Canadian Taxpayers Federation views - 2009

2009 was a very dark year for taxpayers. Hopefully 2010 will be different.

Lots of Taxpayer Abuse in 2009
By Canadian Taxpayers Federation Friday, December 18, 2009

Most disappointingly, the Harper government, encouraged (some say forced) by both the NDP and Liberals, broke their three month old election promise to run a balanced budget and are on pace to run a $56 billion deficit - the largest deficit in Canada’s history.

Just about everyone and every project seems to have received their “stimulus” spending, code for passing on higher taxes to future generations.

The feds and the Ontario government purchased 11.7 per cent of GM and 2 per cent of Chrysler. That decision cost taxpayers $14.27 billion, despite polls which showed a majority of Canadians opposed the bailout. The fact that not a single MP in Ottawa stood up to oppose the auto bailouts speaks volumes to the need for democratic reform.

The amount spent by MPs on flyers, skyrocketed from $5.9 million in 2005 to $10 million in 2008-09. For another questionable expenditure, consider a decision by one federal body to spend $11 million to upgrade a research facility in Churchill while another federal agency cut the facility’s operating funding.

In Winnipeg, it was learned that once the Canadian Museum for Human Rights finally opens, it will need $21.7 Million per year in funding from Ottawa, not the $14 million per year that proponents suggested in 2006.

At the provincial level, things were not much better.

The Doer government tabled an $88 million deficit while letting provincial bureaucrats’ wages continue to increase well above the rate of inflation. Even worse, the province completely cancelled their modest plan for cutting personal income taxes in the future.

They spent $175,000 on a small canopy at the legislature and $14 million on provincial ID’s that just over 8,000 Manitobans decided to buy.

School taxes continued to increase across the province despite a drop in the number of students in public schools by 10,000 between 1999/00-2008/09. Costs for the public system increased by $542 million over the same period – more than $291 million above the rate of inflation.

In terms of Hydro, it was learned that Manitobans have paid for over $160 million in dam negotiation costs through their hydro bills over the past decade. Despite allegations of misuse, Hydro has refused to disclose how the funds were spent. Even worse, a former Hydro consultant has raised doubt about the crown corporation’s overall financial footing.

Revelations about a taxpayer funded NDP election scandal from 1999 emerged as did questions about the credibility of all MLA expenses.

But it wasn’t all doom and gloom.

On the bright side, MP Candace Hoeppner’s ‘scrap the long gun registry’ bill is moving along in Ottawa and the province reduced its business tax from 13 per cent to 12 percent. Employees of government funded agencies that previously enjoyed “show up for work” bonuses will no longer receive them thanks to efforts by the Canadian Taxpayers Federation.

Clearly there was a lot of taxpayer abuse in 2009. Hopefully 2010 will be more taxpayer-friendly.

Triniman wrote:
On the bright side, MP Candace Hoeppner’s ‘scrap the long gun registry’ bill is moving along in Ottawa and the province reduced its business tax from 13 per cent to 12 percent. Employees of government funded agencies that previously enjoyed “show up for work” bonuses will no longer receive them thanks to efforts by the Canadian Taxpayers Federation.

Clearly there was a lot of taxpayer abuse in 2009. Hopefully 2010 will be more taxpayer-friendly.

So continuing to move an ever larger percentage of tax revenues onto the backs of wage earners is a "bright point" while we cancel whatever meager personal income taxes reductions were planned? Excuse me, but I'm sick of having an ever larger tax burden placed on personal income tax while we can somehow find all sorts of ways to cut business taxes, bail out banks (who are reporting record profits once more), and raising politician's wages by ridiculous amounts.

If anything cutting the business tax rate is just another black mark IMHO. My piece of the pie is big enough.

How many jobs have you created?

Funny how some peeps forget that it is business that creates the jobs.

It's those same people who b1tch when a company moves jobs out of Canada.

It's mostly the same people that continually ask more from business.

Business is not a bottomless pit of cash that workers can continually take more from. At some point it has to make a reasonable profit.

If taxing business less allows them to be more competitive that is a good thing. Maybe that allows a business to grow. That is a good thing. Growth means more jobs. That is a good thing.

This is not rocket surgery.

grumpy old man wrote:Funny how some peeps forget that it is business that creates the jobs.

It's those same people who b1tch when a company moves jobs out of Canada.

It's mostly the same people that continually ask more from business.

Business is not a bottomless pit of cash that workers can continually take more from. At some point it has to make a reasonable profit.

If taxing business less allows them to be more competitive that is a good thing. Maybe that allows a business to grow. That is a good thing. Growth means more jobs. That is a good thing.

This is not rocket surgery.

Nothing wrong with job creaton GOM, but why is it that during the last 5 decades we the taxation system in Canada has changed to a system where revenues collected from business has declined steadily while personal income taxes as a share of revenues has continually climbed.

All I'm saying is business needs to pay it's fair share. It's not fair to say to the individual that there's no room for personal tax cuts, while we subsidize the rich.

JTF wrote:How many jobs have you created?

Does creating jobs exempt one from having to pay their fair share? If an individual earning over $100k annualy has to pay roughly 50% of their wages in income tax, then why shouldn't a business reporting the same amount as a profit have to pay corporate taxes at the same rate? Why are their rates roughly half of individial rates? Has it always been this way historically? Was Canada any less wealthy as a nation when this situation did not exist? What has changed?

Lets just follow the ball here. Business pays realty taxes, including school taxes, in Winnipeg, there is an additional assessment called a Business Tax in addition to any license fees that may have to be paid as a course of business, and then there might be a BIZ assessment on top of that, and then theres CPP and EI, and while they may not be called a tax, what better way to describe them, and if they hire enough people, the business has the extra honour of paying the Health and Post Secondary Education Tax (aka payroll tax) and of course theres the corporate taxes that are referred to. So if you really follow the ball, you want business to pay a higher rate of tax, rather than doing what they are meant to do, which is to generate a profit, which is distributed to the owners, who would ultimately pay tax on those earnings as income tax.

I'm always amazed why people can't figure that out, thought process must be clouded by too much socialist rhetoric.

grumpyrom wrote:Does creating jobs exempt one from having to pay their fair share?

I guess the real question is what is a fair share?

A historical perspective for ya...

Wikipedia

Unlike the United Kingdom and the United States, Canada avoided charging an income tax prior to World War I. The lack of income tax was seen as a key component in Canada's efforts to attract immigrants as Canada offered a lower tax regime compared to almost every other country. Prior to the war Canadian federal governments relied on tariffs and customs income under the auspices of the National Policy for most of their revenue, while the provincial governments sustained themselves primarily through their management of natural resources (the Prairie provinces being paid subsidies by the federal government as Ottawa retained control of natural resources for the time being there). The federal Liberal Party considered the probable need to introduce an income tax should their negotiation of a free trade agreement with the United States in the early 20th century succeed, but the Conservatives defeated the Liberals in 1911 over their support of free trade.

The Conservatives opposed income tax as they wanted to attract immigrants primarily from the United Kingdom and the United States, as opposed to Eastern Europe, and they wanted to give their preferred choice of newcomers some incentive to come to Canada. Wartime expenses forced the Tories to re-consider their options and in 1917 the wartime government imposed a "temporary" income tax to cover expenses. Despite the new tax the Canadian government ran up considerable debts during the war and were unable to forego income tax revenue after the war ended. With the election of the Mackenzie King-led Liberal government, much of the National Policy was dismantled and income tax has remained in place ever since.

I cannot wait until the CMHR folds and is turned into the Canadian Rock & Roll Museum!

I expect you will eat sanctimonious crow.

grumpy old man wrote:

grumpyrom wrote:Does creating jobs exempt one from having to pay their fair share?

I guess the real question is what is a fair share?

A historical perspective for ya...

Wikipedia

Unlike the United Kingdom and the United States, Canada avoided charging an income tax prior to World War I. The lack of income tax was seen as a key component in Canada's efforts to attract immigrants as Canada offered a lower tax regime compared to almost every other country. Prior to the war Canadian federal governments relied on tariffs and customs income under the auspices of the National Policy for most of their revenue, while the provincial governments sustained themselves primarily through their management of natural resources (the Prairie provinces being paid subsidies by the federal government as Ottawa retained control of natural resources for the time being there). The federal Liberal Party considered the probable need to introduce an income tax should their negotiation of a free trade agreement with the United States in the early 20th century succeed, but the Conservatives defeated the Liberals in 1911 over their support of free trade.

The Conservatives opposed income tax as they wanted to attract immigrants primarily from the United Kingdom and the United States, as opposed to Eastern Europe, and they wanted to give their preferred choice of newcomers some incentive to come to Canada. Wartime expenses forced the Tories to re-consider their options and in 1917 the wartime government imposed a "temporary" income tax to cover expenses. Despite the new tax the Canadian government ran up considerable debts during the war and were unable to forego income tax revenue after the war ended. With the election of the Mackenzie King-led Liberal government, much of the National Policy was dismantled and income tax has remained in place ever since.

Fair share you ask...well the best numbers I could find quickly were based on the early 1990's and put PIT as contributing the lion's share of federal revenue at around 40-50% of all revenues, while corporate taxes were responsible for 10-15% of total revenues. The majority of the tax burden has been shifted from sales taxes,tariffs and corporate taxes to the individual taxpayer.

Speaking of which....

The Askers have been turned doen by both the City and the Feds in their request for still more money.


http://www.winnipegsun.com/news/winnipeg/2009/12/20/12217516-sun.html

If Toews had any sense he'd cap the yearly maintenance costs as well.

Freeman wrote:Lets just follow the ball here. Business pays realty taxes, including school taxes, in Winnipeg, there is an additional assessment called a Business Tax in addition to any license fees that may have to be paid as a course of business, and then there might be a BIZ assessment on top of that, and then theres CPP and EI, and while they may not be called a tax, what better way to describe them, and if they hire enough people, the business has the extra honour of paying the Health and Post Secondary Education Tax (aka payroll tax) and of course theres the corporate taxes that are referred to. So if you really follow the ball, you want business to pay a higher rate of tax, rather than doing what they are meant to do, which is to generate a profit, which is distributed to the owners, who would ultimately pay tax on those earnings as income tax.

I'm always amazed why people can't figure that out, thought process must be clouded by too much socialist rhetoric.

Business's also have many more deductions available than the avergae tax payer, and enjoy a much lower marginal rate to begin with. Last I checked most employees also contribute CPP and EI so I don't really get your point on this one, unless your compaining the rates are not the same for employer vs. employee contributions. And finally you want to bring up profit's distributed to owners? Pfft...you mean dividend's which are taxed at rate that is usally at least 10% lower than PIT would be in the same income bracket?

Again, as an individual tax payer I fail to see where the fairness comes in, especially when I am constantly told that there is no room for PIT rate cuts but yet we can find cuts for busniess's and bailouts.

If you know of anyone that is making $100K a year and pays $50K in taxes, you know a fool.

grumpyrom wrote:Business's also have many more deductions available than the avergae tax payer, and enjoy a much lower marginal rate to begin with. Last I checked most employees also contribute CPP and EI so I don't really get your point on this one, unless your compaining the rates are not the same for employer vs. employee contributions. And finally you want to bring up profit's distributed to owners? Pfft...you mean dividend's which are taxed at rate that is usally at least 10% lower than PIT would be in the same income bracket?

Again, as an individual tax payer I fail to see where the fairness comes in, especially when I am constantly told that there is no room for PIT rate cuts but yet we can find cuts for busniess's and bailouts.

So debate what constitutes FAIR.

Let's include businesses that make obscene profits and businesses which struggle to break-even.

Let's include businesses that employ hundreds and those that employ a couple.

Would it be fair that a business that employs 1000 people and earns its' owners stupidly large dividends but pay's no tax what-so-ever?

Would it be fair that a business that employs 2 people and earns its' owners a reasonable living but pay's 50% of its' income?

Think these two scenarios through.

Not sure what your point is GOM. Are you arguing that a business employing 1000 deserves to pay less tax because they create those jobs, or are you arguing that they should pay the same rate as the mom and pop outfit?

My argument would be that BOTH should pay the same effective rate on profits, and that the rate should be somewhere closer to what individuals pay.

Well, therein lies the problem with the argument. Why tax the mom and pop business's profits when the income should be taxed in the hands of the eventual earner, who happen to be mom and pop.

I know that it must be tough for someone who has been programmed to the union dogma that business is the big bad guy, who mistreats employees, gouges customers, ruins the environment, and kicks dogs, but most business in Canada is SME's (small/medium enterprises), which employ millions of people. Business is not always big bad Wal Mart, but is working class folk who want the freedom to succeed and sometimes fail based on their own skill, ability, initiative and drive. There probably does exist and ideal world where everyone is the same, but then we'd have to call each other "Comrade". No thanks, just can't get into that.

Wouldn't mom and pop just claim the business as a partnership and put any profit or loss on their personal income tax? Unless it's incorporated.

If it is unincorporated, it is earned simply from doing business (earning income) under another name...really no different.

My favourite CTF moment was once when I was cavassing an apartment block and I ran into a hard-core CTF supporter, living in Manitoba Housing. I just couldn't really take her seriously. Perhaps she really hated her low rent and provincial subsidy? You'd think she'd move out of principle! NOT.

usedtoliveinstb wrote:My favourite CTF moment was once when I was cavassing an apartment block and I ran into a hard-core CTF supporter, living in Manitoba Housing. I just couldn't really take her seriously. Perhaps she really hated her low rent and provincial subsidy? You'd think she'd move out of principle! NOT.

So the more people in the social welfare network, the better the NDP fare come election time?

usedtoliveinstb wrote:My favourite CTF moment was once when I was cavassing an apartment block and I ran into a hard-core CTF supporter, living in Manitoba Housing. I just couldn't really take her seriously. Perhaps she really hated her low rent and provincial subsidy? You'd think she'd move out of principle! NOT.

I'm a big fan of CTF. I love their 5 point action plan to get rid of a $602M deficit. Best part of it is that it contains zero estimates on how much any of their 5 points would put towards cutting the deficit. It also doesn't say what the current cause is for the deficit, and which parts of it will continue to be an issue in the coming years, which would be targeted by the points in their action plan.
Even something simple like saying how much money have been spent on discretional infrastructure this year, an estimate of how much of that gets rolled back into the economy with an adjustment made for additional anticipated social assistance due to the lost work, which would show the net loss to the government's books. Then take a look at the upcoming discretional infrastructure spending anticipated for the next few years, and use historical data to make an estimate in how much loss it will result in each year. If they can say 'look, if we hold back on these 3 or 4 projects we can save $175M in the next two years' or something along those lines, that's a real action plan. Throwing out 5 suggestions to do with spending without anything to back it up is fine, but not an action plan. But that's why these guys are so much fun to listen to.

Imho, the CTF sure ain't what it used to be.

umcrouc0, a few years ago you wouldn't have had that gap from them. Now they seem most concerned with selling memberships.