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A Tax Cut in Name, a Tax Increase in Reality

Much has been made of the Harper Conservatives' new income-splitting tax cut. It's actually called the Family Tax Cut. The schedule on the federal income tax return will actually be called Schedule 1-A: Family Tax Cut.

While Conservative supporters came flying out of the gates praising the measures as putting money back in the pockets of Canadians, it is only doing it for a few, for those who need it least, and on aggregate, is actually increasing our personal income tax burden.

Changes impact few Canadians

54% of families in Canada with children under 18 will get no benefit from this. Another 12.8% will only get an extra $250, not nearly enough to pay for even one month of child care for one child. Of all Canadian households, only 10% will see some benefit from income splitting.

Benefits those who need it least

Who does benefit mightily? Families with one high income spouse and one low income spouse. There is a small segment of the population that will reach the $2000 cap for this program. Here is the family structure you must have to maximally benefit from this program.

1. 1 or more child under 18.
2. 2 parents
3. A combination of the following annual earnings for each parent
a. Parent A makes $75k or more and Parent B makes nothing
b. Parent A makes $150k or more and Parent B makes $25k or less.
c. Parent A makes $200k or more and Parent B makes $50k or less.

You see now why it's not so unbelievable that less than half of Canadian families will benefit.

The average income splitting benefit per couple doesn't get north of $600 until they're making more than $82000.

You can't even make the argument, as supporters of the Conservatives and this plan do, that this will be of most benefit to those who choose to stay home and care for their children. The median income of families with one breadwinner and a non-working spouse is $40000. Their benefit from this plan would be $38 or less.

It increases the personal income tax burden of Canadians

The Parliamentary Budget Officer crunched the numbers on this plan. And here is where it falls completely apart.

The Conservatives would have you believe this is putting money in the pockets of Canadians. And it is. For one whole fiscal year.

After 2014/2015 (an election year), this plan causes two things to happen.

1. The total personal income tax burden on Canadians increases.
2. Total government expenditures increase. A lot.

The government has introduced a tax cut that actually causes taxes to increase. But not enough to offset the cost of the program.

Enough so that by 2018/2019, it will COST the government an extra $4.8 billion.

If all that were not enough to make you wince, they are taking some of your tax dollars to advertise this tax cut increase in their typical partisan fashion, even though it will not actually be a law until next year.

It eliminates the Child Tax Credit

A previous version of this post mistakenly stated that the Child Tax Benefit would be eliminated. This was untrue. Due to the similarity of the names and the reporting of both names in connection with the Family Tax Cut, it was confusing.

For the sake of clarity, the CTB is a monthly benefit paid to lower income families. The CTC is a tax credit claimed on your annual tax return that lowers your taxable income by a certain dollar amount per child under 18.

Since the Child Tax Benefit essentially credits you $338 per child in the family, but the enhanced UCCB adds $1200 per year, it is a net benefit to taxpayers with children under 18 living at home.

All of the above still applies. On aggregate, it will increase the total personal income tax burden of Canadians and increase federal government expenses by a substantial amount. In fact, in Budget 2014, they project growing surpluses over the next four years. This plan is evidence that a budget is only good as those who try to keep on it. This plan instantaneously wiped out almost all the surplus they were on track to record this year. And it spent 50% of the surplus for the next 4 years. Increased taxes and expenditures to give a handout to a small portion of Canadian households.

I thought tax-and-spend was a Liberal thing?

And I'm far from the only one to consider this plan economically and politically foolish.

Income splitting and social engineering
Income splitting is bad politics...
Income splitting won't help those who need it
Harper's family tax cut isn't great policy, or good politics
Income splitting: Huge tax cuts for rich families
Wealthy husbands will cash in big time...
7 facts about Harper's family tax plan
Did Ottawa announce a tax increase last week?

Posted by Pharmadaddy at 1:09 AM No comments: 


If you ask me, the glory days of Canada as a world leader in quality of living have sadly passed.  That does not mean they will never return, but we are certainly at a lower point than we have been at any time in my living memory.

I remember as a child being so proud to say that Canada topped the UN Human Development Index year after year after year.  So as I've been watching Stephen Harper's Conservatives slowly erode what I consider to be fundamental Canadian values it has made me more and more nostalgic for that bygone era.

Many people will challenge this assertion and that, of course, is their democratic right.  A right protected by the Charter of Rights and Freedoms, to me as quintessential and fundamental a guiding document to Canada as the Constitution of the United States is to that nation.  A document conceived and created in a time and by a government so fundamentally different from today that it seems more like a fairy tale than factual history.

The fact remains though, that for better or for worse, Stephen Harper has completely changed the Canadian political landscape and, in doing so, he has completely changed Canada's guiding principles, our economy, our way of life, and our global reputation.  And, as far as I'm concerned, not for the better.

I've already established that by pretty much every measure, despite popular assertion to the contrary, Conservatives are not better at fiscal management than Liberals.  In fact, at the very best they are just as good and an honest interpretation of the numbers would suggest they are worse.

But what about our global stature?  One cannot quantitatively measure our global reputation, but we can certainly measure our quality of living.  And the United Nations has thankfully been doing that since at least 1990.  And as far as Canada is concerned, the data does not paint a pretty picture. In 2002, Stephen Harper and his party became Official Opposition in Canada.  In 2006 they formed the government.  And in 2011, they formed a majority government.  Coincidence?  Maybe.

But is the HDI ranking everything?  No, of course not.  How have we fared when compared to other wealthy nations?  Certainly our HDI as a raw number has increased over time.  But we've been left in the dust by many of our counterparts. Compared to the US, Norway, Australia, Belgium, Denmark, Finland, France, Germany, Iceland, Luxembourg, Netherlands, New Zealand, Norway, Sweden, Switzerland, and the UK, we have not grown much in our HDI.  In fact you can see we started out on the top and have slowly migrated toward the lower half of these nations, being left behind mostly by Scandinavian and Northern European nations.  Norway is a great comparator as it is a northern nation with great resource wealth.  They've gone from an HDI of 0.804 in 1980 to 0.955 in 2013, a 19% increase.  Canada on the other hand has gone from 0.825 to 0.911, an increase of only 10%.

But surely the UN HDI is not the only measure of quality of life or social progress.  That is true.  There are many others.  None have been calculated as long as the HDI, so you cannot see trends, but we can see where we stand today compared to other nations.

Social Progress Index: 7th; surpassed mostly by Scandinavians and Northern Europeans; NZ tops the list

Human Poverty Index: 8th; all Scandinavia and Northern Europe above

World Happiness Report: 6th; yup.  Scandinavia and N. Europe above.  Again.

Where-to-be-Born Index: 9th; ditto.

And, just in case you still think our health system is a bastion of perfection, the WHO World Health System Rankings: 30th.  That's right.  30th out of 191 nations.  Morocco, Saudi Arabia, and Colombia are a few of the nations ahead of us that don't traditionally appear near the top of other rankings.

Don't get me wrong.  I love Canada.  I still think it's the greatest country in the world and I hold great hope for our future.  But our current government is taking us down the wrong path.  And I look forward to 2015 when, hopefully, we make a major course correction, and my children can live through a 7 year unbeaten streak atop the UN HDI as I did in the 90s.

One can hope.

Posted by Pharmadaddy at 12:22 PM No comments: 

This Facebook graphic is full of shot 

And here's why.

1.  There is no longer an H1N1 flu shot.

There is a seasonal flu shot.

It bears repeating that not one of them ONLY contains H1N1.

They all contain the same three strains as above.

a.  Beta-propiolactone

b.  Neomycin sulfate

Neomycin is not one of those things.

i.  Is it in any of the above vaccines?

ii.  What is it?
It's an antibiotic.

It's one of the most commonly used antibiotics in the world.

Some people would know it better as Polysporin.

Is this of concern?

This is 187.5 million mcg of potassium.

Case closed.

Have vaccines actually been linked to the diseases mentioned?

8.  Lupus
Nope.  No research to support this notion.

Vaccines don't kill people.

Ignorance does.

Posted by Pharmadaddy at 4:34 PM 1 comment: