Liberal Tax Plan

[Bonam]

Your analogy would be appropriate if the gov't forgoes tax collection on the purchase of a car. Its not that you can contribute anything you want.....its that the gov't will highly benefit only the group who can do it......so sure drop in whatever you want but the tax benefit ends where all can contribute.

Uh... regardless of where the contribution limit is set, some can't/won't contribute the limit, or even anything at all. Are you arguing for no TFSA at all? What about other tax breaks? Not everyone can benefit fully from any given tax break.

Personally, I agree with this position. Get rid of any and all tax breaks, period (and lower general taxes so that this is "revenue neutral"). The tax code should be fully describable on one sheet of paper.

Of course, there's a whole lobby representing people in msj's line of work... so a simplified tax code isn't gonna happen. In fact, it will only continue to get more complex, so as to employ more lawyers and accountants in the fields of tax law, tax preparation, tax avoidance, etc. Given that reality, a tax break encouraging saving rather than spending is something I can wholeheartedly agree with.

[msj]

Of course, there's a whole lobby representing people in msj's line of work... so a simplified tax code isn't gonna happen. In fact, it will only continue to get more complex, so as to employ more lawyers and accountants in the fields of tax law, tax preparation, tax avoidance, etc. Given that reality, a tax break encouraging saving rather than spending is something I can wholeheartedly agree with.

I disagree that they represent us.

Many people actually believe it is right to use policy to level playing fields or to help groups of people.

I don't think many in my industry lobbied Jim F for RDSP's, for example.

Pretty sure he came up with that on his own to help the disabled.

Government often creates various tax breaks or increases taxes based on a number of factors, the most important being "will this get me a net vote at election time" hopefully, but not necessarily, followed by "can the treasury/economy afford this?"

[Argus]

That's the spin, yes. The thing is that having a stay-at-home parent is a luxury and privilege in itself - one that most Canadian families can't afford.

First of all, exempting the lower wage earners, who currently pay no income taxes anyway, the rest of population might or might not be able to afford this depending on their priorities. If you want big cars, holidays down south every winter, top flight stainless steel appliances, computers, new cell phone every couple of years, and generally waste your money, then no, you can't afford it. A friend was complaining how they're always broke. She'd just spent $600 to buy flowers, and didn't think there was anything odd about that. Her husband had just gone to Toronto to pick up a new motorcycle he'd just bought (n in his $80k pickup). It will be his third motorcycle. They have no savings whatsoever, no equity in their house, and huge credit card bills.

But if you make reasonable money, not tons, but a decent salary, and don't need new cars, holidays abroad, constant new gizmos, very expensive, top flight cable and internet and lots of new clothes (and flowers) then you can actually afford to have a non-working spouse and children. It's a choice made between what you consider important as a couple and as a family.

It's therefore little more than a tax-break for the top income earners.

And Trudeau's tax break which you enthusiastically endorse is also for top income earners, impacting only the top one third of earners.

So how does a $10,000 contribution limit help someone who's making $45-70,000 year?

How many of these people take holidays abroad every year? Lots that I know of. How many spend money on all kinds of things they'd don't really need? Everyone I know of. When I first started working for the government as a clerk I had more money than I knew what to do with, and a history of having no money. So I started socking it away right away, cause you never know. When I became a program officer I certainly could have afforded to sock $10,000 away in a year, and did. That's how I bought my first house five years after I started working for the government, with a 25% down payment.

No I'm sorry but that's just your own personal spin. What you're calling "intellectual cover" is really just smoke-and-mirrors politicking.

It might be politicking, but it's got a reasonable explanation. Trudeau's tax increases do not. And nobody seems to think they'll actually give him the money he claims they will.

Even NDP Leader Thomas Mulcair recognizes this. “Several provinces are now at the 50 per cent rate,” he noted in 2013. “Beyond that, you’re not talking taxation; you’re talking confiscation. And that is never going to be part of my policies, going after more individual taxes. Period. Full stop.”

http://www.theglobeandmail.com/globe-debate/taxing-the-rich-will-not-pay-off-for-trudeau/article24460706/

[Argus]

Uh... regardless of where the contribution limit is set, some can't/won't contribute the limit, or even anything at all. Are you arguing for no TFSA at all? What about other tax breaks? Not everyone can benefit fully from any given tax break.

http://www.theglobeandmail.com/globe-investor/personal-finance/taxes/how-splitting-the-dinner-bill-relates-to-tax-cuts/article24441644/

[dre]

I think just about everyone other than a rabid ideologue knows very well what rich and wealthy mean and that neither term applies to someone making a lousy $200k a year.

Thats not necessarily true. A lot of people are able to accumulate pretty nice little fortunes on smaller incomes than that.

As for your definition of wealthy there is no fixed definition. In general terms its not really about a certain ammount of money, its more a feeling that you will be able to do the things you want to do for the rest of their lives.

A poll of investors suggested that based on how people feel right now, most people with 5 million dollars in assets of which at least 1 million are cash or liquid assets say they are wealthy. Only 28% of people worth between 1 million and 5 million describe themselves as wealthy.

But a new survey from UBS shows that most investors say "wealthy" means $5 million—with at least $1 million of that in cold, hard cash.

The UBS Investor Watch asked 4,450 investors if they consider themselves wealthy. Fully 60 percent of those worth $5 million or more said they're wealthy, while only 28 percent of those worth $1 million to $5 million said they were wealthy (those were the only two categories given).

But again, its really just whether or not you feel that you can comfortably do the things you want to do.

[Argus]

Thats not necessarily true. A lot of people are able to accumulate pretty nice little fortunes on smaller incomes than that.

As for your definition of wealthy there is no fixed definition.

The best definition of wealthy is, I think, based on how you live, how much power you have, what you buy and own and use.

Poor and lower middle class:

Shop at Wal-Mart and Winners, buy cheaper versions of electronics, live in rental apartments, take the bus or drive beaters, have working class jobs, if they have jobs. Kids go to work for lower end jobs out of high school.

MIddle/Upper Middle class:

Shop at the Sears and the Bay, own their own homes: townhouses, or single family detached bungalows or two story homes in middle class neighborhoods, drive newer Toyotas, Nissans and occasionally Volvos, work in professional jobs, kids go to university.

Rich:

Shop at Harry Rosen or Nordstrom, own very large homes or condos two to three times the size of the middle class ones (price is elastic depending on city), often have nannies for kids, drive BMWs, Mercedes and Porsche's, generally do not have a salaried job, or have one where the salary is only a portion of their remuneration. Kids go to ivory league university.

Wealthy:

Shop at Jimmy Choo, Cartier and Vercace, have servants, live in multi-million dollar mansions and penthouses five times or more bigger than middle class homes, ride in chauffeur driven limousines, own private jets, yachts. Own companies, not just stock in them, have presidents and prime ministers on speed-dial. Ivory league schools line up to try and get their kids to attend.

Edited May 18, 2015 by Argus

[dre]

The best definition of wealthy is, I think, based on how you live, how much power you have, what you buy and own and use.

Poor and lower middle class:

Shop at Wal-Mart and Winners, buy cheaper versions of electronics, live in rental apartments, take the bus or drive beaters, have working class jobs, if they have jobs. Kids go to work for lower end jobs out of high school.

MIddle/Upper Middle class:

Shop at the Bay, own their own homes: townhouses, or single family detached bungalows or two story homes in middle class neighborhoods, drive newer Toyotas, Nissans and occasionally Volvos, work in professional jobs, kids go to university.

Rich:

Shop at Harry Rosen or Nordstrom, own very large homes or condos two to three times the size of the middle class ones (price is elastic depending on city), often have nannies for kids, drive BMWs, Mercedes and Porsche's, generally do not have a salaried job, or have one where the salary is only a portion of their remuneration. Kids go to ivory league university.

Wealthy:

Shop at Jimmy Choo, Cartier and Vercace, have servants, live in multi-million dollar mansions and penthouses five times or more bigger than middle class homes, ride in chauffeur driven limousines, own private jets, yachts. Own companies, not just stock in them, have presidents and prime ministers on speed-dial. Ivory league schools line up to try and get their kids to attend.

Thats just your own definition though, and most people dont share it.

Less than 16% of investors believe in using any sort of threshholds such as what you posted above. The majority felt they were "wealthy" as long as they could do the things they wanted to do comfortably, and to have no financial constaints on the activities they wanted to do.

Half of the respondents said that, more broadly, being wealthy means having "no financial constraints on activities." Only 16 percent said it meant "surpassing a certain asset threshold" and 10 percent said it means "not having to work again."

Its fine for you to have your own special made up "Argus" definition for a word. It gets a little silly however when you claim that everyone that doesnt agree with your made up definition is some kind of ideolog. Especially when your definition is shared by almost nobody.

[Argus]

Less than 16% of investors believe in using any sort of threshholds such as what you posted above. The majority felt they were "wealthy" as long as they

could do the things they wanted to do comfortably, and to have no financial constaints on the activities they wanted to do.

But my definition, which, btw, is hardly one I made up, has the logic of embracing what a person owns and what power they have as opposed to how they "feel" about what they want to be able to do.It's also far more closely related to the issue of wealth disparity than "being able to do what you want" especially with regard to the economic and political power and influence of the wealthy class.

Half of the respondents said that, more broadly, being wealthy means having "no financial constraints on activities."

Sure. And if you earn $200,000 a year do you think you have no financial constraints? You can spend the winter on the French Riviera, for example, or go shopping on Rodeo Drive? You can own a yacht and your own aircraft, have a chauffeur driven Rolls Royce, a maid, a butler, and a castle in Scotland?

Its fine for you to have your own special made up "Argus" definition for a word. It gets a little silly however when you claim that everyone that doesnt agree with your made up definition is some kind of ideolog. Especially when your definition is shared by almost nobody.

Okay, how about this? Those who think a $200k a year income are wealthy are ignorant, with very little acquaintance with reality. Does that seem to make more sense to you? Edited May 18, 2015 by Argus

[Moonbox]

First of all, exempting the lower wage earners, who currently pay no income taxes anyway, the rest of population might or might not be able to afford this depending on their priorities.

The overwhelming majority of them couldn't. A single-income family bringing in $60,000/y would be putting nearly 35-40% of their net income towards just their mortgage payment and property tax. What's left is a pretty meager lifestyle.

A friend was complaining how they're always broke. She'd just spent $600 to buy flowers, and didn't think there was anything odd about that. Her husband had just gone to Toronto to pick up a new motorcycle he'd just bought (n in his $80k pickup). It will be his third motorcycle. They have no savings whatsoever, no equity in their house, and huge credit card bills.

Neat (and useless) story. It's unfortunately rather light on numbers and facts, and once again fairly heavy on Argus testimonial.

But if you make reasonable money, not tons, but a decent salary, and don't need new cars, holidays abroad, constant new gizmos, very expensive, top flight cable and internet and lots of new clothes (and flowers) then you can actually afford to have a non-working spouse and children.

You know what would really help you? Why don't you run a mock budget for someone earning $60,000 a year and tell us how much disposable income they have. Maybe that would help pop that bubble you live in.

And Trudeau's tax break which you enthusiastically endorse is also for top income earners, impacting only the top one third of earners.

Top earners being folks who earn $45-60,000 a year? This is the intellectual cover you were talking about I guess. It's too bad there's really nothing intellectual about it. It's just a slimy re-framing of the data to paint your argument in the best light possible. If these folks are "top earners", then what do we call people earning 440% more than them?

How many of these people take holidays abroad every year? Lots that I know of. How many spend money on all kinds of things they'd don't really need? Everyone I know of.

Who cares? People earning +200k/year are wasting exponentially more.

When I first started working for the government as a clerk I had more money than I knew what to do with, and a history of having no money. So I started socking it away right away, cause you never know. When I became a program officer I certainly could have afforded to sock $10,000 away in a year, and did. That's how I bought my first house five years after I started working for the government, with a 25% down payment.

/yawn. How is it that you still think these sorts of anecdotes are even remotely worth typing? They're 100% useless (and unverifiable), nobody cares and they don't prove anything. I too could tell fascinating and self-praising stories about my work ethic and sensibilities, but I'm smart enough to remember that we're on an internet forum so I don't bother.

It might be politicking, but it's got a reasonable explanation. Trudeau's tax increases do not. And nobody seems to think they'll actually give him the money he claims they will.

They don't have a reasonable explanation. They have an explanation based on falsehoods and they do pretty much the exact opposite of what the Conservatives say they do. The Trudeau plan, while FAR from perfect, is still a lot more reasonable than that. It's just taxing the rich (who can much better afford it) in order to lower taxes for folks earning a fraction that they do. Explanations don't come much more simple or pragmatic than that. Whether or not it's a good plan isn't really the question for me. They're still better than Harper's tax policy, which is at best incompetent.

Edited May 18, 2015 by Moonbox

[andromeda]

money sitting in a high interest savings account earns you on average about 1% which you're fully taxed on. why is it that whenever we get something nice and good like the TFSA...... liberals want to take it away from us?

[Argus]

The overwhelming majority of them couldn't. A single-income family bringing in $60,000/y would be putting nearly 35-40% of their net income towards just

their mortgage payment and property tax. What's left is a pretty meager lifestyle.

First of all, you're assuming they have a mortgage payment. A ton of people rent, which is cheaper. Second, someone making $60,000 with three dependents

pays 22% federal tax. That gives a federal tax amount of $13,200, prov tax of about $3900 for a total tax of $17,100. Given a stay at home spouse NOW,

before changes, you can claim $11,138. You can also claim about $2,000 per child. Oh, and there's the basic personal amount, which is another $11,000

or so, plus a smaller amount, say $9,000 on your provincial taxes. And there are a variety of other writeoffs you get, so let's say your total payable

will wind up in the neighborhood of $10,000. That leaves $50,000. So they'd probably be spending more like $20-22% of net income on housing. Which is

doable.

Top earners being folks who earn $45-60,000 a year? This is the intellectual cover you were talking about I guess. It's too bad there's really nothing

intellectual about it. It's just a slimy re-framing of the data to paint your argument in the best light possible. If these folks are "top earners",

then what do we call people earning 440% more than them?

The tax bracket Trudeau wants to benefit are those earning between $45 - $89,000 a year. Maybe since you personally pay no taxes you don't

understand the tax brackets very well. If you can't support three people on a salary of $70, 80k plus per year maybe you should hire a competent

financial adviser.

They don't have a reasonable explanation. They have an explanation based on falsehoods and they do pretty much the exact opposite of what the Conservatives say they do.

You only say that because, I think, you understand very little about taxes or how to save money. again, maybe you should seek out a competent financial advisor.

The Trudeau plan, while FAR from perfect, is still a lot more reasonable than that. It's just taxing the rich (who can much better afford it) in order

to lower taxes for folks earning a fraction that they do.

So the only excuse you think we need to take more money off those earning more, is that they can afford it better than you? Okay, comrade. But numerous articles, with which the NDP appear to agree, have stated when you raise people's taxes higher than 50% you inspire a greatly increased effort at tax avoidance which nets you progressively less money.

Edited May 19, 2015 by Argus

[dre]

But my definition, which, btw, is hardly one I made up, has the logic of embracing what a person owns and what power they have as opposed to how they "feel" about what they want to be able to do.It's also far more closely related to the issue of wealth disparity than "being able to do what you want" especially with regard to the economic and political power and influence of the wealthy class.

Sure. And if you earn $200,000 a year do you think you have no financial constraints? You can spend the winter on the French Riviera, for example, or go shopping on Rodeo Drive? You can own a yacht and your own aircraft, have a chauffeur driven Rolls Royce, a maid, a butler, and a castle in Scotland?

You dont necessarily have to have any of those things. Not everyone wants them.

Anyways you completely missed the point as usual. I didnt say people with a 200k income are wealthy. Some are, some arent. Some of them have managed to accumulate small fortunes, and some of them live paycheck to paycheck. It really just depends.

[Keepitsimple]

You dont necessarily have to have any of those things. Not everyone wants them.

Anyways you completely missed the point as usual. I didnt say people with a 200k income are wealthy. Some are, some arent. Some of them have managed to accumulate small fortunes, and some of them live paycheck to paycheck. It really just depends.

Yes it does - and I'd be willing to bet many of them - are small businesses and independent consultants who happened to have a couple of good years. I was in that boat for a while but it's very difficult to maintain for most people. Get it while you can. Save it while you can.

[hitops]

Your analogy would be appropriate if the gov't forgoes tax collection on the purchase of a car. Its not that you can contribute anything you want.....its that the gov't will highly benefit only the group who can do it......so sure drop in whatever you want but the tax benefit ends where all can contribute.

You're splitting hairs. The government DOES forgo tax collection on the purchase of a car - it forgoes whatever tax rate it might imagine beyond what we currently pay. There is no effective practical difference between lowering or eliminating a tax rate on something, or just not raising it on another. It is semantics. Furthermore we directly subsidize the existence of auto, which is an indirect tax that benefits (not by choice like the TFSA, but by law) only one group - auto workers, at the expense of others.

The perfect analogy is UCCB. Like the TFSA, it is accessible to everyone. And like the TFSA, some people will take more advantage than others (those who choose to have more kids).

But the TFSA is actually MORE fair than the UCCB. Every single Canadian can contribute to the TFSA. Only people in a situation where they can have kids, can take advantage of the UCCB. It excludes women outside of childbearing age, singles, or those otherwise unable to have kids. Outrageous!

There are countless similar examples. Many cost the taxpayer far more than this, and favor far fewer. If your objection is that the government is putting their hands into something resulting in some change in the distribution of resources and this is on 'all of us' well.....welcome to virtually every single thing Canadian economic life.

Edited May 20, 2015 by hitops