Personal Finance

Trudeau going after Personal Services Corps disguised as small businesses

  • Last Updated:
  • Nov 20th, 2017 1:39 pm
Newbie
Oct 25, 2010
39 posts
1 upvote
Cornwall
taxrage wrote:
Nov 1st, 2017 4:50 pm
Yeah, don't get me going. There's a reason I have my Taxrage moniker, not the least of which is how taxes on a family increase as the % of the family income earned by one spouse increases...
Yep... I have a good job and make decent money. My wife doesn't.... why should we pay more tax than a couple with more balanced incomes?
Member
User avatar
Jan 15, 2017
372 posts
174 upvotes
BrianV wrote:
Nov 2nd, 2017 1:32 pm
Yep... I have a good job and make decent money. My wife doesn't.... why should we pay more tax than a couple with more balanced incomes?
From www.liberal.ca:
We will cancel tax breaks and benefits for the wealthy
Hmmm, reality check time:
  1. $85K bus driver had his $2K Family Tax Cut axed by Trudeau
  2. Former Nortel CEO John Roth gets to keep splitting his $750K pension and save $30,000 in taxes annually

If we had actual tax policy objectives clearly stated somewhere, we would be able to measure whether or not the objectives are being met. The lack of such objectives means it must be okay for families like yours to pay $10K or more tax than your neighbours with the same income - but more nicely distributed - while a retiree like John Roth gets a $30K tax break.
Newbie
May 7, 2017
67 posts
27 upvotes
BrianV wrote:
Nov 2nd, 2017 1:32 pm
Yep... I have a good job and make decent money. My wife doesn't.... why should we pay more tax than a couple with more balanced incomes?
I make a decent income and don't have a wife. Why should you pay less tax than me?
Why should your colleague who has a wife who also makes a decent income pay more tax than you?

It seems reasonable that a couple who both make $50k deserve to pay less tax than a $100k earner with a stay at home wife with no kids.
I guess the argument on pension splitting is a non working spouse actually earned half of that pension. In a divorce they would get half after all. I personally don't agree with this logic and think it was cynical politics by the Cons for introducing it and Liberals for keeping it.
Newbie
Mar 30, 2010
74 posts
23 upvotes
Toronto
onthefence wrote:
Nov 3rd, 2017 1:24 am
I make a decent income and don't have a wife. Why should you pay less tax than me?
Why should your colleague who has a wife who also makes a decent income pay more tax than you?
Because two people are living off that income?
onthefence wrote:
Nov 3rd, 2017 1:24 am
It seems reasonable that a couple who both make $50k deserve to pay less tax than a $100k earner with a stay at home wife with no kids.
What about a couple where one makes $60K/yr and one makes $40K/yr, both working full-time? Do they deserve to pay more tax as a family than one where both people make $50K? The difference is $414 annually in Ontario, which is not huge but isn't immaterial either (ask such a family if they could use an extra $400!)
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Jan 15, 2017
372 posts
174 upvotes
onthefence wrote:
Nov 3rd, 2017 1:24 am
I make a decent income and don't have a wife. Why should you pay less tax than me?
Why should your colleague who has a wife who also makes a decent income pay more tax than you?

It seems reasonable that a couple who both make $50k deserve to pay less tax than a $100k earner with a stay at home wife with no kids.
I guess the argument on pension splitting is a non working spouse actually earned half of that pension. In a divorce they would get half after all. I personally don't agree with this logic and think it was cynical politics by the Cons for introducing it and Liberals for keeping it.
Your two guy-with-a-wife scenarios seems to contradict each other.

A person with a spouse pays the same tax rates as you. The reason their total tax liability might be less is because he gets a credit for a spouse. Should the tax system just ignore his family status? Never gonna happen.
Banned
Jan 18, 2012
21 posts
25 upvotes
Toronto
onthefence wrote:
Nov 3rd, 2017 1:24 am
It seems reasonable that a couple who both make $50k deserve to pay less tax than a $100k earner with a stay at home wife with no kids.
I don't understand your logic here. Why does that seem reasonable? Both families are taking in 100k; it seems to me that fair would be them both paying the same amount in taxes.
Newbie
Mar 16, 2014
23 posts
3 upvotes
Toronto
You know the US system has "single" "married filing separately " and "married filing jointly brackets". Seems a bit more logical to me, would satisfy both camps above.
Member
May 7, 2012
307 posts
89 upvotes
pdntspa wrote:
Nov 3rd, 2017 12:30 pm
I don't understand your logic here. Why does that seem reasonable? Both families are taking in 100k; it seems to me that fair would be them both paying the same amount in taxes.
Seems to be missing a key point: FAIR is not the objective of the wonks. More taxpayers is better. Can hire more CRA!
Newbie
May 7, 2017
67 posts
27 upvotes
pdntspa wrote:
Nov 3rd, 2017 12:30 pm
I don't understand your logic here. Why does that seem reasonable? Both families are taking in 100k; it seems to me that fair would be them both paying the same amount in taxes.

I think it is pretty clear who is upper middle class and who is working class in this scenario. We are talking about for example a lawyer or middle manger with a stay at home spouse vs. a couple where one is maybe a waitress and the other a house painter. It is of course debatable but virtually every government in the world agrees with my perspective.
Newbie
May 7, 2017
67 posts
27 upvotes
taxrage wrote:
Nov 3rd, 2017 9:26 am
Your two guy-with-a-wife scenarios seems to contradict each other.

A person with a spouse pays the same tax rates as you. The reason their total tax liability might be less is because he gets a credit for a spouse. Should the tax system just ignore his family status? Never gonna happen.
I don't see why we would tax the family unit especially for people without kids. In fact most of the world doesn't do this either. Even the US only partially benefits married couples. It is never going to happen either by the way. 10 years of a conservative government that cut a lot of taxes and near the end of the mandate they begrudgingly offered a $2000 tax credit. So the full splitting is never going to happen. For somebody to pay less taxes somebody else has to pay more, unless you are in never never land like US tax proposals.

I make a little over a $100k and I am single. I pay the same as each part of a couple I work with who both make the same as me. Only the guy with a stay at home spouse pays less so again if we are talking about fairness that seems unfair. It's not 1950 who has a stay at home spouse anymore? (mostly I mean without kids but even with kids it is less than typical in middle class families). I certainly don't think we want the tax system to encourage the stay at home spouse to not work when there are no kids.
Newbie
Mar 16, 2014
23 posts
3 upvotes
Toronto
onthefence wrote:
Nov 3rd, 2017 3:33 pm
I make a little over a $100k and I am single. I pay the same as each part of a couple I work with who both make the same as me.
Here's my issue with your argument. For a progressive tax system supposedly based on the ability to pay the couple you work with has a much higher disposable income then you. Rent/cars/travel life etc are all cheaper for couples vs singles. Thats why the US approach is better, slight advantage to singles, a bit of income splitting advantage. In reality the 90-150K crowd in Canada is getting it too easy. Your coworkers take home 200K, thats quite well off on a global scale, yet they are paying a tax rate of about 25% before any deductions, will still get OAS etc.
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Jan 15, 2017
372 posts
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onthefence wrote:
Nov 3rd, 2017 3:33 pm
I don't see why we would tax the family unit especially for people without kids. In fact most of the world doesn't do this either. Even the US only partially benefits married couples. It is never going to happen either by the way. 10 years of a conservative government that cut a lot of taxes and near the end of the mandate they begrudgingly offered a $2000 tax credit. So the full splitting is never going to happen. For somebody to pay less taxes somebody else has to pay more, unless you are in never never land like US tax proposals.
The full splitting is already happening with pension income.

If you want to understand the arguments for taxing family vs individual income, you have to read the report of the Carter Royal Commission on Taxation, volume 3: http://publications.gc.ca/collections/c ... -1-eng.pdf

It's all based on ability to pay, and for just about everyone that can easily be measured by the family's aggregate income. Carter refers to tax unit.
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May 7, 2017
67 posts
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tdiddy23 wrote:
Nov 3rd, 2017 5:53 pm
Here's my issue with your argument. For a progressive tax system supposedly based on the ability to pay the couple you work with has a much higher disposable income then you. Rent/cars/travel life etc are all cheaper for couples vs singles. Thats why the US approach is better, slight advantage to singles, a bit of income splitting advantage. In reality the 90-150K crowd in Canada is getting it too easy. Your coworkers take home 200K, thats quite well off on a global scale, yet they are paying a tax rate of about 25% before any deductions, will still get OAS etc.
These are fair points. That said I haven't seen a current estimate of what rates would be who would pay more and who would pay less. The two income couples would clearly pay more and those with stay at home spouses would clearly pay less but what about other family configurations. How many more women would choose to stay home with the added tax incentive and what would the impact on the economy (and revenues) be of that? All of these and more are why tax reform in a democracy is very difficult to implement. I suppose when we had a surplus income splitting could have been introduced instead of for example the GST cut, but it is telling that they chose the simpler easier to explain tax cut that benefited everyone (even if economists would say it is the worse tax to cut).
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Jan 15, 2017
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onthefence wrote:
Nov 4th, 2017 1:56 am
The two income couples would clearly pay more and those with stay at home spouses would clearly pay less but what about other family configurations. How many more women would choose to stay home with the added tax incentive and what would the impact on the economy (and revenues) be of that?
Two income couples would pay more and those with stay at home spouses would clearly pay less...than who?

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