Tag Archives: tax policy

Making Canada great again

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By Trevor Parry

Special to the Financial Independence Hub

I have to apologize to my CFL fan friends, particularly in Saskatchewan, where I have found it the rule rather than the exception to find a shrine to the fabled “Riders” in clear site in most offices.  The game just doesn’t do it for me.  The one, two punt monotony of the game isn’t overcome by the stoic resolution to play in Stalingrad like conditions on the Prairie in late fall.

With his second foray into Budget making, Finance Minister Bill Morneau’s attempt must be described as nothing more than a punt.  In this instance they have kicked away the ball to see what the offense south of the border will do.  For fiscal conservatives, who believe budgets should only go into deficit when faced with financial calamity, rather than to send the swag to the long list of Liberal sacred cows, pet projects and friendly consultants, this Budget was more of the same Keynesian dirge, although with veiled threats of further confiscation of wealth.  Certainly Prince Justin and LSE alumni Billy are taking marching orders from the reconstituted politburo to lay low and wait to see what The Donald can get through.

The Trump tax reform package, which despite the recent  (and what I am sure will be a temporary) hiccup in repealing and replacing Obamacare, will likely enjoy complete GOP support and support of Democrats concerned about re-election in 2018,  is the most ambitious tax plan to see the light of day since the days of Ronaldus Magnus.  It puts the Trudeauopian punitive “tax the hell out of everyone who wants to save 10 cents” dictum in definite jeopardy.  It would reduce all tax rates, including the top rate down to 33% from to 39.60%.

Canadian top tax rates kick in at just $200,000, half that of the US

Canadians should know that the top bracket in the US doesn’t kick in until you hit an income of US$418,000 as an individual, $470,700 if you file jointly and $444,550 if you file as a head of household with dependents.  Remember the Little Prince cancelled the miniscule Family Tax Cut ($2k) professing claims of “fairness”.  Canadian top rates kick in at C$200,000.

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A retired Advisor’s Open Letter to Bill Morneau on expanding TFSA

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Finance Minister Bill Morneau (bmorneau.liberal.ca)

(To:) Hon. Bill Morneau, Minister of Finance,
House of Commons, Ottawa.

Dear Hon. Minister,

Thank you for your response to my previous letter. I am a strong believer in an enlarged Tax-free Savings Account (TFSA) and have NINE reasons for that belief through my experience as an IA (Investment Advisor).

I think you will agree that the larger TFSA makes retirement savings fair for all levels of Canadians incomes, but helps those who need it most as there is little RRSP deduction benefit for low-income Canadians. I think your background experience will lend itself to agreeing with my nine reasons for restoring the $10,000 TFSA.

Restore the $10,000 TFSA

The $10,000 TFSA [the previous annual contribution level] is the most profound and beneficial social program created in Canada’s 21st century. It benefits the young, seniors and the less fortunate as well as the well off. Its principal benefit is a meaningful and manageable amount of money which can be used as a saving vehicle and a retirement savings account.

1.)  It is especially beneficial to the non-working spouse, by enabling a savings and retirement account not requiring a monthly pay cheque and its commensurate income tax and tax deductions. This was the principal reason for the Americas Roth IRA, (ROTH account withdrawals are tax free,  but after the age of 58.)

2.) The larger TFSA amount is a meaningful savings target by today’s standards in that $400,000 can be accumulated over 40 years of adult life. Continue Reading…

Opinion: Tax policy and the Liberals

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Trevor Parry

By Trevor Parry, M.A., LL.B,LL.M (Tax), TEP

Special to the Financial Independence Hub

I am always concerned when a Federal government starts thinking of the Province of Quebec as a policy innovator.  Certainly the left exalts their cheap daycare, made possible by an utterly punishing tax burden on business and individuals.  Well, it should be no great surprise that the Boy King and his fellow trust fund alumnus, LSE grad Bill Morneau have started to embrace “revenue measures” quite popular in La Belle Province.

Taxing private medical and benefit plans

The latest trial balloon is to make private medical and benefit plans a taxable benefit.  This would mean that most Canadians who have dental and pharmaceutical coverage provided as part of their employer compensation would start seeing these benefits taxed as income.

Of course, the middle class:  that amorphous group that the kumbaya chorus known as the federal Liberal Party claims to represent would feel the pinch most acutely.  If your group plan costs $6,000 per year you can now look forward to having the Little Prince confiscate just over $2,000 from you.  If you are unfortunately part of the class enemy known as the 1% then count on $3,000 or more being forked over.   One can assume that the bedrock of the Liberal Party, that is the civil service, would somehow be spared from this tax measure.

The rationale for this policy innovation is of course the grand and lofty goal of egalitarianism.  The homeless and downtrodden don’t have these plans so once again we must measure all policy according to the lowest common denominator.  The fact that these individuals, if they care to check into the medical system are completely covered is irrelevant in the Fabian Socialist society (a.k.a LPC).

Unfortunately too many Canadians, fed a steady diet of Liberal sycophancy from the Canadian media believe that Justin and the Liberals are champions of the little guy.  There has been no bolt of lightning that jars into accepting the reality that the LPC is the part of oligopolies, banks, insurance companies, Bombardier and the law and accounting firms that service them.    It is also lost upon them that the general health of the population should be given at least equal weight as mandated equality of results. Continue Reading…