Tories Exaggerating Tax Cuts

[Michael Bluth]

I never liked the GST cut nor the confusing tax credit schemes the Tories have cooked up for everything from daycare to sports activities.

There is nothing confusing about tax credits.

'scheme' and 'cooked up' is needlessly antagonistic language.

What is wrong with giving people an incentive to enroll their children in physical activity? Can you not see the epidemic of childhood obesity in this country? Don't you believe the children are our future?

Edited August 24, 2007 by Michael Bluth

[bk59]

It's called trend analysis. Martin's 57 priorities all involved increasing Government spending. He proved his penchance to do so his one and only full fiscal year as PM.

If he would have kept governing with the same style his promises would have involved continually increasing spending.

Much better to judge him on that than what he did while answering to Chretien.

Trend analysis? With one data point? By that logic it's a good thing Martin wasn't PM for five years. By year five he would have been spending like crazy and racking up debt at an exponential rate! Many things can explain the smaller surplus. Including the fact that all governments will spend more when they think an election is coming up. The bottom line is that it seems pretty pointless to accuse someone of something that 1) they did not do, and 2) their past record contradicts.

[bk59]

There is nothing confusing about tax credits.

'scheme' and 'cooked up' is needlessly antagonistic language.

What is wrong with giving people an incentive to enroll their children in physical activity? Can you not see the epidemic of childhood obesity in this country? Don't you believe the children are our future?

Even as a joke the "why won't anyone think of the children" line is pretty lame.

The fact is that the more tax credits, etc. that exist the more confusing it is to figure out your taxes. Not to mention that to claim these credits you have to provide proof that little Billy participated in an acceptable sports program (or whatever). Tax credits can be used to target some goals, but you have to ask whether or not they are the most effective means to do so. If obesity is the problem, then why not work with the provinces to set up physical exercise and nutrition programs in schools? Or give money to community sports programs? A small tax break will not really encourage that many people to enroll their kids when they still have to pay the full cost of the program up front and then get only a small amount back in April. It also puts the government in the position of having to determine which activities are credit worthy and forces the government to check to ensure that people are claiming the credit legitimately.

Aside from the fact that the tax code does become more complicated, there is also the issue that these specific tax cuts will only affect certain people. A decrease in the tax rate for everyone will help everyone, not just (for example) those people with kids who are enrolled in particular sports. I have no problem with trying to encourage kids to be physically active. But I do have a problem with a government that tries to tell me that my taxes are going to go down by $X when it is painfully obvious that only people who meet very specific criteria will be able to claim all of the tax credits necessary to save $X.

[Michael Bluth]

The fact is that the more tax credits, etc. that exist the more confusing it is to figure out your taxes. Not to mention that to claim these credits you have to provide proof that little Billy participated in an acceptable sports program (or whatever). Tax credits can be used to target some goals, but you have to ask whether or not they are the most effective means to do so. If obesity is the problem, then why not work with the provinces to set up physical exercise and nutrition programs in schools? Or give money to community sports programs? A small tax break will not really encourage that many people to enroll their kids when they still have to pay the full cost of the program up front and then get only a small amount back in April. It also puts the government in the position of having to determine which activities are credit worthy and forces the government to check to ensure that people are claiming the credit legitimately.

Because smaller government is better government. Why should the government create physical activity programs when the private sector will be more efficient in doing so. Provide people the incentive to have their children take part and more parents will get their kids involved.

Does what you refer to in the last line of your quote seem like more work than getting involved with provinces or community sports programs?

Let the market decide the most efficient way to provide these programs. Not the government.

[bk59]

Because smaller government is better government. Why should the government create physical activity programs when the private sector will be more efficient in doing so. Provide people the incentive to have their children take part and more parents will get their kids involved.

Does what you refer to in the last line of your quote seem like more work than getting involved with provinces or community sports programs?

Let the market decide the most efficient way to provide these programs. Not the government.

Except that what you propose is even more limiting to the market. The government will now decide what programs are valid and which are not. The government will decide what constitutes "appropriate" physical activity. Let's say the federal government does nothing to set up new programs, but decides to give tax credits. The same choices will be out there in terms of programs for children, but the government now picks and chooses which are appropriate. Even without setting up programs, a broad tax cut will still give parents the money to enroll their kids in sports programs. With the added benefit that kids could also enroll in other programs that they are more interested in and are equally beneficial (music lessons, buying a baseball glove without having to actually be on a competitive team, etc.). A broad based tax cut will also mean that the parents have the money right away with every pay cheque rather than having to wait until April. Provincial governments already have physical activity programs as part of their education systems, so the work involved is not as much as you might think.

So let's let the market provide the programs. And stop the government from choosing which ones are appropriate and which ones are not. Why not let parents and kids choose what to do with the extra cash rather than limiting their choices and pretending it's such a good thing?

Incidentally, the more tax credits that exist, the bigger the government has to be to deal with them.

[Michael Bluth]

So let's let the market provide the programs. And stop the government from choosing which ones are appropriate and which ones are not. Why not let parents and kids choose what to do with the extra cash rather than limiting their choices and pretending it's such a good thing?

Incidentally, the more tax credits that exist, the bigger the government has to be to deal with them.

The only choice the government is making is with respect to physical activity. People were trying to argue that piano lessons and acting classes should receive the credit. Sorry but those weren't choices of physical activity.

It is a good thing because parents have an incentive to choose to put their kids into physical activities. There is no limitation on the parents. If they want to pay full price for something else so be it. If they want to get them into some sort of physical activity, hey it's a little cheaper now.

There is a pretty weak correlation between the number of tax credits and the 'size' of the Government. CRA may have had to add a bit to their staff this year, but probably not many FTEs. Less than 50 I'd guess.

How much bigger would the government have to be to design new programs and activities to get kids physically active?

[bk59]

The only choice the government is making is with respect to physical activity. People were trying to argue that piano lessons and acting classes should receive the credit. Sorry but those weren't choices of physical activity.

It is a good thing because parents have an incentive to choose to put their kids into physical activities. There is no limitation on the parents. If they want to pay full price for something else so be it. If they want to get them into some sort of physical activity, hey it's a little cheaper now.

There is a pretty weak correlation between the number of tax credits and the 'size' of the Government. CRA may have had to add a bit to their staff this year, but probably not many FTEs. Less than 50 I'd guess.

How much bigger would the government have to be to design new programs and activities to get kids physically active?

Like I said, there are already people who do that in government. So not a big addition there. As far as the federal government working with provinces, I think that should be done a lot more often and have no problem with adding people to improve federal - provincial goals.

And you've partially illustrated my point. I have no doubt that acting classes are better for a kid's health than doing nothing. That is a choice with respect to physical activity. If some kid is reasonably fit because he or she plays with their friends outside, why shouldn't they get some of that money for a structured activity that they want to do (e.g. piano lessons)? The fact is the incentive really isn't that big because parents still have to pay the full cost up front.

If you really think the government should let the market decide things, then why don't we just let all parents decide what is best for their children in terms of getting them active rather than pigeon holing them into government approved programs?

[jdobbin]

If you really think the government should let the market decide things, then why don't we just let all parents decide what is best for their children in terms of getting them active rather than pigeon holing them into government approved programs?

Which is why I am opposed to these tax credits. Anyone trying to figure out what they cover and what they don't has to be an accountant. It isn't easy at all the figure out.

[Michael Bluth]

Like I said, there are already people who do that in government. So not a big addition there. As far as the federal government working with provinces, I think that should be done a lot more often and have no problem with adding people to improve federal - provincial goals.

And you've partially illustrated my point. I have no doubt that acting classes are better for a kid's health than doing nothing. That is a choice with respect to physical activity. If some kid is reasonably fit because he or she plays with their friends outside, why shouldn't they get some of that money for a structured activity that they want to do (e.g. piano lessons)? The fact is the incentive really isn't that big because parents still have to pay the full cost up front.

If you really think the government should let the market decide things, then why don't we just let all parents decide what is best for their children in terms of getting them active rather than pigeon holing them into government approved programs?

So it's only 'reasonably fit' kids who should get credit for piano lessons? Deciding which kids are reasonably fit opens a whole new can of worms.

Government approved is pretty misleading in this case. The conditions on the credit are pretty lax.

Eligible activities

The Department of Finance has indicated that, in order to qualify for the tax credit, a program must be:

ongoing (either a minimum of eight weeks duration with a minimum of one session per week or, in the case of children's camps, five consecutive days);

supervised;

suitable for children; and

substantially all of the activities must include a significant amount of physical activity that contributes to cardio-respiratory endurance plus one or more of: muscular strength, muscular endurance, flexibility, or balance.

Seems like anything that actually involves significan physical activity will suffice.

Which is why I am opposed to these tax credits. Anyone trying to figure out what they cover and what they don't has to be an accountant. It isn't easy at all the figure out.

Actually it's really easy to figure out dobbin. What is so difficult to figure out about the above conditions? Something tells me you would support these credits whole heartedly if a Liberal government had brought them in.

Edited August 24, 2007 by Michael Bluth

[jdobbin]

Incidentally, the more tax credits that exist, the bigger the government has to be to deal with them.

Another good point. It is so much easier to just lower income taxes in general. Fairer as well.

[Michael Bluth]

Another good point. It is so much easier to just lower income taxes in general. Fairer as well.

Have you figured out the phsyical fitness tax credits yet?

[bk59]

So it's only 'reasonably fit' kids who should get credit for piano lessons? Deciding which kids are reasonably fit opens a whole new can of worms.

Government approved is pretty misleading in this case. The conditions on the credit are pretty lax.

Seems like anything that actually involves significan physical activity will suffice.

Actually it's really easy to figure out dobbin. What is so difficult to figure out about the above conditions? Something tells me you would support these credits whole heartedly if a Liberal government had brought them in.

The example given is just that - an example. I'm not advocating that we force kids into a fitness test for the purposes of a tax credit.

Again though, here is the problem with the tax credit. It has to be a program. So if I go out & buy some sports equipment for my kid so that he can go skating on the local ice rink then it isn't eligible. I do understand what the government is trying to do, I just don't think a tax credit is the way to do it. Especially given that you can only really claim $77.50 per child. (I'm getting that from here which is where I assume you got your information as well.)

So who is this really helping? Eight week programs and five day camps are going to cost a bit more than $77.50. The people who will enroll their kids in these activities will do so anyway. $78 is not going to be a big factor in that decision. But for families that really are struggling, $78 could go a long way in getting a pair of skates, or some baseball equipment, etc. Except that they can't claim that, because their kids would have to enroll in an actual program since just playing sports in the local park won't count.

All I'm really saying is that I think the Conservative government is exaggerating how much these credits really help people and I would much rather see a blanket tax reduction where people get that extra money every week with their pay cheque and then spend it however they want. If you want to encourage something like physical activity in children I think you get a lot more bang for your buck if you focus spending on that area rather than hoping parents understand their taxes well enough to appreciate the small difference and then are willing to wait until the next April to get that money back.

[Michael Bluth]

All I'm really saying is that I think the Conservative government is exaggerating how much these credits really help people and I would much rather see a blanket tax reduction where people get that extra money every week with their pay cheque and then spend it however they want. If you want to encourage something like physical activity in children I think you get a lot more bang for your buck if you focus spending on that area rather than hoping parents understand their taxes well enough to appreciate the small difference and then are willing to wait until the next April to get that money back.

Where is the exaggeration?

Of course a blanket tax cut is preferable. But $80 a year? Hmm, the GST cut is much much much more money in people's pockets.

[geoffrey]

Of course a blanket tax cut is preferable. But $80 a year? Hmm, the GST cut is much much much more money in people's pockets.

Maybe $80. Maybe.

It's $100 per $10,000 of spending. Average income in Canada is about $30k. After tax, less. Take out tax free expenses (rent, health, food) and your left with a pretty small amount.

I saved alot because I made some major purchases. But that's simply not the reality for most Canadians.

Either way, let's cut the crap and go either flat tax or pure GST. Enough of this deceptive taxation, I want to just pay one tax, no exceptions (this is, of course, no fault of the current government).