Month: May 2006

I must preface this by saying that I am not an accountant. Nor do I profess to be a tax expert of any kind. But I am not that far off with the following chart. It indicates what your tax increase may be with the clawback of the Liberal Income Tax cut for the lowest tax bracket.

In simpler terms. The increase from 15% to 15.5% on the tax rate for income that goes to approximately $35,000. (After that I think you go up to the next bracket.

As you can see, for someone making $25,000, the increase will be about $125. For many with one or more children under 6 in the household, you come out far ahead with the $1200 Universal Child Care payment.

In fact, I even calculated how much GST taxable goods and services you would need to buy at a 6% GST and a 5% GST to counter the approximate income tax increase. Most may not spend 50% of their income on GST taxable goods, but you probably do spend 25% of your income on these things which means once it hits 5% you should be far ahead.

Jim Flaherty put it this way. The Liberals taxed us too much. He took $2 out of every $3 that we were being overtaxed and gave it back to us. That’s why this goes all over. It is to make sure every Canadian gets some relief or help in some way.

(click to enlarge)

First the facts directly from CTV:

• Commitment of $3 billion a year in debt paydown (National debt now stands at $483.4 billion and the debt charges in 2006/2007 are $34.8 billion)
• Elimination of capital gains tax on listed stocks donated to charity, effective immediately
• Tax credit of up to $2,000 for employers who hire apprentices
• New $1000 grant for first- and second-year apprentices
• Reducing the Right of Permanent Residence Fee from $975 to $490, effective immediately
• Increasing immigration settlement funding by $307 million
• Fitness tax credit for up to $500 in eligible fees for physical fitness programs for each child under age 16
• New tax credit for textbooks, which is to provide a tax reduction of about $80 per year for a typical full-time post-secondary student
• Elimination of current $3,000 limit on amount of scholarship, bursary and fellowship income a post-secondary student can get without paying federal income tax
• New $500 tax deduction for tradespeople, for costs in excess of $1,000 for tools they must acquire as condition of employment
• Tax credit on cost of monthly public transit passes, or passes of longer duration, effective July 1, 2006
• Increase to $2,000 the maximum amount eligibility for pension income credit, effective 2006
• The budget proposes $460 million ($1 billion over five years) to further improve Canada’s pandemic preparedness
• The agenda also includes $19 million per year to Public Safety and Emergency Preparedness Canada
• Up to $320 million in 2005-2006 to fight polio, tuberculosis, malaria and HIV/AIDS and to help low-income countries cope with natural disasters or sharp rises in commodity prices
• Additional $2 billion over two years to the farming sector, which includes cash to assist farmers in transition to more effective programming for farm income stabilization and disaster relief
• $5.5 billion for the Wait Times Reduction Transfer, including a six per cent rise in health care transfers this year and next
• $52 million yearly to the Canadian Strategy for Cancer Control

This has something for everyone.  The average working class canadian family should see somewhere from $1000 to $1400 more per year.  The budget put money back in students pockets, parents pockets, farmers pockets, blue collar worker pockets, white colloar worker pockets, aboriginal pockets, child care spaces, low income housing, relief of our national debt, and money for our military, criminal justice system, prison system and any other category of Canadian you can think of.

Well done Minister Flaherty.  Well done.