Behind the Numbers

Entries Tagged as 'Taxes and Tax Cuts'

Liberal election platform shifts the chips for the rich, takes a pass on the middle class

May 5th, 2015 · · Federal Election, Taxes and Tax Cuts

Yesterday the Liberals released a portion of their platform for the upcoming federal election. While I’m happy to see some overlap with our Alternative Federal Budget (AFB), I’m puzzled by the Liberals’ proposed tax changes, which basically just move tax money around in the top 20% of households without doing anything substantial for every politico’s favourite demographic, the “middle class.”

Don’t get me wrong: we love when politicians take ideas from the AFB. But we’ve got much more effective ways of spending the $3 billion raised through a new tax on the richest families rather than giving a tax break to the next richest families. Let me break it down.

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Milestones of the New Economy: One T4 slip at tax time

May 1st, 2015 · · Employment and Labour, Ontario, Taxes and Tax Cuts

Last year marked a milestone for me: 2014 was the first year since high school where I had only one income source to include in my tax return and I continued working for the same employer the following year.

That’s at least 25 T4 slips and 17 employers over 14 years of tax returns, folks.

This is what it’s like to be a millennial working in a precarious labour market.

Over the years, I’ve filed T4 slips from all sorts of workplaces: restaurants, greenhouse farms, a bank, teaching assistantships, research assistantships, part-time contracts that turned into full-time contracts, and short-term contracts that lasted only a couple of months.

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The TFSA Shouldn’t Be Scrapped, It Should Be Fixed: Budget 2015

April 20th, 2015 · · Alternative Federal Budget, Federal Budget, Income Inequality, Taxes and Tax Cuts

Today The Globe and Mail Report on Business published 5 economists’ thoughts on what tomorrow’s federal budget could and should do.

I chose to focus on a measure that is virtually guaranteed to be in the budget, because the federal government has promised to do it since the last federal election in April 2011: double the annual contribution limits to the Tax Free Savings Account.

I thought it was bad policy in 2011. It’s even less of an excusable policy direction now. It doesn’t even do what the feds say it does.

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Doubling contribution limit to Tax-Free Savings Accounts exposes true intent of a bad policy

April 16th, 2015 · · Economy & Economic Indicators, Federal Budget, Income Inequality, Taxes and Tax Cuts

Last week, federal finance minister Joe Oliver re-affirmed that his government seeks to double the annual contribution limit to Tax-Free Savings Accounts (TFSAs), from $5,500 to $11,000.

This is a terrible idea.

When the TFSA was first introduced, the claim at the time was that the policy was intended to support modest income people wanting to save for retirement, but for whom the RRSP may not make good economic sense. There was some merit to this argument, although boosting the CPP and Old Age Security (OAS) would have been a far preferable solution.

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Alternative Federal Budget vs. Income Splitting: Who benefits?

March 30th, 2015 · · Alternative Federal Budget, Federal Budget, Taxes and Tax Cuts

On March 19th, we released the 2015 Alternative Federal Budget (AFB) and also marked the publication’s 20th anniversary. Like every year, the AFB includes practical measures to improve Canadian’s lives. For the past two years, we’ve been running our AFB through a sophisticated income inequality simulation to see how our budget would affect poverty and inequality in Canada. This analysis allows us to see who benefits and who doesn’t from various social programs and tax/transfer changes.

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Doubling TFSA Contributions Limits: Even Nastier than Income Splitting

March 2nd, 2015 · · Canada, Income Inequality, Taxes and Tax Cuts

The Harper government gives five reasons why Canadians ought to be happy with its proposal to double the maximum contribution to the Tax-Free Savings Account. Examine each of its points more closely, however, and it’s clear that the TFSA carries far higher risks than rewards — for individual Canadians  as well as for the economy as a whole.

Let’s unpack the government’s arguments one by one:

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Small business tax cuts in Canada: been there, done that

January 29th, 2015 · · Canada, Taxes and Tax Cuts

In the prelude to the 2015 federal election, NDP Leader Thomas Mulcair is talking job creation in Southwestern Ontario.

He’s promising more small business tax cuts and credits as his entry point. It’s the political norm these days to promote low business taxes, but the reality is small business tax cuts are already old hat. Here’s why:

About a year ago, Canada’s Department of Finance released a report outlining the changes in effective tax rates for small businesses, or Canadian controlled private corporations (CCPCs) as they are called in tax language, between 2000 and 2011.

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Municipal headache

January 29th, 2015 · · Cities, Taxes and Tax Cuts

Municipal taxes. Their mere mention is enough to cause headaches for some. Throughout the year, we nearly forget that we help finance our own town or city. Then the tax bill pops up in our mailbox, and we open it with trembling hands, wondering about the magnitude of this year’s hike. This letter can put an end to many households’ home-owning project, mainly elderly and young families. Wages rarely follow the staggering rise in the price of real estate.

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The downside of Canada’s love affair with small business

January 28th, 2015 · · Income Inequality, Taxes and Tax Cuts

It is not difficult to understand the motivation behind the federal NDP’s decision to make a tax cut for small business a centerpiece of its pre-election policy roll out.red

As touted by what must be the most consistently effective political lobbying force in Canadian history, small business is perceived to be an important engine of economic growth and job creation.

And while supporting small business doesn’t have the easily identifiable upside that goes with investing in large-scale projects of multinational corporations that have big job numbers attached to them, it has the virtue of avoiding the red-faced problem when those big jobs go south.

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Toronto, you’re richer than you think

January 20th, 2015 · · Ontario, public services, Taxes and Tax Cuts

Toronto’s budget season has begun in earnest, and it’s yielding a mix of the predictable “we can’t afford things” debate, along with some refreshing surprises.

Refreshing: Mayor John Tory is clearly signalling a desire to break from the recent past with the 2015 budget. His announcement on improvements to the TTC and his focus on the value of service improvements at his budget press conference this morning are a welcome breath of fresh air.

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