Sunday, January 4, 2009

This Time — Raise The Tax-Free Amount

It's sure nice to find out that the government is finally considering tax cuts, rather than more bailouts for privileged industries or more handouts to parasitic special interest groups.
“There are a couple of ways to stimulate the economy. One is spending on the infrastructure side and other ways. And tax reductions — leaving more money in people's pockets — is also stimulus to the economy,” Mr. Flaherty told reporters at a news conference.

“We've been reviewing other (tax) options,” he added.
Some are speculating about yet another GST cut. Hopefully, this won't be the case. A 1 percentage point reduction in GST comes with a price tag of over $6B a year. That's just too expensive for a penny-on-a-dollar discount. Plus - it does nothing to improve consumers' confidence, it merely makes shopping slightly cheaper.

The same funds could instead be used to increase personal and spousal exemption by $1900, increasing the amount one could earn tax-free from $10,100 to $12,000. And there will be enough money left to nearly double the child exemption from $2089 to $4000. Those measures (totaling roughly the same amount as 1% GST cut) will result in $285 tax break for every individual, with an extra $287 per child tax break for every family.

Sure, payroll clerks will be having a hard time, adjusting payroll deduction formulas and numbers. Still, having an extra $11 per paycheck for each family member including children, is far more encouraging and far more assuring (in terms of consumers' confidence) than a promise of a $10 discount on a $1000 purchase.

And, how about trimming some wasteful program expenses? A deficit (even a "temporary" rather than "structural") could be a great excuse to slash spending to agencies whose primary function is Liberal social engineering - CBC, CHRC, SOW to name a few. It's a great excuse to tell all those "artists" whose art never sells to go, find a real job. And, finally, if Canada can't make ends meet then we should stop throwing billions into a bottomless pit named "foreign aid".

Charity begins at home. If we are to go back into deficit, we better cut back on those utopian wealth redistribution projects. If we are to borrow back tens of billions of dollars (after paying off $37B in just 3 years,) then we better use those funds to provide additional tax breaks for overburdened Canadian families, rather than supply a bunch of corrupt officials overseas with easy cash.

2 comments:

The Rational Number said...

Just curious, what would spend your money on?

Leonard said...

Extra cash is always handy. In my situation it would go towards buying furniture once I have to move out of a rented furnished room and relocate into an 2br family apartment which I'll have to furnish at my own expense. (If I manage to get away with no more than $1000 hole in the budget then I could consider myself lucky.)