Maybe I’m just naive, maybe I just don’t pay attention, maybe pigs fly, but am I the only one that didn’t know this?
18 Replies to “So much for Tax-Free Retirement Savings”
One can purchase ETF’s (Exchange-Traded Funds) and avoid most of the GST on management expenses, since ETF MER’s are extremely low, sometimes as low as 0.17% in Canada (compared with mutual fund MERs of 2%.
A big issue, of course, is, if Ontario decided to harmonize the taxes, would all mutual fund owners nationwide have to pay the Ontario taxes? Would mutual fund companies have to go through the highly tedious process of providing rebate cheques to non-Ontario residents? Or maybe the mutual fund trusts would just do the sensible thing and move to Alberta where this nonsense isn’t likely to occur?
The main issuer of ETF’s in Canada is Barclays Global Investors, and the website is http://www.iunits.com. They can be bought extremely cheaply ($2 trades) through Interactive Brokers (www.interactivebrokers.ca). Why anyone would invest in traditional mutual funds with a big-bank high-priced broker is beyond me.
One thing I’d like to see the CPC announce: eliminate GST on a few basic items like personal hygiene products i.e. toilet paper and sanitary napkins. We don’t tax food and rent; surely the government doesn’t need to wet their beak every time a Canadian goes to the loo? Excuse me, but do we really need to tax poor peoples’ s**t tickets? Do the feds need money that badly?
In Europe, for example, it is not uncommon to have a two-tiered Value Added Tax: a base tax, and a higher tax for less essential items. To the extent that it is distortionary I’d call it a positive measure for the pulp and paper industry (Cornwall) and a tax break for rich and poor alike.
Mark, you can buy mutual funds through many banks with minimal fees. Is GST just on the brokerage fee? or on the fund’s management fees? or what? The article reads as if it is not, but sadly, it’s been years since I had spare cash to invest…
Mutual funds have a recurring fee, deducted from the assets of the fund on an ongoing basis, known as the “Management Expense Ratio”, or “MER” for short.
On typical mutual funds marketed in Canada, this fee is 2% of assets per year.
For instance, if the stock markets return 8% in a year, and the funds managers charge a 2% MER, you get to keep 6% of the gain. 2% of the gain is siphoned off.
The referenced blog refers to the fact that Ottawa taxes MERs. So not only do you lose 2% of your gains to your fund manager, but you lose another 0.14% to the Government of Canada.
0.14% may not seem much, but consider the impact of 0.14% on a half-trillion dollars worth of mutual fund investments. Do the math — it comes out to over $700 million dollars in taxes alone.
ETF’s minimize this problem because they have extremely low fees. Instead of MERs of 2%, many ETF’s have MERs of 0.2% or less. For example, the Barclays i60 XIU TSX60 ETF. 7% GST on a 0.2% MER is only 0.014%, which saves you not only a tax, but you aren’t paying huge managers fees.
This isn’t really a good forum for financial advice or planning, but if you are looking to invest, take a good read of http://www.bylo.org .
The only way you can live the good life in this country anymore is to have about 15% to 20% of your retirement income outside Canada. If you are a snowbird it’s even easier. A little surfing on the net will open a lot of avenues that are not at all risky.
So, an original thought of some years back which said; “How much money have you got? Send it to the tax-man. If you have any left after that, send it to Quebec.” is proven correct.
If we don’t get rid of these crooked B*****ds this time, there won’t be anything left to live on.
Down with the Liberals, and throw Quebec out of Canada.
I would like to see GST on everything but at a reduced rate. So tax the TP and food. We all have to buy it. The rich buy filet steaks, the poor regular ground beef so the rich would pay more GST thanthe poor. There is already a GST rebate program in effect for the working poor so it can be made larger. It would really simplify the system. Now salted peanuts GST, unsalted peanuts tax free. 6 doughnuts tax free, buy 1 doughnut pay GST. Buy $5 of stamps for overseas no GST, buy one stamp pay GST. We would then collect more tax from the wretches who work just for cash, like hookers and contractors.
Not that this is supposed to be a financial advice blog, but before everyone goes off and shuns professional managers and takes Mark’s advice to go it alone and simply buy cheaper ETF’s to save some tax. Take note of the fact that ETF’s will only match the performance (Good or Bad) of the index they track (TSX, S&P etc…). There is no active manager to decide if it’s a good thing to be in an investment or not.
Investing in ETF’s may be cheap but my money is on doing a little research and finding good managers that do well when the market is good and don’t blow up too bad when the market tanks.
I don’t mind paying 2% to manage my money if they can do this. For Example, in 2001 and 2002 the TSX lost 13.94% and 13.97% respectively. That means a $10,000 investment in Jan 2001 would be worth $7,404 at the end of 2002 (remember Nortel?). Investment Manager Kim Shannon’s Canadian Investment Fund ($4 Billion in assets) performed +8.9% and +0.0% for 2001 and 2002. A $10,000 investment would be worth $10,890 or a $3,486 difference. Did she get lucky ? You decide…Her 10 year average (after fees) is 13.7% vs 10.7% of the TSX.
Bottom line there are a number of managers that don’t add any value but if you do some research (or get an advisor to help you) there are some managers worth the higher fees they charge.
Resign, Goodale… Resign.
Librano$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
CARP says it got notice of Goodale announcement
Kathy Tomlinson, CTV News
Finance Minister Ralph Goodale denies anyone in his office leaked word of changes to income trust policy, even as one man told CTV News he was tipped off in a phone call from one of the minister’s senior advisors.
In the hours before Goodale announced that the federal government was increasing the tax credit on corporate dividends two weeks ago, there was heavier-than-usual trading in income trusts and dividend-paying stocks. That has fuelled speculation that some investors profited from an early warning.
Goodale has insisted all along that no advance word came from his office. “The Finance Department is very meticulous about these matters,” he said Tuesday. “There was no specific advance notice whatsoever.”
But a representative of Canada’s most influential seniors’ lobby group says he got a phone call on the morning of Nov. 23, several hours before the markets closed, and before Goodale made his announcement.
Protocol is that a finance minister never gives word of a policy change while the markets are still open.
“The day they made the announcement they phoned us and said something is going to be said,” the associate executive director of Canada’s Association for the Fifty Plus, William Gleberzon, told CTV News.
Gleberzon said the call came from a senior policy advisor in the finance minister’s office.
When asked what exactly he was told, Gleberzon indicated the specifics were vague, but the underlying message was clear.
“They said something was going to be announced later in the day. And we assumed that if they told us that … it would probably be something we’d be happy with.”
As approximately 400,000 senior citizens have a vested interested in the issue, Gleberzon said his group, known by the acronym CARP, had been in “constant contact” with the policy advisor to the minister. >>> http://www.rapp.org/url/?WXWRVVU3
ctv.ca
At least CTV isn’t trying to brush this off. And Goodale certainly wasn’t convincing in the interview I saw. I suspect that he knew the Libs would be punished for the loss sustained by his dumb remarks weeks before, and in the run up to an election, why not try to give some of that lolly back? Either that, or this is a new and more polished version of cash stuffed in envelopes that was funneled back to the Librano$, which I’m inclined to this is more likely. They’re probably in panic mode because they’ve been lying about the economy and will have to refurbish the coffers before the Tories expose them and their 12 years of thuggery.
Actually, turn things around a bit here. I agree that the GST is much hated, but it is actually a very efficient tax on consumption.
It is also a tax that can be avoided legally. If you don’t want to pay GST, don’t buy that new car, new furniture, etc. Or choose to reduce the tax you pay by buying something used.
Instead of reducing GST, it should be increased in favor of lowering income tax. If I were Stephen Harper, I would announce that GST will be raised to 10% in favor of introducing a lowered, flat income tax rate of 5%. No personal deduction, no brackets, just take your gross income, mulitply it by .05 and then send that amount to Shawinigan.
You want to offer a truly different position that the Liberals would never attempt? There it is.
peter:
if you want some proof on why you should be buying ETFs to the exclusion of all others, read “Againast The Gods”. It’s a book on the development of our knowledge of risk, probability, and systematic ways to measure, predict, and control them.
It has a few chapters on the random walk hypothesis, stating that the stock market or any one stock’s price change is a random value. There is a slight upward bias over time in the stock market to reflect economic growth, but beyond that all stock movements are random. It then goes on to analyse the performance of mutual fund managers.
Mututal funds are doomed to underperform the market as they have to outperform by their management fees and commissions (so 2% +) just to stay at even. Then you have to take into account human psychology (even among professionals) that leads them into being late to buy and late to sell, so that you buy higher and sell lower. something like 3/4s of managers thus underperform an index. Then there is your bias in chasing a “hot” manager, whose performance is also a random event and thus more likely to be down after a period of success than up (in that most streaks end).
So, in summation, active management is for suckers or very high net worth people. Small pools of capital with veryhigh risk toleranes can take advantage of arbitrage opportunities for a short while, but even in that segment of the market profits are being wrung out by an influx of money and people.
Don’t bet against the laws of averages: buy and hold a broad portfolio of ETFs. Get some US exposure, Canadian exposure, Asian and emerging markets exposure. Keep your portfolio balanced but otherwise stay in etfs for your capital fraction of your investments. Don’t trade them, just buy and hold, selling when you need the money. That’s the best way to grow your money.
This is criminal. And I don’t just mean the Liberals, I mean the alleged economists who were chirping and singing like canaries the other day, about what a wonderful tax the GST is because it “encourages savings”.
Here’s what they don’t tell you – probably because the economists are completely clueless – stoned on the intoxicating power conferred on them by Marxism and Keynesianism. But you don’t have to understand Marx or Keynes, or read a single economics textbook, to get a handle on what is happening here.
The socialist nanny state is a downhill economic slope, which consumes everything. There is nothing mysterious about the process: the welfare state takes people who would otherwise be productively creating goods and services and trading them to other people for goods and services, and turns them into parasites who consume goods and services, but produce nothing. There is no way to balance the number of parasites versus the number of productive citizens, because once the productive citizens figure out that they’re being bled, they focus their energies on figuring out how THEY can get on the gravy train; and the number of productive citizens gets lower and lower. It is an elementary fact of vertebrate behavior that one does not bust one’s tail to survive, if one can sit still and wait for food and comfort to be brought to one. The tax receipts taken from the labor of productive citizens therefore get smaller and smaller, and the required expenditures get larger and larger. This is what leads the rulers of the nanny state to start gobbling up not just the current income of workers, but the savings as well. No savings means that capital is not replenished, which means that there will be no investment new factories, tools, skills, etc. Because the workers’ savings represented delayed consumption, but the money has been confiscated, it also means that there will be even more parasites down the road.
But why would allegedly intelligent, educated leaders choose this suicidal path? Because the more desperate, impoverished people in their country, the more it enhances their power and prestige, as they project themselves as the “saviors” of the people whom they themselves drove into poverty. It’s an ego trip, and also a tremendously lucrative job, because the CEO and directors of Canada, Inc., the only organization in the country with significant cash flow, can divert a lot of dough into their own pockets and into the pockets of their family and friends.
And the direct theft of savings is not the only way of killing prosperity, or even the most harmful method. The real killer is inflation, which is the constant creation of new money right out of thin air, which destroys the value of any savings left over after the taxman is finished with them. Right now I see that the government admits that the money supply indicator M3 is growing 43% faster than the GDP! All those new dollars sloshing around now mean that whatever you manage to keep out of the taxman’s hands, and which you manage not to lose on bow-wow stocks and bond investments, will not purchase very much when you finally retire. Again, you don’t have to be an economist to understand this. If you spend all day picking apples and take them to town to trade them, wouldn’t you feel like a complete idiot if you find out that the townies with government jobs and who get welfare are walking around with bushels of apples that the government made for them in a replicator machine? Since you can’t afford to buy coal any more for your furnace, you’re going to go home and chop down your apple trees to burn.
Without a drastic change, there is no happy ending to this pathetic tale. No reduction of this tax by one percent or trimming of these benefits by one percent will make a significant difference, because the fundamental disincentives are not changed, and human behavior is what it is. I know that the Conservatives are a slightly better option than the Liberals, but they have utterly failed to recognize and articulate the actual situation. All the more disappointing when you consider that their leader is an economist, and an alleged free-market economist at that.
Are you “conservatives” courageous? Are you really interested in fixing things, or are you looking forward to eating dogfood and working in a shit job for a foreign company, until you die at age 69 on a waiting list for commie health care? Now that you understand the problem, do you really think that it is any kind of solution to put, say, a minority CPC government in place so that Monte Sjolberg can diddle the budget a little, eat a giant crap sandwich fed to him by the NDP and Bloc, and then claim that it’s an improvement because the taxes and subsidies are more “targeted” than they were under the Liberals?
C’mon you people … grow a pair. And start kicking these donkey politicians a little harder.
Invest in Quantative Analysis. The rest is for suckers.
Bob C.: “Instead of reducing GST, it should be increased in favor of lowering income tax. ”
Agreed, Bob, but politics is the art of the possible and I don’t believe it would be possible for the CPC to get elected on a platform to increase the GST.
While an increased consumption tax seems reasonable, within the context of an already bloated federal government with an extraconstitutional propensity to spend money on provincial matters it may not be the best policy option.
Public policies need to mesh together. If the rest of the Tory platform meshes well with their GST policy than I cna live with a 5% GST – even if it is suboptimal – because I still believe the CPC platform is better on the whole.
Harper says income tax cuts are coming. I’d like to see a flat tax of 15%, but what the hell do I know. I have no Nazi-leanings, but I want the BQ to make the Liberals disappear.
Harper announced tax breaks for small businesses yesterday, and for students today ($500 annual deduction for textbooks OR tools if an apprentice, and scholarships/bursaries up to 10k tax free). For some reason the only website with coverage on it is the CPC one & a little bit on mine. Zip at ctv or cbc. Very weird.
So I’m sure there are a few more goodies in there regarding taxes.
Candace, they’re doing it gradually because the morally/intellectually bankrupt Liberals have nothing new to offer, so the Tories aren’t giving away the store before they have to. Can’t help but laugh at all the media pundits who are saying, with a smirk, that the sponsorship scandal isn’t an issue, forgotten, people don’t care. My bet is that all bets will be off after Christmas in the lead-up to the election, and that all three opposition parties will be aiming their advertising at Adscam. Libs are thinking they’ve got it nailed and are headed for another majority.
One can purchase ETF’s (Exchange-Traded Funds) and avoid most of the GST on management expenses, since ETF MER’s are extremely low, sometimes as low as 0.17% in Canada (compared with mutual fund MERs of 2%.
A big issue, of course, is, if Ontario decided to harmonize the taxes, would all mutual fund owners nationwide have to pay the Ontario taxes? Would mutual fund companies have to go through the highly tedious process of providing rebate cheques to non-Ontario residents? Or maybe the mutual fund trusts would just do the sensible thing and move to Alberta where this nonsense isn’t likely to occur?
The main issuer of ETF’s in Canada is Barclays Global Investors, and the website is http://www.iunits.com. They can be bought extremely cheaply ($2 trades) through Interactive Brokers (www.interactivebrokers.ca). Why anyone would invest in traditional mutual funds with a big-bank high-priced broker is beyond me.
One thing I’d like to see the CPC announce: eliminate GST on a few basic items like personal hygiene products i.e. toilet paper and sanitary napkins. We don’t tax food and rent; surely the government doesn’t need to wet their beak every time a Canadian goes to the loo? Excuse me, but do we really need to tax poor peoples’ s**t tickets? Do the feds need money that badly?
In Europe, for example, it is not uncommon to have a two-tiered Value Added Tax: a base tax, and a higher tax for less essential items. To the extent that it is distortionary I’d call it a positive measure for the pulp and paper industry (Cornwall) and a tax break for rich and poor alike.
Mark, you can buy mutual funds through many banks with minimal fees. Is GST just on the brokerage fee? or on the fund’s management fees? or what? The article reads as if it is not, but sadly, it’s been years since I had spare cash to invest…
Mutual funds have a recurring fee, deducted from the assets of the fund on an ongoing basis, known as the “Management Expense Ratio”, or “MER” for short.
On typical mutual funds marketed in Canada, this fee is 2% of assets per year.
For instance, if the stock markets return 8% in a year, and the funds managers charge a 2% MER, you get to keep 6% of the gain. 2% of the gain is siphoned off.
The referenced blog refers to the fact that Ottawa taxes MERs. So not only do you lose 2% of your gains to your fund manager, but you lose another 0.14% to the Government of Canada.
0.14% may not seem much, but consider the impact of 0.14% on a half-trillion dollars worth of mutual fund investments. Do the math — it comes out to over $700 million dollars in taxes alone.
ETF’s minimize this problem because they have extremely low fees. Instead of MERs of 2%, many ETF’s have MERs of 0.2% or less. For example, the Barclays i60 XIU TSX60 ETF. 7% GST on a 0.2% MER is only 0.014%, which saves you not only a tax, but you aren’t paying huge managers fees.
This isn’t really a good forum for financial advice or planning, but if you are looking to invest, take a good read of http://www.bylo.org .
The only way you can live the good life in this country anymore is to have about 15% to 20% of your retirement income outside Canada. If you are a snowbird it’s even easier. A little surfing on the net will open a lot of avenues that are not at all risky.
So, an original thought of some years back which said; “How much money have you got? Send it to the tax-man. If you have any left after that, send it to Quebec.” is proven correct.
If we don’t get rid of these crooked B*****ds this time, there won’t be anything left to live on.
Down with the Liberals, and throw Quebec out of Canada.
I would like to see GST on everything but at a reduced rate. So tax the TP and food. We all have to buy it. The rich buy filet steaks, the poor regular ground beef so the rich would pay more GST thanthe poor. There is already a GST rebate program in effect for the working poor so it can be made larger. It would really simplify the system. Now salted peanuts GST, unsalted peanuts tax free. 6 doughnuts tax free, buy 1 doughnut pay GST. Buy $5 of stamps for overseas no GST, buy one stamp pay GST. We would then collect more tax from the wretches who work just for cash, like hookers and contractors.
Not that this is supposed to be a financial advice blog, but before everyone goes off and shuns professional managers and takes Mark’s advice to go it alone and simply buy cheaper ETF’s to save some tax. Take note of the fact that ETF’s will only match the performance (Good or Bad) of the index they track (TSX, S&P etc…). There is no active manager to decide if it’s a good thing to be in an investment or not.
Investing in ETF’s may be cheap but my money is on doing a little research and finding good managers that do well when the market is good and don’t blow up too bad when the market tanks.
I don’t mind paying 2% to manage my money if they can do this. For Example, in 2001 and 2002 the TSX lost 13.94% and 13.97% respectively. That means a $10,000 investment in Jan 2001 would be worth $7,404 at the end of 2002 (remember Nortel?). Investment Manager Kim Shannon’s Canadian Investment Fund ($4 Billion in assets) performed +8.9% and +0.0% for 2001 and 2002. A $10,000 investment would be worth $10,890 or a $3,486 difference. Did she get lucky ? You decide…Her 10 year average (after fees) is 13.7% vs 10.7% of the TSX.
Bottom line there are a number of managers that don’t add any value but if you do some research (or get an advisor to help you) there are some managers worth the higher fees they charge.
Resign, Goodale… Resign.
Librano$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
CARP says it got notice of Goodale announcement
Kathy Tomlinson, CTV News
Finance Minister Ralph Goodale denies anyone in his office leaked word of changes to income trust policy, even as one man told CTV News he was tipped off in a phone call from one of the minister’s senior advisors.
In the hours before Goodale announced that the federal government was increasing the tax credit on corporate dividends two weeks ago, there was heavier-than-usual trading in income trusts and dividend-paying stocks. That has fuelled speculation that some investors profited from an early warning.
Goodale has insisted all along that no advance word came from his office. “The Finance Department is very meticulous about these matters,” he said Tuesday. “There was no specific advance notice whatsoever.”
But a representative of Canada’s most influential seniors’ lobby group says he got a phone call on the morning of Nov. 23, several hours before the markets closed, and before Goodale made his announcement.
Protocol is that a finance minister never gives word of a policy change while the markets are still open.
“The day they made the announcement they phoned us and said something is going to be said,” the associate executive director of Canada’s Association for the Fifty Plus, William Gleberzon, told CTV News.
Gleberzon said the call came from a senior policy advisor in the finance minister’s office.
When asked what exactly he was told, Gleberzon indicated the specifics were vague, but the underlying message was clear.
“They said something was going to be announced later in the day. And we assumed that if they told us that … it would probably be something we’d be happy with.”
As approximately 400,000 senior citizens have a vested interested in the issue, Gleberzon said his group, known by the acronym CARP, had been in “constant contact” with the policy advisor to the minister. >>>
http://www.rapp.org/url/?WXWRVVU3
ctv.ca
At least CTV isn’t trying to brush this off. And Goodale certainly wasn’t convincing in the interview I saw. I suspect that he knew the Libs would be punished for the loss sustained by his dumb remarks weeks before, and in the run up to an election, why not try to give some of that lolly back? Either that, or this is a new and more polished version of cash stuffed in envelopes that was funneled back to the Librano$, which I’m inclined to this is more likely. They’re probably in panic mode because they’ve been lying about the economy and will have to refurbish the coffers before the Tories expose them and their 12 years of thuggery.
Actually, turn things around a bit here. I agree that the GST is much hated, but it is actually a very efficient tax on consumption.
It is also a tax that can be avoided legally. If you don’t want to pay GST, don’t buy that new car, new furniture, etc. Or choose to reduce the tax you pay by buying something used.
Instead of reducing GST, it should be increased in favor of lowering income tax. If I were Stephen Harper, I would announce that GST will be raised to 10% in favor of introducing a lowered, flat income tax rate of 5%. No personal deduction, no brackets, just take your gross income, mulitply it by .05 and then send that amount to Shawinigan.
You want to offer a truly different position that the Liberals would never attempt? There it is.
peter:
if you want some proof on why you should be buying ETFs to the exclusion of all others, read “Againast The Gods”. It’s a book on the development of our knowledge of risk, probability, and systematic ways to measure, predict, and control them.
It has a few chapters on the random walk hypothesis, stating that the stock market or any one stock’s price change is a random value. There is a slight upward bias over time in the stock market to reflect economic growth, but beyond that all stock movements are random. It then goes on to analyse the performance of mutual fund managers.
Mututal funds are doomed to underperform the market as they have to outperform by their management fees and commissions (so 2% +) just to stay at even. Then you have to take into account human psychology (even among professionals) that leads them into being late to buy and late to sell, so that you buy higher and sell lower. something like 3/4s of managers thus underperform an index. Then there is your bias in chasing a “hot” manager, whose performance is also a random event and thus more likely to be down after a period of success than up (in that most streaks end).
So, in summation, active management is for suckers or very high net worth people. Small pools of capital with veryhigh risk toleranes can take advantage of arbitrage opportunities for a short while, but even in that segment of the market profits are being wrung out by an influx of money and people.
Don’t bet against the laws of averages: buy and hold a broad portfolio of ETFs. Get some US exposure, Canadian exposure, Asian and emerging markets exposure. Keep your portfolio balanced but otherwise stay in etfs for your capital fraction of your investments. Don’t trade them, just buy and hold, selling when you need the money. That’s the best way to grow your money.
This is criminal. And I don’t just mean the Liberals, I mean the alleged economists who were chirping and singing like canaries the other day, about what a wonderful tax the GST is because it “encourages savings”.
Here’s what they don’t tell you – probably because the economists are completely clueless – stoned on the intoxicating power conferred on them by Marxism and Keynesianism. But you don’t have to understand Marx or Keynes, or read a single economics textbook, to get a handle on what is happening here.
The socialist nanny state is a downhill economic slope, which consumes everything. There is nothing mysterious about the process: the welfare state takes people who would otherwise be productively creating goods and services and trading them to other people for goods and services, and turns them into parasites who consume goods and services, but produce nothing. There is no way to balance the number of parasites versus the number of productive citizens, because once the productive citizens figure out that they’re being bled, they focus their energies on figuring out how THEY can get on the gravy train; and the number of productive citizens gets lower and lower. It is an elementary fact of vertebrate behavior that one does not bust one’s tail to survive, if one can sit still and wait for food and comfort to be brought to one. The tax receipts taken from the labor of productive citizens therefore get smaller and smaller, and the required expenditures get larger and larger. This is what leads the rulers of the nanny state to start gobbling up not just the current income of workers, but the savings as well. No savings means that capital is not replenished, which means that there will be no investment new factories, tools, skills, etc. Because the workers’ savings represented delayed consumption, but the money has been confiscated, it also means that there will be even more parasites down the road.
But why would allegedly intelligent, educated leaders choose this suicidal path? Because the more desperate, impoverished people in their country, the more it enhances their power and prestige, as they project themselves as the “saviors” of the people whom they themselves drove into poverty. It’s an ego trip, and also a tremendously lucrative job, because the CEO and directors of Canada, Inc., the only organization in the country with significant cash flow, can divert a lot of dough into their own pockets and into the pockets of their family and friends.
And the direct theft of savings is not the only way of killing prosperity, or even the most harmful method. The real killer is inflation, which is the constant creation of new money right out of thin air, which destroys the value of any savings left over after the taxman is finished with them. Right now I see that the government admits that the money supply indicator M3 is growing 43% faster than the GDP! All those new dollars sloshing around now mean that whatever you manage to keep out of the taxman’s hands, and which you manage not to lose on bow-wow stocks and bond investments, will not purchase very much when you finally retire. Again, you don’t have to be an economist to understand this. If you spend all day picking apples and take them to town to trade them, wouldn’t you feel like a complete idiot if you find out that the townies with government jobs and who get welfare are walking around with bushels of apples that the government made for them in a replicator machine? Since you can’t afford to buy coal any more for your furnace, you’re going to go home and chop down your apple trees to burn.
Without a drastic change, there is no happy ending to this pathetic tale. No reduction of this tax by one percent or trimming of these benefits by one percent will make a significant difference, because the fundamental disincentives are not changed, and human behavior is what it is. I know that the Conservatives are a slightly better option than the Liberals, but they have utterly failed to recognize and articulate the actual situation. All the more disappointing when you consider that their leader is an economist, and an alleged free-market economist at that.
Are you “conservatives” courageous? Are you really interested in fixing things, or are you looking forward to eating dogfood and working in a shit job for a foreign company, until you die at age 69 on a waiting list for commie health care? Now that you understand the problem, do you really think that it is any kind of solution to put, say, a minority CPC government in place so that Monte Sjolberg can diddle the budget a little, eat a giant crap sandwich fed to him by the NDP and Bloc, and then claim that it’s an improvement because the taxes and subsidies are more “targeted” than they were under the Liberals?
C’mon you people … grow a pair. And start kicking these donkey politicians a little harder.
Invest in Quantative Analysis. The rest is for suckers.
Bob C.: “Instead of reducing GST, it should be increased in favor of lowering income tax. ”
Agreed, Bob, but politics is the art of the possible and I don’t believe it would be possible for the CPC to get elected on a platform to increase the GST.
While an increased consumption tax seems reasonable, within the context of an already bloated federal government with an extraconstitutional propensity to spend money on provincial matters it may not be the best policy option.
Public policies need to mesh together. If the rest of the Tory platform meshes well with their GST policy than I cna live with a 5% GST – even if it is suboptimal – because I still believe the CPC platform is better on the whole.
Harper says income tax cuts are coming. I’d like to see a flat tax of 15%, but what the hell do I know. I have no Nazi-leanings, but I want the BQ to make the Liberals disappear.
Harper announced tax breaks for small businesses yesterday, and for students today ($500 annual deduction for textbooks OR tools if an apprentice, and scholarships/bursaries up to 10k tax free). For some reason the only website with coverage on it is the CPC one & a little bit on mine. Zip at ctv or cbc. Very weird.
So I’m sure there are a few more goodies in there regarding taxes.
Candace, they’re doing it gradually because the morally/intellectually bankrupt Liberals have nothing new to offer, so the Tories aren’t giving away the store before they have to. Can’t help but laugh at all the media pundits who are saying, with a smirk, that the sponsorship scandal isn’t an issue, forgotten, people don’t care. My bet is that all bets will be off after Christmas in the lead-up to the election, and that all three opposition parties will be aiming their advertising at Adscam. Libs are thinking they’ve got it nailed and are headed for another majority.