Provincial Election: Tax Pledges Don’t Work

Home Forums Bulldog Forum: Ottawa, National And International Debate Provincial Election: Tax Pledges Don’t Work

This topic contains 14 replies, has 1 voice, and was last updated by Chaz 2 weeks, 3 days ago.

Viewing 15 posts - 1 through 15 (of 15 total)
  • Author
    Posts
  • #751417 Reply

    Chaz

    Appealing only to the voter’s pocketbook does not get my vote. Let’s look at some so called savings.

    How much will reducing hydro rates by 12 per cent put in my pocket? I am in an all-electric house from heat to a/c to light bulbs. A 12% reduction will save me a whole $700.00 per year. My friend lives in a condo and a 12% reduction will save him under a $100 per year. NO VOTE for this idea from me.

    How much will 20% income tax reduction save? Well, the provincial tax on the first $43000.00 is currently 5.05% and income tax (before personal credits) is $2170.00. So, 20% will put $400.00 in my pocket. NO VOTE for this idea from me. { these numbers are rounded and do not account for the fact that reducing the first tax bracket will also reduce the amount of personal credits}

    How much will 10 cents per litre save? I don’t drive as much as many do but I do drive a big car so my savings will not be relevant to many but my pocket book will save $300.00 per year. NO VOTE for this idea either.

    I am not trying to down play the fact that lower income earners would appreciate more money in their pockets but with a 3500 square foot house and an eight cylinder engine I might save $1400.00 per year. People earning $35000.00 per year are going to save significantly less.

    Personally I’d up the Health Care Premium on those with taxable income over $200,600.00. Currently – If one’s taxable income is $1,000,000.00 the health premium is $900.00 which is what one pays on $200,601.00. Five times the earnings and zero extra tax is not even close to fair.

    Add to the grin, there is no fully funded budget presented; heck I don’t see a thing that even resembles a platform.

    And, by the way – a 10 cent per litre reduction in gas tax merely gives the oil companies a chance to increase their price by 10 cents per litre.

    0
    #751430 Reply

    sisco farraro

    Chaz. You raise a good point. As more and more baby boomers retire and experience health issues our provincial health system, which is beginning to grind its gears at present without any oil being added, will become a major issue for everyone, the primary issue being the speed at which services can be delivered. As far as I can tell privatization in the medical profession will grow. The people you mention above, the ones with millions of dollars, might be able to afford the extra costs but the masses won’t. So what’s to do? Allow the people with the most money to opt in and out of the system at their convenience or let them eat from both columns A and B on the menu?

    1+
    #751429 Reply

    Chaz

    After I made my previous comments I thought that I should have added another calculation.

    Currently, a single person with employment earnings of $15.00 per hour,working 40 hours per week for 52 weeks pay and paying C.P.P. and E.I. would pay Ontario income tax for 2018 of $958.00 plus $300,00 health tax (premium – they like to call it a premium not tax).

    That big 20% tax savings will save $192.00 per year ; that’s $3.70 per week in income tax saved and you’ll still pay $300.00 health tax.

    Um, a million bucks equals only $900.00 health tax. That’s only three times as much in health tax but 32 times the income.

    Where oh where is one going to splurge with that extra 53 cents per day. Don’t think it will even buy 1/2 a litre of gas.

    0
    #751505 Reply

    Chaz

    I don’t want people to have the wool pulled over their eyes .

    I must add one more reality check to the real results of the pledges made by Mr. Ford.

    My bud, who lives in the condo, had a taxable income of $40102.05 for 2017.
    My bud doesn’t drive (flunked senior’s driver’s test) – gas tax savings , ZERO *
    His electric bill is such that 12% off gives savings of $100.00.
    His Ontario Tax ( line 428) will go down by $180.00

    Promised savings for him – $1.05 per day. ( where will he spend his new found wealth ?)

    Please – if you are going to sell your vote then realize you’re selling it for peanuts.

    {* the cab company ain’t going to reduce the fare either}

    0
    #751552 Reply

    Ron Benn

    Wealth redistribution through tax policy is only effective if the government taxes a relatively large number of people a relatively small incremental amount, and then directs the proceeds to a much smaller number of people. To illustrate:
    > increase the tax load on 5 million people by $120/year ($10/month) = $600,000,000
    > distribute the proceeds to 50,000 people who really really really need the money = $12,000/year or $1,000/month.

    As Chaz has asked above, what is the impact of someone having or not having $10/month, or $0.33/day? The answer is negligible. For someone who cannot afford to rent a home, let alone feed themselves and a couple of kids, would an incremental $1,000/month help out? Absolutely! A real impact with minimal political downside and maximum political upside.

    Trying to tax a small number of people a large amount just doesn’t work. In order to get $600 million from 100,000 people, the government would have to raise their taxes $6,000 per year, or $500/month. The political fallout would be significant. How do I know? Ask former French President Hollande. He introduced large tax increases on high income earners. These high net worth people responded by leaving Paris for Brussels and beyond, taking all of their tax dollars with them, leaving the French Treasury with significantly less to spend than it had before. These same people then retaliated by funding the politicians (and their enablers) who opposed Hollande to ensure that he was a one term president. What was it about this scenario that wasn’t identified as being the most likely outcome? It turns out you can cure stupid. It just takes a few years.

    1+
    #751612 Reply

    Chaz

    Ron,
    My main point was to let people know that the only thing that a 10 cent per litre and a 12% reduction in hydro and a 20% reduction in income tax produces is HOT AIR and peanuts.

    Fixing the tax system requires a complete overhaul but this is a matter for an enlightened government to address. I ain’t seeing that comin’ down the pipe no matter who gets elected.
    skoal,
    Chaz

    0
    #751628 Reply

    Ron Benn

    Chaz, I understood your point on the need to do some basic arithmetic on the realistic impact of the tax breaks being (sort of) offered by the PC’s, and that once done, the voter would understand that the promise is more of a sound bite than sound economic policy.

    My point is that the voters need to do the same thing when they hear platforms that are based on raising incremental taxes from what is a relatively small set of high income earners, some of whom have the option of parting for lower tax regimes (US), and offering a virtually unlimited set of benefits to an undefined, but what we are led to believe is a large number of recipients.

    Spending commitments are just that – commitments, and thus have a high probability of being made. To further exacerbate the problem, often these commitments cover a number of years. Incremental tax revenues are future events based on decisions not entirely within the control of the government. As such, there is a lower probability that the projected incremental tax revenue will be collected, and an element of risk (probability) that not only will the incremental tax revenue not be realized, but that less overall tax revenue is the end result. As former French president Hollande found out, wealth is portable and those with it will take whatever steps they deem necessary to avoid losing their wealth. Whether you, I or the general public think that this is an acceptable behaviour from the wealthy is irrelevant to the actual outcome.

    Too many election platforms are comprised of promises that result in not enough new tax money is being used to fund widespread multiple “highest priority” spending promises. All this assures us is that none of that fresh funding will have a meaningful impact on the problem that the party perceives to exist.

    This campaign is essentially being run on promises that IF we get on their airplane, the party promises to look for a refuelling stop, mid-flight. Would you board a trans-Atlantic flight if the airline opted for that strategy?

    0
    #751647 Reply

    Chaz

    Ron,

    It is not going to happen in my lifetime but there will come a day when the wealthy will not be able to threaten moving their wealth to tax-friendlier jurisdictions.

    There will be a global movement to stop creating tax-friendlier jurisdictions. The tax havens are already being watched. Companies that set up phony head offices are already being chased. Social attitudes are already changing.
    Again, it is impossible to do what is needed now,now – but it will happen.

    On the issue of making tax reduction pledges with merely a grin and with no budget or platform, I still want people to recognize a snow-job.
    skoal,
    Chaz

    0
    #751708 Reply

    sisco farraro

    Chaz and Ron:

    This is one of the best actual debates I’ve seen on The Bulldog in some time.

    The numerics are excellent and the history of what actually occurs when this type of logic is applied is not surprisingly everyone always looks after their own self-interests first. Is this a bad thing? No, it’s human nature. People who have earned their wealth feel they have the right to keep it and have the money to pay accountants to utilize every loophole they can find to help them do so.

    With respect to the current provincial election, Andrea Horwath’s TV ad campaign asking for the very rich to “give just a little more” sounds great but won’t get her elected as premier of the province.

    1+
    #751783 Reply

    Chaz

    Sisco,

    Some do indeed give advice that (for the lack of a better word) is grey but –

    Just because an action doesn’t break a law doesn’t mean that it is an ethical action.

    And, no – I will not recommend that you hire your 6 year old kid or your mother just to save some tax. and setting up a HQ in lala land is also inappropriate.
    skoal,
    Chaz

    0
    #751817 Reply

    Ron Benn

    sisco, the NDP platform position of “asking” a small number of high income earners to pay “a little more” is the fiction that I was pointing to. What is the “small number”? How much is “a little more”? How realistic is it to assume that 100% of the projected incremental tax revenue will be collected? Is this illusion of incremental tax revenue sufficient to fund the multiple billion dollars of incremental expenditures? Is spending more money, that may or may not actually manifest itself, on the same solutions that have failed to solve long term problems appropriate?

    Those are the questions people should be asking, just as Chaz has suggested that people ask what is the dollar value of the impact of the puffery that is the Ontario PC tax cuts.

    0
    #751822 Reply

    sisco farraro

    Thanks, Ron. That was very succinct. I wonder what specifically Andrea Horwath is looking for so Chaz can do some more calculations.

    Ask a politician a question that requires a short but detailed response, no, better yet a “yes/no” answer. The good politician will beat around the bush for 5 minutes without getting to yes/no. Why does this make them good? Because they need to take time to view an issue from every angle, rather than provide the easy emotional response everyone in the audience wants to hear. The final yes/no decision should come after they’ve considered all the options and it’s time to vote in council. Similarly, Andrea Horwath won’t know the numbers she is seeking until her people have had an opportunity to look at the provincial ledgers. Her conundrum is she wants to take money out of someone’s pocket, how many someones, hopefully I’m not one of them, but who knows her criteria for a high income earner, will she gather a bunch of names then pull 100 out of a hat. Blah, blah, blah.

    Anyway, I think the best we can hope for in the upcoming provincial election is a minority government sitting at Queen’s Park; it’s time to slow this race car down a bit. Personally, I don’t care who wins but I don’t want a first-time premier running a majority government for the next four years.

    0
    #751862 Reply

    Chaz

    Ron,
    Why does it have to be a “small number” of higher income earners paying a little more?
    Again – I’d start with removing the maximum $900.00 cap from the health tax for those over $200,600.00.

    Then I’d add other tax brackets for those with taxable incomes over $500,000.00.
    (current brackets cap at $42,200.00, $84,400.00, $150,000.00 and $220,000.00) So if between $150,000.00 and $220,000.00 one is asked to pay a bit more than those between $84,000.00 and $150,000.00 then why not ask more from those between $220,000.00 and $500,000.00. ? Then maybe some more between $500,000.00 and $1,000,000.00 etc.
    skoal,
    Chaz
    ( oh – we don’t want to offend the richest, I forgot )

    1+
    #751971 Reply

    Ron Benn

    Chaz, your question is better posed to the Ontario NDP. All I did was evaluate a key element in the revenue side of their platform.

    1+
    #752011 Reply

    Chaz

    Ron,

    I pose my question to all parties.

    The income tax system is, shall I say, a total mess and needs fixing across the board. The people at the bottom of the ladder need so much more and the people further up need to pay. That includes the ones on the upper rungs and those that got off at the top rung and now fly around in private jets and live in multiple penthouses,castles and estates in the tropics.
    skoal,
    Chaz

    0



Viewing 15 posts - 1 through 15 (of 15 total)
Reply To: Provincial Election: Tax Pledges Don’t Work
Your information:





<a href="" title="" rel="" target=""> <blockquote cite=""> <code> <pre> <em> <strong> <del datetime=""> <ul> <ol start=""> <li> <img src="" border="" alt="" height="" width="">