So huge, you wonder why it wasn’t the centrepiece of last week’s dead-on-arrival federal budget.

But the Family Tax Cut plan announced by Mr. Harper Monday in Saanich, B.C. wouldn’t come into effect until the federal budget is balanced, which could be years from now. Like pension splitting before it, splitting earned or other income for tax purposes would benefit only some families and be no help at all to singles, including single parents. To get the full benefit, even qualifying families would have to have a large income disparity between the higher and lower wage earners. Even then, a maximum of $50,000 of household income would be splittable for tax purposes .

. . .

In a blog Monday the Canadian Centre for Policy Alternatives (CCPA) cited Osgoode Hall Law School tax law expert to the effect [that] the biggest winners from income-splitting are higher-income male breadwinners: “A man can reduce his taxes by shifting them to the primary caregiver in the family, but he has no legal obligation to give her the actual income.”

The CCPA warns this “tax giveaway for affluent couples” will put a big dent in federal finances.

Posted by Elizabeth Monier-Williams, research communications officer, with files courtesy of YFile– 91ŃÇɫ’s daily e-bulletin

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Like many Liberal budgets before them, every one of the Conservative budgets since 2006 has announced an array of new subsidies to be delivered through the tax system. Though their individual price tags may seem modest, they add up to a major drain on revenues. This budget alone would reduce federal revenues by almost $300 million per year once the new personal tax credits are fully phased in.

Who will evaluate the impact of these new tax expenditures to see if they are encouraging more Canadians to pursue postsecondary education or volunteer firefighting, or have other salutary effects that help to justify their costs? Most likely no one, ever. Once enacted into law, these special rules will sit in the tax code indefinitely with no need to be examined or reapproved the way a direct spending program would be.

It is easy to add tax expenditures and almost impossible to remove them. This is why many tax policy experts call for “sunsetting” these rules, which gives them a limited lifespan subject to evaluation and reapproval.

It’s time for Canadian politicians and voters alike to grow up about tax expenditures. Little breaks may seem nice if you happen to be part of a favoured group, but ultimately they destroy simplicity and fairness for all of us.

Posted by Elizabeth Monier-Williams, research communications officer, with files courtesy of YFile– 91ŃÇɫ’s daily e-bulletin.

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The glittering lives of billionaires may seem like harmless sources of entertainment, the authors maintain, but such concentrated economic power reverberates throughout society, threatening the quality of life and the very functioning of democracy.

Brooks and McQuaig launch their new book today in Room 519 of the 91ŃÇÉ« Research Tower, from 12.30 to 2pm. They argue it’s no accident that the United States claims the most billionaires – but suffers from among the highest rates of infant mortality and crime and the shortest life expectancy, as well as the lowest rates of social mobility and electoral political participation in the developed world.

Our society tends to regard large fortunes as evidence of great talent or accomplishment, say Brooks and McQuaig. Yet the vast new wealth isn’t due to an increase in talent or effort at the top, but rather to changing social attitudes legitimizing greed and to government policy changes that favour the new elite.

For more information about the book, visit  website or read their op-ed about .

Republished courtesy of YFile– 91ŃÇɫ’s daily e-bulletin

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To prove his point he created a computer model that duplicated the modern Canadian economy. He then adjusted it so that three crucial elements – consumption, productivity, and population – gradually stopped growing after 2010. He shortened the workweek to four days, imposed higher taxes on the rich, provided more public services for the poor and imposed a carbon tax to provide government revenue. His model showed that within a couple decades things had changed.

The outcomes of Victor’s model were lower unemployment, a rise in standards of living and lower greenhouse gas emissions. The economy reached a steady state after a couple decades.

The complete article is available on the .

Posted by Elizabeth Monier-Williams, research communications officer, with files courtesy of YFile– 91ŃÇɫ’s daily e-bulletin.

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“Canadians know very little about taxes. And they don’t know that they don’t know,” says Daniel Collison, who teaches personal finance in the MBA program at the Schulich School of Business at 91ŃÇÉ«, in the Jan. 28.

“Some people have basic concepts, but they don’t know the true tax system,” he says. “It’s not taught anywhere, not formally.”

What Canadians need to understand, first and foremost, is that we have a graduated tax system, so that as incomes rise so do tax levels, says Collison, regional director of Investors Group in Markham.

Learn about the graduated tax rates, Collison says, by looking through the Web site at or any sizable accountancy firm. You will discover at what level different types of income are taxed, starting with your employment income, then investment income such as interest, dividends and capital.

“The tax return is probably one of the best tools I use for tax planning since it has all the opportunities to look at deductions and tax credits,” he says. “There isn’t a better single tool to work with than tax return.”

While the tax system is complex, Collison believes that it’s not beyond the understanding of the average person to pay attention to deductions and credits when filing income tax.

Republished courtesy of .

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