Canadian Personal Finance Blog

Remember when I first started this blog, I ranted about Single Income families and how they get screwed by the existing tax system. Well, the Conservatives seem to think the same way, now whether this is simply rhetoric or not, I cannot say (I am skeptical, just on the basis of how much this might cost the government in lost taxes). Have a read, or look at the original post here Canadian Financial Stuff: Canadian Government Hates Single Income Families (Final Analysis)

So what have we learned?

1. In our specific scenario (read all of my disclaimers in my previous posts) a Single Income Family as compared to a Dual Income Family, pays:
   $7424.00
   
   Approximately MORE in taxes (that is Provincial and Federal taxes combined).
2. This means that the Single income family to NET the same would have to make over $12,000.00 GROSS more to bring home the same amount (that is just unfair). Remember the single income earner at that level is taxed at the HIGHEST level on that extra income.
3. The Dual Income family is MORE likely to be eligible for:
   1. Family allowance cheques
   2. Provincial tax credits
   3. Pay less for the Ontario OHIP TAX
4. The Dual income family gets to write off a great deal on Daycare including:
   1. Daycare costs
   2. Summer Day Camps costs

If this doesn’t convince you that the Taxman HATES Single Income families, I don’t know what would.

If you agree or disagree comment on this, I am willing to dialogue with folks on this, but if you agree that this is UNFAIR, contact your member of Parliament. Remember an election is just around the corner, and they MOST LIKELY will return your calls (as opposed to afterwards when they kind of forget you exist (IMHO)).

What can we do to fix this?

1. Introduce a FAMILY or HOUSEHOLD income concept, where spouses or live-in folk can split the income (or even level the taxes) of the house and NOT get taxed at such a high level.
   • Might promote more folks to stay at home with kids (thus not as much daycare)?
2. Overhaul the whole tax system, so that everyone pays the same thing. Here I should be careful, because they’ll just end up making dual income folks pay as much as Single income folks!
3. National Daycare moneys should go directly to the families, (ALL OF THEM) and let THEM figure out what to do with the money (ok, now I sound like Ralph Klein).

The previous points are MY Opinion only, but maybe it’s time to get more than just crazy crackpots like ME thinking about this?

If you want to compare this and have Quicktax, it’s dead easy, just create an extra return in it, and compare what you might pay if you were a Single Income earner!

I was reading an internal newsgroup at work, and someone posted a story about how they had gone to see a “Financial Planner” and this person had asked this person for a bunch of personal stuff including this person’s S.I.N. number (Social Insurance Number for those who are not Canadian).

The S.I.N. number is the basis of your identity in Canada. Without it, I am not sure if you even exist in the Government’s eyes, so it is a fairly important ID number (I wonder how it is encoded?). If someone gets this number they can become YOU very quickly (and if this happens go here to report it). The Canadian Privacy commissioner actually has a web page dedicated to reasons why you should not give out your SIN number. To quote them directly:

Although only certain government departments and programs are authorized to collect and use the SIN, there is no legislation that prohibits organizations asking for it.

They can ASK for it, but you better not give it out, is the rough translation I read into this.

Who will ask for this number? Credit Card companies, finance companies, banks and the government nobody else (at least nobody else should). The Bank is about the only place you should give this out to, and even then, ask WHY they need it. I gave mine to Equifax, so that they could do a credit check on me, but that is the only other folks who get my S.I.N. number (at least that is what I hope).

Your S.I.N. is the basis of your Governmental existence, if someone has it, they are you, and can do whatever they want as you. Protect this number, do not give it out, do not send it in e-mails, if you have it on a document duplicate the document with that information blotted out, and then SHRED the document (unless it is an official document you must keep the original of). I cannot emphasize this enough, protect your S.I.N. .

–C8j

So the first salvo of ludicrous and unimplementable promises was fired by the Conservative party yesterday, when they announced a plank in their platform that called for the cutting of the GST to 6% immediately and dropping it to 5% in 5 years. Do I believe they will do this? Who knows, this is a political campaign, it is as valid as any promise you hear, I guess.

Now my understanding is that the Conservatives believe the government is taking in too much money and that regular Canadians deserve money put back in their pockets, I applaud that point of view, but I also look at the big picture and worry. Canada is still a MASSIVE debtor nation, not as big as our friends to the south, but still, to fill the hole that the Governments of the 70’s and 80’s created for us, cutting DOWN on income is not really the answer.

As we debtors know, the faster you pay off your debt, the SOONER you get to enjoy life and then figure out how you can alter your income. Let’s repeat that, get OUT of DEBT FIRST.

Here is a good set of questions for any Political Huckster that appears on your doorstep:

1. What is the size of the Canadian DEBT?
2. When do you think your party can retire this debt? What year? What century?!?!?
3. How will you do this, without cutting services any more than current levels?

I am not espousing any point of view here, other than the concerned Canadian who wants to think of his Country as a HAVE country without DEBT!

–C8j