Tomorrow's supposed to be the big unveiling of the 2012 federal budget. Some would say it's going to save use with all it's cost-cutting measures, others would say it's going to destroy our way of life with all it's cost-cutting measures. I ascribe to neither theory, really, I find that money flows like water through the hands of politicians no matter what new plans they announce.
Anyway, I thought this was a pretty important point to remember when looking at whatever the new budget provides:
Quote from: http://www.theglobeandmail.com/report-on-business/economy/economy-lab/frances-woolley/why-theres-never-any-bad-news-in-a-budget/article2382405/
Budgets are carefully crafted to maximize the salience of any good news they contain. The benefits of new initiatives are illustrated with examples of the concrete benefits they will provide for loving, caring, hard-working individuals and families ? people that voters can connect with.
Budgets never explain, however, how the typical person will be affected by the cost-cutting or tax increasing initiatives. Just imagine a budget that contains language like this ?Manon is a public servant with a young family. Manon?s mother, Claudine, is a low-income senior who lives with Manon?s family. Claudine is infirm and is dependent on Manon?s assistance for her personal needs. Manon will lose her job this year, after her department completes its strategic review?? Bad news is invariably presented in a way that minimizes its salience to the average person.
(emphasis mine)
Yeah, obviously politicans downplay the bad and pump up the good. It'll be interesting to see what they tout as "amazing support for Canadians" this year.
I remember when they brought in the $500 fitness tax credit. Really? $500 tax savings for putting my kid in a sport? Well, no, actually 15% of $500 so $75. Yay, $75 less in taxes. Or I could
not put the kid in sports and never spend the $500 to begin with, thus saving $500. If they're trying to influence my decision on whether to put the kid in sports or not, do you think that $75 is gonna change my mind?
Oh well, one more day and then we'll know.
This page has a neato debt-to-GDP-ratio chart, comparing the G7 plus Greece: http://www.theglobeandmail.com/news/politics/as-the-federal-budget-looms-how-heavy-is-canadas-debt-burden/article2381579/ (at least, I think that's the G7?)
Canada was at 80% debt-to-GDP ten years ago, dropped down to about 65% debt-to-GDP five years ago, and have since climbed back to 92% debt-to-GDP this year. Obviously part of that is caused by the GDP shrinking due to recession, but the other part of it obviously is deficits (spending more than we make).
...
I'm probably the only tax nerd on here, eh?
No I've been keeping up with it as well, I'm getting sick of the paradoxical rhetoric coming out of Ottawa that always promises to decrease spending and reduce deficit and yet spends MORE and MORE. The Conservatives been there for years now, the time for fixing the budget was years ago dammit! One of the reasons I voted for them last time was because of Harpers background as an economist and the pedigree of his cabinet.
I fully expect tomorrow's budget to include massive cuts all around, then the whining will begin about decrease in public funding, well we are still in a recession and in a very tenuous position.
At the moment I'm worried about lobbyists from the USA pushing for Securities Deregulation...
Quote from: Thorin on March 28, 2012, 10:57:57 AM
Anyway, I thought this was a pretty important point to remember when looking at whatever the new budget provides:
Quote from: http://www.theglobeandmail.com/report-on-business/economy/economy-lab/frances-woolley/why-theres-never-any-bad-news-in-a-budget/article2382405/
SUMMARY: budget is mostly PR/marketing/psyops and only a tiny bit of math.
FYP?
and re. "tax nerd", well imo you can just as easily replace "budget" with "tax policy" in the above FYPquote ;)
Darren: You clearly don't read the budgets, they are full of math, including long-term predictions on future tax cuts and the like. Or perhaps you're only looking at the summaries-of-summaries that the reporters post?
Mr. A: Go back a few years to when Paul Martin and the Liberals got voted out of office, and Stephen Harper and the Conservatives got voted in. Paul Martin had personal income tax cuts (we'd pay less) as well as a reduced budget (they'd spend less) on the table, and when the Conservatives came in they scrapped both the personal income tax cuts and the reduced budget. This gave them a boat load of surplus to play with, which eventually turned into the GST reduction and a large amount of military hardware.
I didn't vote Conservative at the time, but like you thought that they would be reducing the budget once they got elected, as they'd been hounding the Liberals for years about ballooning budgets and runaway discretionary spending. Turns out the economy was doing great and so the Conservatives themselves went on spending sprees, just not the same ones that the Liberals would have gone on.
Anyway, we'll see if that gets addressed in the budget speech today.
Oh, and here's some numbers: OAS (Old Age Security, given to people 65 or older) currently costs $36B and is expected to increase to $108B by 2030. At 2.2% inflation (I think that's the average over the last hundred years), $36B becomes about $54B, half of $108B. So OAS costs are going to double, in today's dollars, by 2030. Canada's fleet of 65 F-35s is expected to cost about $30B in today's dollars (source (http://www.flightglobal.com/news/articles/canada-f-35-cost-estimate-soars-66-report-354228/)). So 65 airplanes will cost as much as 60% of the expected increase in OAS costs. The obvious answer? Keep the airplanes, raise the age that we start giving old people money at.
http://www.winnipegfreepress.com/canada/penny-to-disappear-from-coinage-system-minting-to-end-by-fall-budget-144956945.html
No more pennies. Discuss.
Quote from: Tom on March 29, 2012, 03:23:18 PM
http://www.winnipegfreepress.com/canada/penny-to-disappear-from-coinage-system-minting-to-end-by-fall-budget-144956945.html
No more pennies. Discuss.
This is a problem because most taxes cause prices not not evenly hit 5c and standard pricing to get customers always puts things at .99.
Then a gain I pay for so few things with bills that I don't see it bothering me much.
Quote from: Thorin on March 29, 2012, 09:05:58 AM
Darren: You clearly don't read the budgets, they are full of math, including long-term predictions on future tax cuts and the like. Or perhaps you're only looking at the summaries-of-summaries that the reporters post?
Yes and yes; the reporters filter down the heavy stuff for the masses -- and most of the masses are not interested in looking into the SOURCE material, they want a summary they can respond to. Hence what I said, obviously there's math all over the place, but it's too overwhelming for Jo Canada to hear about in detail even in the G&M or FP, heck nowadays they can go online and look in detail ANY kinda of political/legal tomes if they so choose. Most don't choose.
re. pennies:
... I'd be okay with pennies still being around if vending machines took lower than a nickel ... always have tons of pennies in my wallet at the end of the day when I want a snack, often I'm 5cents or 10cents short with my non-penny change /rant
This "dropping of pennies" has been talked about ever since GST went to an exact 5% ...
now it's gonna be up to the stores to stop charging 29.99 when they really are charging you pretty much 30.00 , otherwise they are going to be ripping people off 1 "virtual penny" every sale, which might actually make people go to "the competition" in disgust when they realize it.imo the psychological benefit of selling the occasional $30.00 item with a customer thinking it's only "20-something dollars" is not worth the loss of other customers who feel "had".
also yay thanks Winnipeg Free Press, I learned a cool new word today:
shinplaster (http://webhome.idirect.com/~mjp/mjpqna.html#1).
I, for one, won't miss pennies.
In fact lets get rid of everything smaller than a quarter.
I was still a boy, about 9 or so, in Holland when they eliminated the pennies. Rounding was easy and was done on the final bill, not each item. Even back then at that young age, I heard the complaints and fears about companies having to round down more than they'd get to round up, costing them money a penny or two at a time. I have never looked up if that's still a concern almost thirty years later (they've switched from the Guilder to the Euro now).
Here's the exact text from the budget:
Quote from: http://www.budget.gc.ca/2012/plan/chap5-eng.html
Refocusing Government and Programs
[..]
The Government will introduce legislation to modernize Canada?s currency set by eliminating the penny from Canada?s coinage system. The Government will no longer distribute pennies as of Fall 2012. However, the penny will retain its value indefinitely and can continue to be used in payments. The penny has weak purchasing power and costs the Government 1.6 cents to produce. Other countries, such as New Zealand, Australia, the Netherlands, Norway, Finland and Sweden, have made smooth transitions to a penny-free economy. The Government expects that businesses will apply rounding for cash transactions in a fair and transparent manner. Canadians will be able to redeem pennies for full value. The Government will work in collaboration with institutions and charitable organizations that may wish to organize fundraising activities around the elimination of the penny.
Notice that it says
expects, not
requires businesses to apply rounding in a fair and transparent manner. Unless they pass a law unequivocally stating how to round, there's nothing stopping every company from simply rounding up every transaction and making an extra one to four pennies. Hopefully they get their act together and pass a (short but sweet) law about rounding on transactions.
Also, from the article Tom posted:
Quote from: http://www.winnipegfreepress.com/canada/penny-to-disappear-from-coinage-system-minting-to-end-by-fall-budget-144956945.html
"There's 30 billion pennies in circulation and every year they were minting a billion more," [MP Pat Martin] said. "It was just a no-brainer, slam dunk, that it's a place where we could save some money.
There appear to be no plans to remove pennies from circulation, only to stop creating new ones. And the pennies will retain their value indefinitely, just like the one-dollar and two-dollar bills that were removed from circulation back in the 80s and 90s. However, the bills are removed from circulation by banks whenever they're handed in, whereas there is no stated plan to do so for pennies. So we may see pennies for a long time yet.
"Grey Explains Things (http://www.youtube.com/user/CGPGrey/videos)" discussed anti-penny perspectives way back in Nov2011:
http://www.youtube.com/watch?v=y5UT04p5f7U
"Pennies are bad for people and the economy"
I would hate pennies and loose change less if we had these in Canada https://www.coinstar.com/HowToVideos/HowToCashIn
Quote from: Lazybones on May 03, 2012, 12:22:12 PM
I would hate pennies and loose change less if we had these in Canada https://www.coinstar.com/HowToVideos/HowToCashIn
We have them all over the place in Edmonton.
https://www.coinstar.com/coinmachine?SearchAddress=edmonton
I've seen them in a few grocery stores at the very least, coulda sworn it was Superstore but maybe only Safeway.
Ridiculous amounts charged for a service most people don't want . But at least it's a voluntary choice to pay. (http://forums.righteouswrath.com/index.php/topic,8695.msg60147.html#msg60147). ;)
Quote from: Darren Dirt on May 03, 2012, 12:33:58 PM
only Safeway
All yes, that is why I didn't see them introduced.
Quote from: Lazybones on May 03, 2012, 12:22:12 PM
I would hate pennies and loose change less if we had these in Canada https://www.coinstar.com/HowToVideos/HowToCashIn
?Fee for coin counting when exchanging for cash =
9.8 cents per dollar counted in USA;
11.9 cents per dollar counted in Canada. Fees may vary by location.
Why we pay more? Lord only knows. However, that's 11.9% interest for the sake of them counting a few coins for ya. Cash in $40 in change, and you've lost a couple of Large Double Doubles. Plus you have to go to a store that has the machine. Probably easier and definitely cheaper to just roll it yourself.
* yes I know you can go the Gift Card route, but I'd rather get cash for cash, I hate gift cards.
Rolling vs volumn of pennies.. Since interac is everywhere it isn't much of a problem but growing up we used to amass HUGE jars of pennies and other coins... pennies never seemed worth rolling or you would always run out of rolling paper... dumping a HUGE jar of pennies in one of these things seems worth it to me... If the gift card avoids some of the charge I have no problem with that, especially if it is to a place a normally shop.
Growing dependence on Interac is somewhat alarming, witness the chaos of a busted connection at a Tim Hortons
That said, I don't usually carry cash anymore and dump any change I get into a big jar...
Quote from: Mr. Analog on May 03, 2012, 01:44:52 PM
Growing dependence on Interac is somewhat alarming, witness the chaos of a busted connection at a Tim Hortons
That said, I don't usually carry cash anymore and dump any change I get into a big jar...
That is more a dependance on electronic tills in general.... Even places that take mostly cash seem to fall apart if the power goes out... No one can break out a calculator and do purchases because it screws up the inventory control numbers.
True enough...
Federal Budget 2015 is set to drop tomorrow afternoon. I wonder what changes it will hold for us taxpayers. If the tax rates go up, they better go up for the corporations as well!
Quote from: Thorin on April 20, 2015, 10:06:29 PM
Federal Budget 2015 is set to drop tomorrow afternoon. I wonder what changes it will hold for us taxpayers. If the tax rates go up, they better go up for the corporations as well!
Reminds me, on a provincial level, is every party OTHER THAN the P"C" party promising to add a percentage point or two onto the corporations' tax load?
I haven't had time to read the details yet, maybe tonight. But it looks like the big items are:
- the Family Tax Cut (lets you reduce your taxes if you have a spouse and kids and your spouse has a significantly different income than you)
- the increase to the Universal Child Care Benefit (gives money to families who have kids, then gets taxed as part of the lowest parent's income)
- a bit of an increase in military spending
- a claim that they'll stop the deficits (and pass laws about not being allowed to run a deficit in the future)
- a bunch of promises for program expenses in future years (what the hell? why announce spending that won't start until 2018?)
I appreciate the $2,000 Family Tax Cut and $2,460 UCCB increase ($1,746.60 after taxes). My family just happens to be the right composition to take advantage of those changes to the tax code. The UCCB increase will help all families, especially poorer ones as they'll pay little or no tax on that money.
The Family Tax Cut, though, really only helps two-parent families where one parent makes significantly more than the other. Then again, those two-parent families where one makes more than the other used to pay more tax than two-parent families where the parents made equal money. For instance, one family makes $70k-$30k, the other makes $50k-$50k. Both families make $100k total, but the first used to pay more tax.
Neither of these changes help non-family taxpayers, though.
Quote from: Thorin on April 21, 2015, 03:14:07 PM
- the Family Tax Cut (lets you reduce your taxes if you have a spouse and kids and your spouse has a significantly different income than you)
- the increase to the Universal Child Care Benefit (gives money to families who have kids, then gets taxed as part of the lowest parent's income)
<snip>
The Family Tax Cut, though, really only helps two-parent families where one parent makes significantly more than the other.
Ding Ding!
BOOOOOOOO ;)
Quote from: Lazybones on April 21, 2015, 04:28:05 PM
Quote from: Thorin on April 21, 2015, 03:14:07 PM
- the Family Tax Cut (lets you reduce your taxes if you have a spouse and kids and your spouse has a significantly different income than you)
- the increase to the Universal Child Care Benefit (gives money to families who have kids, then gets taxed as part of the lowest parent's income)
<snip>
The Family Tax Cut, though, really only helps two-parent families where one parent makes significantly more than the other.
Ding Ding!
I take it you're trying to say this will help you quite a bit?
If I remember right, you'll benefit fully from the Family Tax Credit, and you'll see a bunch more money from the UCCB increase, and hopefully you've been getting the Child Disability Benefit for some of your kids. When my little guy's ASD was finally confirmed by a doctor and the requisite paperwork filled in, I got about $18,000 back on taxes paid in the previous six years. Sounds like a lot, but it got rolled into medication costs, therapy costs (lego therapy is awesome), and life experiences to help him learn how to live a better life.
Good gord, the number of sports cars I could've bought if I didn't have kids :P
Ugh, looking back at the numbers, I can't believe I still paid $66,000 in taxes (not including CPP and EI) after the disability benefit refund over those six years...
3 kids and single income household so it should help but only if they are refundable.
As you note I also have the disability credit, so I normally have surplus "non refundable" credit.
You should be getting:
refundable credits:
CCTB - Canada Child Tax Benefit, reduced once your income is over the first tax bracket (which I think you are)
NCBS - National Child Benefit Supplement, drops to zero by the time your income is over the first tax bracket, you probably don't get it
CDB - Child Disability Benefit, reduced once your income is over the first tax bracket (or actually higher even)
GSTC - GST Credit, reduced pretty quickly, you probably don't get it
BCECTB - BC Early Childhood Tax Benefit, started this month in BC, for kids under six
taxable payments from the government:
UCCB - Universal Child Care Benefit, used to pay $100/month per kid six or younger, now it's $160/month per kid six or younger and $60/month per kid seventeen or younger
non-refundable credits that are added up and then multiplied by 15%:
Basic Personal Amount - everyone gets this
Spousal Amount - this might get reduced a bit when your UCCB goes up
Amount For Children - you get more if you get the family caregiver amount, which you can get for those that are considered disabled
CPP - your total CPP contributions
EI - your total EI contributions
Canada Employment Amount - pretty much everyone with a job gets this
Public Transit Amount - since you take public transit
Children's Fitness Amount - dunno if your kids are in any sports
Children's Arts Amount - we've been able to claim Lego Therapy under this
Disability Amount Transferred From a Dependant - this is a surprisingly large amount, about $13,000 per kid
I'm guessing your non-refundable credits above are around $65,000, so 15% would be $9,750
non-refundable credits that are not multiplied by 15%:
Family Tax Cut - up to $2,000 depending on how much of your income you can "transfer" to your spouse; I'm guessing you can get the full amount
Your non-refundable credits before the Family Tax Cut are $9,750. To have left-over non-refundable credits there, you'd have to make about $58,300 or less.
Your non-refundable credits with the Family Tax Cut will be $9,750 + $2,000 = $11,750. To have left-over non-refundable credits there, you'd have to make about $67,400 or less.
So if you make more than $67,400, you'll probably see the full benefit from the Family Tax Cut.
Now I could have guessed wrong, maybe all three kids qualify for the Disability Amount and maybe your wife does, too, in which case you're looking at another $3,000 in non refundable credits, and your income to have leftover credits without the FTC would need to be $71,900 or less and with the FTC it would need to be $81,000 or less.
So if I guessed wrong and you can claim more, you'll probably see the full benefit from the Family Tax Cut if you make more than $81,000.
Oh, I should say, $81,000 in income without owing tax is surprisingly good. On the other hand, that assumes you're supporting three kids and a wife all with disabilities while taking the bus to work living in the Vancouver area where everything's expensive.
As opposed to a single non-disabled person who would owe about $10,500 in taxes (so about $900/month).
Quote from: Thorin on April 21, 2015, 09:32:32 PM
On the other hand, that assumes you're supporting three kids and a wife all with disabilities while taking the bus to work living in the Vancouver area where everything's expensive.
At the moment only one child / dependant is certified for the disability credit. However that may change. Doctors don't sign those papers unless they can back them up.
The income splitting is new for this tax cycle so you are probably correct I won't have surplus and will get more benefit.
And yes the house hold income is north those figures, it has to be for where we live. That is why I like the income splitting, as you note single income households kind of got shafted. I can make great money but where I live eats that up along with those other extras you noted.
Btw going with a home schooling program you can get a lot more time for art therapy etc since your funding is not dumped into the school district pool. That is one advantage to having your spouse stay at home.