Wednesday, February 27, 2008

With Jim Flaherty, yesterday's sin, becomes today's virtue

Do you suppose the Liberal brain trust and Power brokers like unelected Senator David Smith will be able to connect these two hypocritical dots staring them straight in the eyes?

(1) It’s quite remarkable that at a time when the country was gushing with surpluses, that the Harper government felt compelled to shut down income trusts in order to stem alleged tax leakage on the basis that:

“Well, as Minister of Finance, I have a fiduciary obligation to the taxpayers of Canada today, not tomorrow, an obligation to pay for needed social, environmental and economic programs today, not tomorrow. I cannot, and I will not, fund today's programs from tomorrow's revenues.”

(2) Such corrupt logic is an absolute crock in terms of financial theory, made ever more so by the fact that we are now at risk of budget deficits and Flaherty’s announcement of a TFSA thingy, as reported in today’s Globe and Mail entails an arrangement whereby:

“Staring in 2009, people 18 and older will be able to put up to $5,000 a year in a Tax Free Savings Account and rack up investment gains without paying taxes, even at withdrawal”

I am at my most facetious when I say that no doubt this will lead to articles of condemnation in the Toronto Star by David Olive entitled Income Trusts 3.0 or a fine erudite piece by Eric Reguly in which he declares the TSFA to be the second coming of Capitalism for slobs

No doubt Power Corporation will be able to make the TFSA work for them in a way that they couldn't compete with income trusts and embarked on enjoining the Harper government to kill them on false grounds.

All I know is that Trusting Flaherty Spells Anguish.


Dr Mike said...

This TFS account is expected to produce a loss of over 3 billion dollars in tax revenues within 20 years--now that is real smart financial planning--why worry about today when you can steal from the future.

Another good one Jimmy!!!

Also , how come no-one noticed that the rate of taxation on dividends has been increased--this has been quietly done & it appears that this has been another fast one pulled on us by the elf from Whitby.

Got to love this guy--he is the king of policy contradictions.


Transcanada said...

Jim Flaherty gave Canadians nothing and told Canadians he gave them something vary valuable.

TFSA's will only work if Canadians have extra $$$ to throw into the latest CONservative scheme to buy votes.

How many young couples, mortgaged to the neck have an extra $5Gs (each) per year. How many middle-aged couples will 'save for a car(?)' using this scheme? Nobody.

And how much tax dollars will they save? The RRSP contribution rate is something like 7% as reported yesterday.

The Dwarf Flaherty who was concerned about tax leakage from an successful investment tool like Trusts need not worry about tax leakage from TFSA's because the economy won't give most Canadians room to contribute to TFSA's

The Dwarf knows it, Canadians don't. Jim Flaherty gave Canadians nothing and told Canadians he gave them something vary valuable.

Anonymous said...

Think the Liberals can figure this out? Part 2

Just in time for the conversion of high yielding trusts to corporations in 2011. Flaherty is nothing if not relentlessly against the little guy. Must make him feel like the big person he isn’t.

Dividend Taxes are Going up
February 27th, 2008 ·

Budget 2008 does have a sting buried deep in the document and barely mentioned in the mainstream media. In page 290, under the innocuous title of Dividend Tax Credit, the budget states:

The 2007 Economic Statement reduced the general corporate income tax rate to 15 per cent by 2012 and stated that consideration would be given to adjusting the enhanced DTC to ensure the appropriate tax treatment of dividend income.

Budget 2008 proposes to adjust the dividend gross-up factor and DTC rate for eligible dividends, to reflect those corporate income tax rate reductions.

Specifically, Budget 2008 proposes to reduce the eligible dividend gross-up from its current level of 45 per cent to 44 per cent effective January 1, 2010, 41 per cent effective January 1, 2011, and 38 per cent effective January 1, 2012. The enhanced DTC rate will also change on the same schedule, moving from 11/18 of the gross-up amount to 10/17, 13/23
and 6/11.

Translation: the dividend tax rate for the four federal tax brackets are increasing from -5.75%, 4.40%, 10.20% and 14.55% currently to -0.03%, 9.63%, 15.15% and 19.29% respectively by 2012, an increase of approximately 5% at every tax level. Ouch!

nineofiveland said...

Let's see if I have this right .. Jimmy whacked the Income Trusts in my Life Income Fund so that I have less to live on for the rest of my life. Now that he has figured out that I can't withdraw as much each year for him to tax (the tax that he didn't count in the Tax Unfairness Plan) .. he has generously allowed me to take 50% out so he can get his tiny hands on it right away. Maybe I'll put some into a Tax F'n Savings Account to use to buy dog food in my declining years. Give me a break!

Dr Mike said...

Wiskas Wiskas Wiskas !!!!!!!!!!!!!

Thank you Jimmy ...... if it wasn`t for your "new" TFSA I would be stuck in the Cat Chow Line.

At least when he was the Finance Minister in Ontario we could go live on the street & be tossed in jail for 3 squares a day.


Robert Gibbs said...

More hypocrisy from Flaherty. Who would have guessed?

First, destroy income trusts and the savings of ordinary average Canadians, especially seniors and retirees, by fraudulently claiming that these assets cause tax leakage, while simultaneously encouraging takeovers of these same assets by wealthy foreign and private interests, and thereby actually causing this claimed tax leakage.

Then, create a tax free savings account that benefits very few and very little, and most likely only the wealthy who will have the additional funds available for just such a tax free program.

Rob from the commoner to give to the wealthy.

Such is the way of the CONS.