directly to the words that you typed.

[WWWTT]

Because you have a personality.

And I was responding directly to the words that you typed.

Why all the insults buddy?

How does smoke and mirrors equate to paranoid behavoir and tinfoil hats?

WWWTT

Edited January 28, 2012 by WWWTT