Category Archives: taxes

It’s Just Money

The Economist this week warns policy makers to “start preparing for the next recession” while they still can. The release of the government of Canada’s annual financial report for the 2017-18 fiscal year, however suggests the Trudeau Liberals have no notion of foregoing that most enjoyable of all entitlements: spending other people’s money.

The annual budget is an aspirational document, revealing what the government would like to do. But the annual report is a look in the rearview mirror at what it did in the year ending March 31, 2018.

This year is complicated by a restatement of the public finances going back years to factor in an accounting change. (The Auditor General ordered the restatement, related to discounted and unfunded pension obligations, and it adds an additional $20 billion to the federal debt, which now stands at $671 billion.) But the story is relatively simple — 2017-18 was a bumper year for government revenues, which rose by $20 billion, or 6.9 per cent, from the previous year.

Personal income tax increases accounted for half of that flood of new money coming into the coffers, around half of which was related to economic growth and the other half to the unwinding of tax planning that had suppressed revenues in 2016-17 (when the Liberals announced they were going to raise the top rate of income tax to 33 per cent in late 2015, there was a rush of filing by high-income earners to declare income at the lower rate).

Yet, rather than reduce the deficit and pay down debt in preparation for the next recession, creeping toward them as inevitably as mortality, the Liberals spent the lot. In 2017-18 expenses amounted to $332.6 billion — breaching the $300-billion mark for the second time — up $20.1 billion, or 6.4 per cent from 2016-17.

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92% of families face tax hike of over $2,200 beginning in 2019

“Canadian families will endure a significant tax increase and that tax bill will increase over time. The Trudeau government has talked a lot about cutting taxes for families. Based on the personal income tax changes they’ve already put in the case, we’ve found that’s not true for the vast majority of middle-class families.”

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Millionaires Urge Trump Not to Cut Their Taxes

Okay:

More than 400 American millionaires and billionaires are sending a letter to Congress this week urging Republican lawmakers not to cut their taxes.

The wealthy Americans, which include doctors, lawyers, entrepreneurs and CEOs, say the GOP is making a mistake by reducing taxes on the richest families at a time when the the nation’s debt is high and inequality is back at the worst level since the 1920s.

 

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Column: “Liberals committed to never-ending deficits, debt”

Read the whole thing:

That’s outrageous given that leading up to and during the early part of at the 2015 election campaign, Trudeau repeatedly pledged a Liberal government would run balanced budgets and hypocritically blasted the Harper Conservatives for running deficits, even though the Liberals demanded them in the wake of the 2008 global recession.

Then, in mid-campaign, Trudeau reversed himself, calling for “modest” deficits of $9.9 billion in 2016-17, $9.5 billion in 2017-18, $5.7 billion in 2018-19, with a $1 billion surplus in 2019-20, the final year of his election mandate.

Morneau’s fall economic statement exposes those numbers as a fabrication.

With the economy booming, according to Morneau, Trudeau now has a 2016-17 deficit of $17.8 billion, 80% higher than the $9.9 billion he projected during the 2015 election.

For the 2017-18 fiscal year, Trudeau now projects a $19.9 billion deficit, 109% higher than the $9.5 billion he predicted in 2015.

For the 2018-19 fiscal year, Trudeau now projects an $18.6 billion deficit, 226% higher than the $5.7 billion he predicted in 2015.

For the 2019-20 fiscal year, the final year of his election mandate, Trudeau now projects a $17.3 billion deficit, astronomically higher than the $1 billion surplus he predicted in 2015.

Morneau’s economic statement also predicts that in the first three years of the next Liberal government — should Trudeau win in 2019 — his deficits will be $16.8 billion in 2020-21, $13.9 billion in 2021-22 and $12.5 billion in 2022-23.

Morneau and Trudeau insist our roaring economy under their leadership enables them to spend billions of dollars more enhancing benefits for the “middle class” — apparently now defined as families with children under 18 and low-income workers — while lowering deficits compared to their predictions in their March, 2017 budget 

But all that means is that they predicted deficits then they knew were higher than the real numbers, so they can claim they’re lower than expected now.

This cynical game Liberals have played for decades doesn’t make them good money managers. It makes them lousy budgeters.

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REVERSAL: Trudeau Government Continues Surrender On Widely-Hated Tax Changes

The Trudeau government continues their desperate surrender on their widely-hated tax changes. The government has announced that they will scrap their plan to impose restrictions on the conversion of income into capital gains. The policy was massively opposed by many, including family farmers, as it would have made it far tougher to transfer the business to the next generation.

The reversal comes after the government said they would also cut back on tougher policies on passive investment income.

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Trudeau does right thing but for wrong reason

The fact Trudeau now intends, albeit belatedly, to keep this promise that he made to voters in 2015 is a good thing.

What’s alarming is that Trudeau didn’t reverse course because it was the right thing to do.

He did it because he and Finance Minister Bill Morneau botched their initial presentation of their small business corporate tax reform plan so badly, the Liberals are worried it’s eating into their popularity, as suggested by several recent polls.

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Prime Minister Trudeau thinks Canadians achieve better lives through government dependence

To be clear, the CCB is a transfer program that fosters dependence on government; it’s not a policy that rewards hard work by allowing Canadians to keep more of what they earn. Essentially, the prime minister is saying the government will take more away from what you earn and give some of it back to certain families. This hardly fits with the government’s rhetoric on hard work and building a better life.

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