Letter from Kelowna

Mr. Turner,

My name is Nicholas, I live in Kelowna, BC. Some long time ago I sent you an email or two regarding income splitting.

Just saw you on CTV news giving a press conference on the matter. I am very impressed that you have not let go of this issue, and I want to say that I think you spoke extremely well. I also think that starting with seniors and then moving to families is a smart strategy on your part.

At the end of the day you are indeed correct, it is ultimately an issue of fairness.

My family is one of those that gets wacked by the tax code because most of our income comes from one earner. It is an issue that has bothered from the day I got married. How can it possibly be fair that another couple earning the same total income pays less in taxes?

It would be a travesty if income splitting for both seniors and spouses was not included in the next budget, and if it were to happen it would certainly cause me to rally more than ever behind the Conservative party in the next election. The unfairness of the tax code to single earner families has always been high on my list of gripes with the Liberal government.

It’s a no brainer as far as I am concerned, and in the next election the Conservatives could then claim that the Liberals would surely eliminate the benefit if they were re-elected since they do not value the traditional family at all. The Conservatives could also hold the tax change up as a sound accomplishment, which it certainly would be.

As for the actual cost required to implement income splitting, I think in some sense it is funny money. It is money the government should have never been allowed to have in the first place because the system was never fair to begin with. So if the naysayers claim that it will cost too much, I simply don’t accept that – it is a case of eliminating *excess* taxation and correcting a clear unfairness.

My local MP is Ron Cannan, who I know well. I will get in touch with him to let him know I support your efforts 100%.

Thank you so much for what you are doing. I hope you don’t give up until the job is done.

This is one of a large number of people I have heard from in the last 24 hours who are pledging their support for income-splitting in the wake of the national conference we mounted yesterday on Parliament Hill. I am extremely appreciative of this, as I was walking into national caucus this morning and having a large number of colleagues say just the same thing.

Ron Cannan, MP One of those people was Ron Cannan, the MP from Kelowna who has been steadfast in his commitment to the idea of families and retirees sharing income, getting well-deserved tax equity and easing their financial burden. Ron has impressed me from the first day of meeting him with his sense of fairness and infectious optimism. He is constantly promoting his riding and supporting his constituents, and it strikes me that he understands perfectly why he was sent to Ottawa. Smart guy.

So, Nicholas, there is hope. Lots of it. Many MPs are joining me in this cause, and the more Canadians who send messages and support, the better our chances become. This is the right thing to do. This is the right time to do it. — Garth

18 comments ↓

#1 Catherine on 10.05.06 at 5:51 am

Did anyone catch Liberal John McCallum’s letter in the Toronto Star today
http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1159998616605&call_pageid=968332189003&col=968350116895

McCullum states “campaign slogan might be: “A Conservative government will work to get Canadians back to where they were in 2005.””.

Is he that stupid?

In 2005, under the Liberals, the lowest tax rate was 16% until their asses were on the line and they put in a last minute tax reduction to 15%.
In 2005, GST was still 7%.
In 2005, working people didn’t have the $1000 annual tax credit.
In 2005, parents couldn’t claim their kids sports.
In 2005, trades people couldn’t claim the expense of their tools.
In 2005, seniors only had a $1000 tax credit – not it’s $2000 annual tax credit.
In 2005, after death bed conversion, Liberals lowered the lowest rate to 15% from 16%. Conservative kept 1/2 of the reduction.

So logically speaking, if the Conservatives lower another the lowest rate to 15%, OVERALL, people will pay MUCH LESS tax than in 2005 (even of the death bed conversion).

It’s so sad when a man, who was once considered intelligent, lowers himself to such a stupid level. John McCullum – why are you doing this?

#2 Joanne C. on 10.05.06 at 8:19 am

I’m behind you 100% on this one, Garth!

#3 Joanne C. on 10.05.06 at 8:44 am

BTW, there are many seniors without dental and even prescription benefits (if they’re under 65). This would help to address that inequality.

#4 mike on 10.05.06 at 1:37 pm

THIS IS WRONG. Income splitting is inherently unfair – it taxes single people at much higher rates than couples. Why should one guys taxes get cut in half if he marries an unemployed person?

A flat tax is the only fair answer. Garth i’m disappointed that you haven’t mentioned this at all.

The bias towards “families” may be popular and may play well to the conservative base, but it is discriminatory and counterproductive.

I do not support this, and i am disappointed that you are not addressing the root of the problem – graduated income tax rates.

Suggest you do some more reading on this site! http://www.garth.ca/news/turner-budget2006-EN.pdf. — Garth

#5 Irate Tolerant on 10.05.06 at 1:37 pm

AN OBSERVATION:
As one born in the Roaring Twenties, whose youth was in the Dirty Thirties and reached maturity in the War and Peace Forties, I’m obviously a witness to events between then and the present.

Quite often, some of those offering opinion, on that which occurred before their time on earth, have caused reaction in me such as, “WHAT? Was I in a coma or out of the country at the time? Rubbish! How could that so-and-so arrive at such a notion?”

Then I remember that the more things change, the more they remain the same. Each generation has produced whiners; biased, narrow-minded, selfish, envious, blameless, unproductive, with unreasonable expectation. And those are their STRONG points! But, thank goodness, eventually MOST grow up.

This attitude was manifest for example in the debate among Boomers, Gen-Xers, etc. regarding income splitting for seniors. There seems to be, by many, scant recognition of their elders contribution to society; much of which is taken for granted. They think the old-timers prospered in a period of milk and honey and are the root cause of their problems. How sad then that their phobia prevents otherwise fair minded persons from concluding that income splitting is not only the right thing to do, but the very least that can be done.

COMPASSION. Try it; you’ll like it. What goes around, comes around.

#6 Paully on 10.05.06 at 1:53 pm

Lower taxes for everyone. Jettison wasteful Govenment spending and put the money back in the hands of the people who earn it!

#7 taxed on 10.05.06 at 2:10 pm

Well, here is the same old story, you heard before.

I have a family of 4. Wife stays at home with the kids. We do not believe in dropping our kids off at a day care center @ 7AM to get raised by strangers, and to get a fresh round of the flu.

In return, I pay one heck of a tax bill.

I am viewed as “rich” in the eyes of the government.

I guess rich is someone who raises there family on one income these days. And that is why my wife who is chasing our kids around the house for 10 hours a day is viewed as unemployed.

I wouldnt tell her that without 2 armed guards standing 3 feet behind me.

She works.
I work

50/50

not

100/0

#8 FRank on 10.05.06 at 2:17 pm

Dear Garth And James Flaherty:
I understand at a meeting with reporters before a conference on pension splitting that Mr Flaherty said that pension splitting for seniors was not a high priority and there was plenty of time for that. I would like to remind you both that seniors often do not have a lot of time and while they will most likely be around for the next election it would be nice in the time they have left that they could enjoy the benefits of working all their lives.
Is the only answer to get a divorce and still live together and in that way they could in fact split their income. The fact that not that many seniors come to rallies and meetings associated with pressing the government to be fair in taxing matters and allow splitting of pensions, is not a lack of interest but a physical inability to get around like younger people. Be fair Mr. Flaherty and give the seniors a break and they may give the Harper Government a break in the next election.

Sincerely

Frank Tutt

#9 Kenneth on 10.05.06 at 2:18 pm

I read your article The Turner Report in the Halton Compass newspaper. I agree with you comments on pension income splitting. I agree totally with your thoughts on this issue. Elected officials who do not support or are to involved too deal with this unfair tax will not be elected for long. Our aging population will make sure they are represented on this issue. You have my vote.
My wife and I have been paying taxes all our working lives. Income today is less than working full time. It’s time to help constituents who are on a fixed pension income. With taxes paid over a life time which has been substantial it’s time to give us fair break.

Please keep up the pressure towards this goal.
Please feel free to forward this e-mail to all MP’s

#10 Robert on 10.05.06 at 2:19 pm

Your efforts to implement Pension Income Splitting are commendable and are recognized by the millions of seniors that have a vested interest in this issue. It is a simple matter of fairness as I see it and something that has been rattling around the government for the past decade at least. What it needed was someone to champion the cause and play a leadership role and I sincerely believe that you have taken on that role. I can’t help but wonder where the other members have been on this issue and why they have not come forth in support?

However, now that the media has taken up the issue I now envision a landslide of support from all parties and all members as the realization that this issue may well be the catalyst for their success in the next election. The Canadian seniors will always remember that you are the one that first took up the cause.

Robert Matalis

#11 Dan on 10.05.06 at 2:20 pm

Please add our names to the list of supporters of “Income Splitting”.

We are the prime examples of how our generation lived and worked. I worked for Bell Canada for 32 years, receiving a pension when I retired in 1997. Lorraine was a stay at home mom looking after our 2 children until they were well into their schooling. Lorraine then returned to the work force and worked in positions that did not offer pensions.

We are now in our early 60’s, both opting to collect CPP early as we require this money to be able to live comfortably. Lorraine is now working part time to supplement our income. If I worked part time, my take home pay would be taxed so high, it just doesn’t make sense for me to get a part time job. I underlined our income because that is what it is. Not mine and not her’s…but OURS, and as such, we should be able to split our income and reduce our taxes. This would put more money in our pockets that we would put back into the economy.

Keep up the good work!

#12 Frank on 10.05.06 at 2:35 pm

Looks like global warming isn’t a problem after all. Pretty Rona said so,,,

http://www.cbc.ca/canada/story/2006/10/05/ambrose-questions.html?ref=rss

#13 DMZ on 10.05.06 at 5:33 pm

Frank, did you read the article, or just the headline? I read the article, and I didn’t see anything remotely close to her saying it wasn’t a problem.

The article quotes her as follows:
Canadians’ No. 1 priority is air quality, meaning the purity of the air they breathe, while climate change is “another issue that they’re very concerned with,” she said.

The way you twist everything around and provide bits of information taken completely out of context to suit your point of view only confirms why most others on this blog think you’re a moron.

#14 Judy on 10.05.06 at 9:22 pm

In a few years, seniors won’t have to worry about income splitting. If the REAL women lobby continues to influence the Conservative Status of Women policy, all women will be staying at home popping out babies and being paid $25,000 a year to do it. That is their answer to diminished population growth.
And access to higher education for women will be denied, because this would interfere with her true job: procreation.

#15 Dube on 10.06.06 at 5:36 am

Catherine,

I expect that you are correct, it does seem that John McCallum is playing politics. However I think you need to examine what your list of tax savings actually translates into for a good many people. The average family income in Canada in 2004 was in the range of $62700, with the median at $58100. I would expect for the half of Canadian families whose income is at or below the $58000 figure, the tax measures introduced thus far will not have much effect, and it is those families that need relief the most. Their net incomes will largely be dedicated to the essentials of food and housing, with shopping trips for material goods concentrated at dime-store outlets like Giant Tiger.

http://www40.statcan.ca/l01/cst01/famil21a.htm
http://www40.statcan.ca/l01/cst01/famil107a.htm

I’ve analysed my own tax circumstances and from my estimation, the measures introduced in the last budget may just be sufficient to render my taxes neutral to what they were pre-budget.

First off, as I’ve stated once before, my income taxes have increased by $17 / month since July 1, and I estimate that my monthly GST-taxable purchases do not exceed $300-$400 range, rendering my net annualized increase in taxes to about $160. From that, I have to subtract tax credits. The only ones that I see that I may have claim to are the work credit and possibly the child sports credit.

Tax credits do not translate into dollar-for-dollar savings; to determine their actual net amounts, they must be multiplied by the corresponding tax rate. The tax rate for amounts between $0 – $36,378 is 0.155, as given in either of these CRA documents:

http://www.cra-arc.gc.ca/E/pub/tg/t4032on-7/t4032on-7-06b.pdf
http://www.cra-arc.gc.ca/E/pub/tg/t4127-jul/t4127-jul-06e.pdf

Thus a $1000 tax credit translates into a $155 tax savings. A cross-reference to this article substantiates the calculation:

The Canada Employment Credit will start off at $500 for this year and increases to $1,000 next year. On a net basis, taxpayers might expect this credit to put cash in their pocket of about $155 in 2007.

http://www.theglobeandmail.com/servlet/story/RTGAM.20060502.wpersonaltax0502/BNStory/budget2006/home

That said, there is one qualifier in the budget statement with respect to the credit that is of concern and may affect the amount:

“Introducing the new Canada Employment Credit—a tax credit on employment income up to $500 effective July 1, 2006, to help working Canadians. The credit amount will double to $1,000 as of January 1, 2007.”

It’s that “up to” that I’m wondering about. If the full tax credit is not given outright, but has to be justified in some manner by first qualifying as eligible expenses, then I can’t be certain that I will have such claimable expenses. In that case, the effect will be to lower or even negate the credit amount. I may have to wait till next April to see.

Now with respect to the child sports credit, again it will depend on what is claimable. First off, I doubt that I would even come close to the $500 amount in a year. It might be $100-$150, depending on what’s claimable. If the $500, starting next year, is targeted to narrow definition of what qualifies as “sport”, then very little, if any, of that maximum $77.50 (or $20 in my case) will come my way. Below is the essence of a post that I made here a couple of months ago when I heard that the Government was soliciting for ideas and feedback with respect to what the credit should cover, that illustrates this:

My son isn’t much for organized sport but he loves to ride his bike. I just bought him a new one this summer and I expect it’ll still be big enough next year, but based on past experience, that’ll probably be it before it has to be replaced. This summer he attended a church camp and was introduced to skateboarding. He was quite taken with it, but was not very skilled. I’d like to get him a board and maybe even a few lessons from a board shop, if I can find such a thing. I had taken him cross-country skiing when he was much younger, but he wasn’t very coordinated (ended up returning on my shoulders). But now I think he’s ready for it. He’d also like to learn how to snowboard; I’d like to start him first with downhill skiing, something I am proficient at and could therefore assist him with without having to purchase lessons, then let him move on to snowboarding later after he gets the whole balance and edges thing worked out. He’ll need skiis, boots and poles. During the summers, we like to hike, but I am getting tired of being his porter so would like to get him his own backpack. Then of course there is also the canoeing and kayaking we do; he’s grown so much lately, I need to purchase him a larger life jacket. I’m also considering enrolling him in judo classes this winter, which will require purchase of a gi. The chlorine encountered during swim lessons are pretty hard on swim suit fabrics and goggle rubber, so often need replacement.

Now, I have nothing against organized team sports enthusiasts doing their own thing, like the hockey players out there, but if I am expected to reimburse those folks for their games, uniforms, helmets, shin pads, and broken hockey sticks through my taxes, then I’d like equal consideration for the activities and equipment mentioned above (after seeing the price of hockey sticks these days, the replacement cost for a blown innertube or bent ski pole is a bargain in comparison). As for the costs of engaging in the sports themselves, again most of what I’ve listed is a bargain (except maybe lift tickets, but in my view, those would be analogous to the cost for ice time levied through hockey team fees). Christmas is coming and come to think of it, there may be ice skates on both of our lists (forgot to mention the skating we do on some of the community rinks).
I believe the above description illustrates some of the diversity that would have to be supported if this bill is to be inclusive and not biased towards subsidizing a few selective activities. Thank you and best of luck introducing fair and equitable legislation that all sporting families can benefit from.

#16 richard on 10.06.06 at 10:14 am

Judy – what exactly to you eat for breakfast? Why do you always put a feminazi spin on everything. REAL women want an equally beneficial choice – to enter the workforce or to raise their children. Should they not have that choice? Are you saying that women who raise their children are non-achievers? In the 60s, the whole movement was about giving women an equal choice. I also think that fathers should have an equal opportunity to raise their children. If I had to do it over, I would opt to stay home. I, for one, am quite happy that I had my mom at home when I was little. I cannot imagine being raised by an outsider. I also know some fathers who stayed home while their wives pursued their careers – they made the choice together and the outcome was totally positive.

And don’t forget, Judy, REAL women is a group of WOMEN, headed by a WOMAN lobbying for the rights of WOMEN to make a choice. At the moment, WOMEN do not have an equal choice. If a WOMAN chooses to raise HER children which SHE bore (or adopted), SHE is penalized in favour of WOMEN who choose to take their kids to day care and pursue their careers.

So, Judy, how about letting PARENTS have an equal choice in raising their children.

#17 Paul A on 10.06.06 at 11:12 am

Why is the woman penalized if she stays at home? Because her husband is taxed at the same rate as every other person out there earning a living? I don’t think that’s a penalty, rather a choice.

Along the same lines, if this income/tax splitting were to occur, why should the wife of a rich husband who is pulling in $250k per year, the wife that is able to hire a nanny/maid/cook/dog walker, why should she “get paid” more than the wife of a husband who is pulling in $40k per year who has to look after the kids, while cleaning the house, doing the laundry and cooking. This doesn’t seem very fair to me.

Staying at home and raising your own kids is very special and should be seriously considered for reasons other than money. If money is more important to you than staying at home and raising your kids, then go find employment. If raising your family yourself provides more value to you and your family’s life, well, the choice is clear. Demanding money to do so, I guess is your prerogative, in this democratic country of ours.

#18 Catherine on 10.06.06 at 12:05 pm

Dube, under this budget, 2006 tax rate is 15.25% and NOT 15.50. So please redo your calculations.

At the VERY least the .25% increase and the reductions of $500 tax credit and reduction in GST would be neutral. Don’t forget the persenal exemption has also gone up.

As I don’t know if your personal circumstances, your $17 dollar “increase” may mean anything – can be your payroll is deducting the 15.5 rate or including Liberal McGuinty health tax….. the indicator will be next tax filing.

Anyway – my point that McCullum was not truthful still holds – that his credibility has deteriated – as he only stated about the persnal tax rate increase and ignoring all tax reduction facts. Would you want him to be your tax accountant? or business advisor? Not likely.