Maxime Bernier releases his income tax policy.
Highlights:
- Raise the Basic Personal Exemption to $15,000
- Eliminate two tax brackets so that income from $15,001 to $100,000 is taxed at 15%
- Tax income over $100,001 at 25%
- Eliminate boutique tax credits that serve no public policy purpose.
Makes sense to me! I likey. To me this is the guy that should lead the party. So far, the only one who has laid out a plan that is optimistic and full of common sense.
(which doesn’t bode well for him – the people chose an airhead with no ideas)
Scott
Eliminate boutique tax credits that serve no public policy purpose.
They’re all “boutique tax credits that serve no public policy purpose”. Social engineering via the tax code is bad policy no matter what justification gets used.
A single flat rate tax with no exemptions, credits or exceptions is the only fair income tax system, assuming you must tax income anyway.
While I applaud any effort to reduce personal income tax, Bernier’s key points do not simplify the tax system, they just reduce federal tax payable.
In order to significantly reduce federal tax payable he will have to outline the other side of the balance sheet – program cuts. This will make him unelectable.
This is the same old crap from the conservatives and this is why I no longer vote conservative or donate to the party. It’s just a different kind of moonbeam. We don’t need moonbeams, we need real change.
The reality of today is that no party will form a majority government by offering to cut government programs.
How about:
1. elimination of family trusts
2. tax dividend, capital gain and personal income at the same rate
3. cancel the carbon tax
4. continue the reduction in corporate tax rates
5. eliminate the ridiculous high salaries and stock option programs of corporate hacks
6. introduce a founder share structure to newly created businesses that have preferential tax rates in order to promote real company creation.
7. limit the maximum pension that anyone in the government can receive to $10,000/mn
8. tie federal transfers for health care and education to the rate of inflation
9. stop internal funding transfers to intra-governmental agencies (groups that receive their core funding from the government and then solicit the rest from private industry).
Good luck with the “I’ll cut taxes” mantra. Won’t work.
What kind of Canadian are you?
http://angusreid.org/canadian-values-index/
On the brighter side Scott, Bernier seems to be the only current Tory leadership contender who seems to have paid attention to the importance of “sunny ways” and a positive attitude to getting Trudeau Jr elected. He’s not attacking anyone or coming off as “mean”, and that’s probably gonna matter.
I question where he’s going to come down on thornier issues like immigration, but best he establish a beachhead on the economic issues first before drawing fire on other fronts.
That’s a good shopping list, Steve, on top of Bernier’s proposals.
Glad you aren’t following nance minister.
Family trusts provide very import means of asset management on behalf of individuals who aren’t able to manage them themselves and they dovetail with trust laws that exist all around the world.
Taxing capital gains the same as low risk income sources like dividend and interest is to discriminate against risk taking. It’s anti capitalist.
Executive compensation is decided upon by shareholders. Are you advocating government interfere with shareholder rights?
Education and healthcare are PROVINCIAL JURISTICTION the Feds shouldn’t be funding either.
Dividends shouldn’t be taxed at all at the personal level. Dividends are paid out of after tax corporate income. As a shareholder, you already paid tax on the corporate income before you got the dividend.
Under the last conservative government, the corporate tax rate went down, and the dividend tax rate increased. They are still getting the same tax from corporate profits except now its paid at the shareholder level instead of at the corporate level.
$100 g is waaayyy too low for the max tax break; it should be $500g
Why should someone making 95g be taxed 10% less than he who makes 100g? That makes the take home higher for the guy making less!
What a bunch of bs!
I agree. After the Conservatives lost the election last year, I said they needed a more optimistic tone. A hopeful tone. They allowed themselves to be painted as “tired angry white men” which isn’t true, but hey it happened. Maybe it would have been all for not anyway, seeing as how the deck was stacked so firmly against them. Bill Fife and the like were going to get the Libs elected, come Hell or High Water. I just think that common sense, lower tax, increased liberty is the best system. If so, lets CHEERFULLY evangelize! Could be wrong, but I feel HUNKY DUNKY
If you want to fix the mess do two things, understanding both will take twenty years to fully implement:
Consistently and ruthlessly cut revenues to government partly by phasing out personal and corporate income tax entirely, and
Replacing it with a value added tax, which the GST is. The more you make, the more you spend, the more you pay. All income is tax free.
You consume, you pay. No/few exemptions. Use the bureaucracy to manage the transition (example: seniors who have paid income tax all their life and have arranged their affairs legally to reduce tax in retirement, can’t be wacked with a full VAT, somewhere around 20%).
Bottom line: give the state less money, then there’s less it can do (to us). Focus on the poor, not the middle class, and not political groupies.
Use tax debit system to ensure taxpayers receive better value from government services, but their cost is properly reflected.
The Dept of Finance, not having that many bodies, can borrow from the legions of as yet unretired civil servants freed, from statist overlordism.
Don’t turn it into a revolution because it will be a devolution back to our roots of good government, which nobody talks about any more.
Then the progressives will be left arguing big government is good government.
“This is the same old crap from the conservatives and this is why I no longer vote conservative or donate to the party.”
So you’re one of the reasons the Liberals got a majority. Good job.!
Not how it works. If you make 100,001 then 99,999 of that is taxed at 15%. $2 is taxed at 25%. Similarly if you make $200,000 the first $99,999 is taxed at 15%, the rest is taxed at 25%.
They all talk, but when in power they chicken out. I don’t bother anymore either. I am more interested in the us election … it is more important than the sock hop we have in Ottawa
This seems reasonable, but I would NEVER endorse any new tax plan that didn’t include one massively serious dose of loophole closures. But, I assume the Cons don’t want to piss off their wealthier donors any more than the sleazy Libs do. Lib or Con politicians, I see no real difference between them anymore.
In that spirit, I suggest we rename the current “Official Opposition” to a more accurate “Official Aquiescers”.
Man, I have ZERO confidence in the current crop of so-called Conservatives in Ottawa.
Where’s his immigration policy?
Eliminate income tax. Tax people on what they consume. Tax rates would be zero for necessities like basic food and increase to very high taxes on luxuries.
Gord,
The primary reasons for a family trust are wealth redistribution at lower tax rates and wealth preservation. I have nothing against them other than the fact that they only benefit the wealthy. I use a family trust myself. It is efficient tax planning. But if you want serious reductions in personal income tax rates there are certain things you have to let go.
Taxing capital gains the same as personal income makes sense because a plumber with his shingle out for business is taking risk just as much as the investor. The reward for risk should be in the return not in the tax treatment.
Executive compensation is a joke. There is no way a CEO of a bank that has been around for 150 years should make the same amount of money as a start-up venture like RIM that made it big. Most CEOs are just placeholders. They do not deserve $15 million per year.
Saying dividends are double taxed is not understanding the tax code. Tax rates to individuals on dividends is lower than earned income and there is a dividend tax deduction.
This is the problem. Everyone wants lower taxes. No one wants to give up their loopholes. Bernier offers the hope of lower taxes without the explanation of how the loss in government revenue will be dealt with. He is the same as our current candyman Trudeau. They only offer half the answer, the one that makes you happy.
Bernier is the only guy who understands that you need to sell the fiscal conservative ideas by explaining the advantages of them, just stating that something is good is not enough.
Maybe you shouldn’t have to explain simple economic principles, but the sad fact is that it is necessary to do so to persuade people to vote for you.
No the primary reason trusts were created was to allow management of monies on behalf of others. That they are used for tax planning is an entirely different issue that does not require their elimination
What executives get paid is the business of stockholders – not you or I and certainly not the federal government.
The plumber example is bogus. He is taking dividends as a from of income he has earned (again tax planning) not passive income from a capital investment.
I said nothing about double tax on dividends. The dividend tax credit largely addresses that issue.
I want simpler taxes. I want what ted Cruz was proposing. Bernier is being about as aggressive with tax policy as one can be in Canada with a hope of actually getting elected. That he can even be that aggressive is testament to how much pmsh and Flaherty did to move the goalposts when they were in power.
No, value added taxes grossly increase prices which, as always, affects poor voters more. Taxing taxes that have taxed taxes already.
Sales tax is the way to go. No personal, no corporate (which is only passed onto consumers anyways). Straight 7% sales tax on all items. Wouldn’t even need to have tax forms, put thousands of parasites out of work, likely kills 15% of gov’t spending straight off the top by eliminating almost an entire department. But there’s no social engineering or class warfare in that so no dice.
Exactly!! Eliminate income tax and make the GST high enough to provide equal revenue.
I think all the players are in the room now. Like the Repubs, a good bunch all. I think Bernier and Leich are the ones to watch. I’d be happy with each, but Bernier is the only one who could possibly beat P’tit P’tate next election.
Final comment. Maxime wants to simplify the tax code by having two tax brackets, the upper being 25% (federal, 38% combined) for those earning over $100,000. People who earn a lot of money don’t need a lower personal tax bracket – they pay less than 30% tax already. They use all the other tax loopholes that have been put in place over the years by both federal parties.
The net result is the middle class – those people earning a decent wage but not enough to afford a decent accountant ($50,000 – $150,000) are the ones paying most of the tax in our country. The tax system is set up to get these people.
I don’t mind using a family trust to redistribute income or taking dividends instead of salary or consulting for shares instead of pay and later selling the stock and paying less tax because a capital gain tax is lower and I took more “risk” than the plumber. I do this already.
I’m just saying if you want to fix the tax system, if you want to get elected, Maxime Bernier’s plan will not get you to either goal. In the meantime Justin Trudeau raises taxes and is wildly popular. Just sayin…
A final final comment. What happens if a federal government reduces its tax rate? It is likely to be followed by a corresponding increase in the provincial rate because we all know the provinces don’t collect enough taxes (as I recall McGuinty stating when he stopped lowering corporate taxes, what, 10 years ago? and his party is still in power?).
If Bernier wants to get elected he should focus on government corruption and lack of accountability. Or make meaningful closures to loop holes in our tax system. Increasing the basic personal exemption from $11,500 to $15,000 isn’t going to make it.
Internally (to the country) items will be 7% taxed with each chang eof hands of components. Resultin in a much larger tax at the cosumer point.
He could pledge no taxes and it wouldn’t make a lick of difference to me. I’ve never voted for a Frenchman and I can’t think of any conceivable reason to start now.
(Marxist idea of) Tax brackets are the reason so many people are not able to get out of a debt by putting more effort to pay them off.
That doesn’t work. Greece and others (Newfoundland) proved that. Very high vats (approaching 20% or more) drives the economy underground – barter and cash and false receipts become the norm)
Cruz has it right – a gross revenues tax collected at source not at the till is simplest and much harder to corrupt.
That doesn’t work Gord; don’t take comments out of context. What part of “Eliminate income tax” was difficult for you to grasp? None of your examples meet that primary criterion. Details are important.
Maxime is the closest thing to a libertarian running for the Con leadership.
Simplifying taxes is a reasonable idea as is exempting the first 15K of income. The hard part is not the revenue side, the hard part is actually cutting the size of government.
I knew that Harper and Flarety were in the tank when, in the first budget, they talked about containing government spending in terms of percentage of GDP. Which would mean, in a healthy economy, government spending rising every year. I will start actually sending money to Maxime the day he says he will cut, in absolute terms, the federal government’s spending. Even a point or two would be a step in the right direction.
At the moment, with stupid low interest rates, there is an argument for borrowing for real infrastructure projects. But those are capital costs. Cutting program spending needs to be a priority. I think Maxime gets that, I don’t think any of the other Tories have a clue.
Any tax cut is always good because it gives government less money to waste. Any money left in private hands will always be used more efficiently than by the state. The rest is details, really.
@indian:
“Why should someone making 95g be taxed 10% less than he who makes 100g? That makes the take home higher for the guy making less!”
Please tell me that you were joking and that you understand how the proposed income tax would work.
@Steve:
“Executive compensation is a joke. There is no way a CEO of a bank that has been around for 150 years should make the same amount of money as a start-up venture like RIM that made it big. Most CEOs are just placeholders. They do not deserve $15 million per year.”
Nice exercise in envy politics you got there. “Deserve” who the f*** are you to decide what does a CEO of a private institution deserve? None of your business what they make and how adequate it is given their responsibilities and qualifications. Those are private institutions and therefore none of your business. Period, end of story.
Wrong, it’s a graduated tax rate. You only pay the higher rate on the dollars above $100G. So, no matter what, if you earn more, you take more home (which is how our taxes work now btw).
The real solution is to stop source deductions, if they want it they can come get it.
Always dissing CEOs. I’ve had the good fortune to meet a number of CEOs, and my general observation is that they are above average in work ethic, above average in intelligence, and are genuinely concerned about not only the fortunes of the company they work for, including its employees and customers, but also the fortunes of the public impacted by the operation of the company. They may make more money than you or I do, but they have years of lower paid experience behind them, and they know that the twilight of their career is just a few years away. And very few of them make $15 million a year.
If you want to discuss the grossly overpaid, how about Celine Dion, with her personal fortune of better than a quarter billion dollars, whose main schtik is lamenting her late husband? How about the twenty-something Blue Jay making millions a year tossing a little ball to another of his ilk, but can’t formulate a coherent answer to a softball question? Or a Vancouver Canuck skating home with seven million a year while rated to finish last in the league? Those guys pick your pocket to the tune of a couple of hundred dollars for a Saturday evening’s entertainment. But you never complain about them.
Do you get your talking points from Huffpo or the Daily Worker? Remember, when the “rich” are taxed out of existence, there will only be you to support the bureaucracy. Good luck with that.
Always dissing CEOs. I’ve had the good fortune to meet a number of CEOs, and my general observation is that they are above average in work ethic, above average in intelligence, and are genuinely concerned about not only the fortunes of the company they work for, including its employees and customers, but also the fortunes of the public impacted by the operation of the company. They may make more money than you or I do, but they have years of lower paid experience behind them, and they know that the twilight of their career is just a few years away. And very few of them make $15 million a year.
If you want to discuss the grossly overpaid, how about Celine Dion, with her personal fortune of better than a quarter billion dollars, whose main schtik is lamenting her late husband? How about the twenty-something Blue Jay making millions a year tossing a little ball to another of his ilk, but can’t formulate a coherent answer to a softball question? Or a Vancouver Canuck skating home with seven million a year while rated to finish last in the league? Those guys pick your pocket to the tune of a couple of hundred dollars for a Saturday evening’s entertainment. But you never complain about them.
Do you get your talking points from Huffpo or the Daily Worker? Remember, when the “rich” are taxed out of existence, there will only be you to support the bureaucracy. Good luck with that.
Tax brackets are by far the *least* complicated part of the tax code.
Utilizing permanent insurance for young grandchildren to skip a generation of taxation is another tax reducing idea which every grandparent can utilize.
The wage slave pays half the freight in this country. The evil one percenters pay the other half and provide the train. One third gets a free ride.
Government grows itself by increasing taxes and confiscating wealth.
They pretend the rich will just got to the basement and grab some gold they’ve got hidden away (thanks Bill Whittle).
Government deflates the value of work and investment, and it’s long past the point of providing for civil society, now it feeds itself.
That’s what needs to stop, it’s choking our economy, slowly yes, but surely.
Until we’re forced to have an actual discussion about good government, to which we are constitutionally entitled, it can only get worse.
The Hillary Clinton economic and security gong show about to happen south of the border will make Justin’s follies but an opening act.
Globalism means we adopt global standards, that apparently includes their economic policies and leadership.
Sure, bankrupt statism and authoritarian despots. Sure we should strive for that. If we really take firm taxaction, to the point of driving the economy to a standstill, we could spare the earth on-thousandths of a degree projected, adjusted global warming.
Think of how great that would make us. Any questions? We’re being ruled by economic nincompoops.
Has anyone here looked seriously at the Fair Tax?
https://fairtax.org/index
I’m not up to date on it, but I did read a couple of books on it a few years back.
To me, it looks like the perfect tax system. I’d be interested in some comments about whether or not this could work in Canada.
He should add “Make a law forbidding provinces from levying income tax, and limiting sales taxes to 10% on ANY product, including booze and tobacco, and forbidding government from monopolizing the delivery of ANY product or service.”
Call me cynical, but it doesn’t matter what Bernier or any of the other potential leaders say right now. Because they will either fail to get elected with a majority OR they will get their majority and change their tune the very next day. Over and above that, if Canadians can elect someone as useless and offensive as Justin Trudeau as their PM, then it’s time to withdraw. Time to hike back to the fortress of solitude. Get out in the front yard and hang the flag upside down. Get in the hypersleep chamber and set the controls to time period, indefinite. It used to be when the moochers figured out they can vote themselves more government largesse, the country was doomed. We’ve reached that point and gone beyond it now. Now the electorate has moved on to voting themselves legal weed and gone totally comatose.
I think you have missed my point. I am not against the rich. I have met CEOs. They do work harder than the average person. Forty-five times harder? A thousand times harder?
What has happened is CEO (and other senior management positions) compensation has become disconnected from their role. CEOs make a fortune even when the company loses money. It is a coveted position that is not rewarded by merit, but by friendships, family connections and politics. What is worse is now the semi-government companies (Ornge, Hydro One etc) now compensate their management using the rules of private industry, justifying the system in place and reaping undeserving financial rewards to be paid out of our taxes.
In 2009 during the financial crisis the CEOs of GM and Chrysler flew to Washington in their private jets to discuss a financial bailout for their companies. Neither CEO founded an automaker. They simply provided continuance – a management style that was set to fail the moment a problem arose. I would have fired them both, denied them share exercising rights and lump sum pension payouts plus confiscated their private jets in return for a bailout. Do you think they would accept that deal, or fly back home and make some tough decisions that protected their spoils?
We need special treatment for people who start companies like RIM, Shopify etc. We also need limits on how much public company management rewards itself, especially banks, investment houses and insurance companies which benefit more from external factors than internal brilliance.
Why lower corporate taxes when senior management just takes more of the spoils? Take a look at Barrick Gold (or any gold producer for that matter). How much of a dividend did they pay when gold was over $1,300/oz and how much did their total compensation increase by? When gold was $300 the gold CEOs needed at least $500 to break even. At $500 gold they needed $800. At $800 gold they needed $1,200. At $1,300 gold Barrick continues to lose money. They lost money in 2011, 2012, 2013, 2014, probably 2015. Compensation to senior management in 2013 was $45 million, $39 million in 2014. In 5 years Barrick’s stock price ABX has fallen from $50 to $16 even as god hangs in at around $1,200 – $1,300.
None of the directors or senior managers founded the company. It lost $10 billion in 2013. Yet management compensation hangs in at $40-$50 million per year. Is this top drawer management?
http://www.barrick.com/files/annual-report/Barrick-Annual-Report-2014.pdf
Apparently it is.