A few days ago, ss I was driving on yet another gift buying frenzy (Orthodox Christians usually give their gifts during the New Year to avoid making Christmas corporate), I couldn’t help but notice a rather odd advertisement on the radio. It was an ad from the government of Canada, advertising that there is a tax cut (another percent on the GST). The ad was telling us that we could save another percent on a purchase of a home, car, or whatever.

Not only did I find it insulting and repulsive that Harper is using our tax money for pre-campaign purposes. It was clear to me that it was a campaign ad because it didn’t contain any real information. The irony is of courase is that the pre-campaign ad, paid for by our taxes, is about lowering taxes. I wonder if lower taxes will mean less freebie campaign ads for PC’s.

But I found it rather depressing because I am currently neck high into debt, paying $10,000 in tuition fees every year for my B. Com. at UofT, not including living expenses or school supplies and that ad just listed the things that I won’t be able to afford for a long time.

Whats more is that the mainstream media, bloggers, or opposition is not asking any questions at the time when its crucial to hear an alternative. The tax cuts in the mini-budget are set to cost about $60 billion over five years. What does that mean for our debt? What does it mean for our environmental initiatives to combat global warming? What does it mean for our social transfers?

And its not all tax cuts, Harper has also brought in a slight increase in so-called payroll taxes.

“The taxpayers federation estimates that employees will pay an additional $50.43 in 2008 on employment insurance and the Canada Pension Plan, while employers will pay $46.02 more per worker.” - CBC

As usual, the devil is always in the detail. That looks like another regressive tax, something we need less off.

I think Canadians want tax cuts, but we also want to take the lead on global warming, invest in education, and bring down Canada’s debt. Any tax cuts, need to address how to pay for those priorities as well. Where is the opposition on this? There does not seem to be any reaction on http://www.ndp.ca/ nor http://www.liberal.ca/headlines_e.aspx

The opposition needs to get back from the holidays and put on their critical thinking hats… otherwise, we might as well forget about elections if this budget passes.

Its possible to ask questions without falling into a political grave when it comes to tax cuts… just takes some courage to present an alternative, and I think thats what Canadians want from their opposition.

In the mean time, here is all you’ll basically read for now:

 

New year brings tax savings for Canadians and businesses

Published: Sunday, December 30, 2007 | 5:25 PM ET

Canadian Press: Julian Beltrame, THE CANADIAN PRESS

OTTAWA - Canadian workers, consumers and businesses will all start paying lower taxes starting New Year’s Day.

Finance Minister Jim Flaherty’s surprise mini-budget in October ushered in $60 billion in tax cuts over five years, with many of those reductions coming into effect on Jan. 1.

According to the Canadian Taxpayers Federation, most Canadian families can expect to reduce their tax burden by well over $1,000 by the end of 2008 due to the combined savings from a lower GST, lower federal income taxes and provincial measures.

That is good news for Canadians, who Flaherty says are overtaxed, but also for the economy, says Dale Orr, managing director of Global Insight Canada.

Both Prime Minister Stephen Harper and Flaherty have warned in year-end interviews with numerous news outlets that the Canadian economy is entering a year of turbulence.

They blame tight financial markets and the fallout from a slowing U.S. economy, which will affect Canada’s export-oriented industries.

Many economists have forecast Canada’s growth to slow in 2008, particularly in the first half of the year.

“So the timing has turned out to be quite fortuitous,” said Orr of the stimulative nature of the tax cuts.

“But I would hope Flaherty doesn’t get into the business of trying to hit the economic cycle, because he’ll probably miss.”

The most dramatic single tax saving most Canadians will realize in 2008 will come when they file their income tax return this spring.

Restoring a tax measure first introduced by the previous Liberal government two years ago, Flaherty cut the lowest tax bracket to 15 per cent and raised the personal exemption to $9,600, effective last January.

That means the government has been deducting more than necessary from pay stubs throughout the year and filers will be able to recoup the difference in one lump sum with their tax returns.

For a single taxpayer earning $45,000 and more, the payoff will be $223.

Taxpayers in the same tax bracket will save an additional $272 in 2008 because of the same measure, with the change reflected in their pay stubs starting Jan. 1. If paid biweekly, an employee should expect to take home slightly over $10 in additional net pay on each payday.

Lower-income Canadians will not realize as much savings. For instance, an individual earning $15,000 annually will wind up paying $121 less in taxes.

The other headline grabber from the mini-budget - reduction of the GST tax rate on goods and services to five per cent from six - also goes into effect New Year’s Day.

Most Canadians are likely to gain between $120 and $200 in small increments with most purchases throughout the year. But the savings will be dramatic with purchases of big ticket items like homes, automobiles, furniture or appliances.

When rebates on lower-priced homes are included, a family purchasing a new $300,000 home will save $1,920 in GST, rising to $5,000 on a $500,000 residence, according to the finance department. A family spending $30,000 on a new minivan will save $300.

In addition, residents of Quebec, British Columbia and Newfoundland will realize even deeper tax cuts in 2008 as a result of provincial tax changes.

According to the taxpayers federation calculation, the biggest cuts are in Quebec, where a single taxpayer earning $45,000 will wind up with $437 more 2008, in addition to what they gain from the federal side, rising to $1,138 for an individual earning $80,000.

The exception is New Brunswick, where provincial tax increases mean individuals earning more than $52,700 will wind up paying more income tax overall.

Also looking forward to the new tax year will be Canada’s businesses.

Starting Jan. 1, Canada’s corporate tax rate will be trimmed to 19.5 per cent from the current 22.12 per cent. This rate is slated to come down each subsequent year until it is reduced to 15 per cent on Jan. 1, 2012.

As well, the tax rate on small businesses with incomes under $400,000 drops to 11 per cent from the scheduled 11.5 per cent rate.

Of course, what the government giveth, it often takes away and Ottawa has also brought in a slight increase in so-called payroll taxes.

The taxpayers federation estimates that employees will pay an additional $50.43 in 2008 on employment insurance and the Canada Pension Plan, while employers will pay $46.02 more per worker.

© The Canadian Press, 2007