Canadian Personal Finance Blog

Where has all the money gone?

So this topic comes from a comment from my friend Michael James on commenting on my “self pitying” posting of getting older yesterday. The quip is actually quite topical, I have earned well over a million dollars in my 20+ years of working. Where did all that money go?

If you think about it, where it always goes:

• Taxes
  • Federal Taxes which had to have eaten 10-20% of it over the years
  • Provincial Taxes which ate about the same if not a little less
  • GST and PST can’t even fathom how much I have paid for those little consumption taxes.
  • Municipal Property Taxes, which keep going up as well. How much? 4-8% of my income is a good guess.
  • Employment Insurance payments, and I have never claimed against this system (touch wood). That is money completely lost.
  • Canada Pension Plan Payments (and a little QPP as well), hopefully I’ll get some of that back one day.

  That’s about 25-45% of the money right there, and I haven’t spent a cent yet!

• Living, which might include rent and mortgage payments and such, which has to be about 10-20% of that money.

So I have about 40% of my income left and I haven’t fed anyone, bought a single coffee or gone on a wild spending binge?

It’s interesting just to look back and if I told myself when I started working that I’d have earned over a million dollars by now, but not be living in a villa on the Riviera, I don’t think my younger self would have believed it.

Tax Preparation Coming

It is that time of the year to start looking at tax software and start monkeying around with my taxes. Our friend the Canadian Capitalist is looking at Ufile instead of Quicktax this year. Quicktax seems to be cutting the number of possible returns to be done down to TWO (2) but I need to research this more to figure out whether I can use this or not, given my oldest daughter now is old enough and has income. Stay tuned, I am sure I will rant more about this topic very soon.

Move Complete

My Blogspot account is now permanently aimed at this site. The move over is complete, I hope.

Our friends over at the Fraser Institute helps you figure out when you stop working for the government, and start earning money for you (figuratively speaking of course, since you’ve either died or been evicted if you’ve only been giving your money to the government).

What will you do with this new Freedom?

Go, sons (and daughters) of Canada, and Calculate Your Tax Freedom Day!!!!!!! and what will you do with that Freedom? Maybe go and buy a copy of Braveheart? Or Borrow it from the Library?

I forgot to remind you yesterday, “Sorry ’bout that chief!” (to quote Maxwell Smart), but if you owed money (in Canada) you needed to have your tax return in the mail by midnight last night. In Ottawa we have the luxury of having a tax office here, so I think they have someone picking up ’til midnight, so for all you procrastinators, you could have got it in last night! Now remember that deadline is if you OWE money to the government, if you don’t the tax folks don’t really care (especially if they owe you money), but if the government owes you money, why wouldn’t you want it?I always thought a shoe phone might be a great invention to try to sell as a novelty, but I suspect that there is a patent on it already.

Given we tried to limit our eating in restaurants this past weekend, Stats Canada has just published is topical: Sales in Restaurants and that ilk of business is up 2.4% over last year at this time. Good for the Food Services industry! Always glad to see a business continue to flourish, however, folks, that’s your money. Eating out is one of the biggest “luxury” expenses all families have (including my own) and one of the areas where you should control your spending. Growing up I remember going out for dinner or ordering in being something “special”, it just doesn’t seem to be any more, for our generation (yes I am very old too).

My guess would be BOTH, so thus the budget will be simply a political “ruse” with a lot of “would be nice” stuff in it, that will never see the light of day, to convince me “John Q. Public” that the Tories are the right choice to run the country (a cynical point of view, but then again, as a Christian, I think cynicism is what keeps the world evolving and learning).

So what has Count Floyd (Jim not Joe Flaherty) the Finance Minister got cooking for us? Dr. Tongue’s 3-D House of Capital Gain Cuts? Whooo…. that’s scarey Igor! It’s like in Alien but instead of the capital gains shooting out of your stomach, they jump into it!!! WHOOO….. scarey kids!

No seriously, the new budget has a bunch of crap possible in it:

• A tax break of some kind for capital gains, which was promised in the election last year, so the Tories need to do SOMETHING about this, but what? Who really knows? Maybe they will bring back Brian Mulroney’s infamous $250,000 life time exemption? That would be cool.
• An increase to the personal exemption? That would be nice too, since that helps everyone across the board.
• A TPSP? What’s that well that is a tax pre- paid savings plans that the C.D. Howe Institute thinks is a GREAT idea. You put after tax money in there, but it grows tax-free so when you take it out, the growth isn’t taxed. I like that too, if I could figure out how to make my money grow correctly.
• Income splitting? Well, if I see that, then I know that the Tories want a spring election, because that is something they are going to keep in the “bag of tricks” ’til they need it, because poor suckers like me, will vote for the Communists if they promised that!

No matter how it’s sliced, there will be many promises made, but how many will be kept?

More interestingly, the CCPA (Canadian Centre for Policy Alternatives) thinks the Tories are frittering away the Government’s surplus by cutting taxes.

“Prime Minister Harper’s tax cut plan is so expensive, he may soon find himself having to choose between putting the nation back into deficit or slashing programs,” says CCPA senior economist Ellen Russell.

Let’s hope it does not get to that point!