As I have told you, I sit on the House of Commons finance committee, which has been tasked by Jim Flaherty to come up with ideas for the 2007 budget. What a process that has turned into…
Over 270 special interest groups are in the middle of dropping about 2,000 pages of summary briefs on committee members, all asking for money. The museums want more. Child care advocates want more. Universities want lots more. Scientific research wants more. People worried about heritage architecture want more. Aboriginal peoples want more. Charitable organizations want more. Unions want more. Corporations want more.
This coming week the committee is scheduled to sit for about 20 more hours, listening to this litany. The week after we’ll be in eastern Canada, then The Big Smoke, doing the same. And on it will go. And on and on. And while I find it interesting, I lament one fact – there is no special interest group called “the middle class.â€
If there were, then the committee would be hearing a whole lot more about a few topics which has only been skirted briefly – topics that I plan to give much more voice to in my own report to Flaherty next month.
 One, as you know, is the justness of letting retired couples split pension income between them.
 Another is the screaming need for new retirement savings mechanisms for the house-rich and cash-poor homeowners of Canada. Once again, I will be promoting the wisdom of an after-tax plan along the lines of the US Roth IRA, to complement the much-flawed RRSP.
 Another is a new way to accomplish environmental and infrastructure needs to benefit us all, without more taxes. Yes, government-backed, dedicated-use, tax-exempt bonds.
 And one other is the move to a simplified, integrated personal-business flat tax system. Enough talk, already. Let’s just get this going.
 And, while we are sorting that one out, the immediate need for income-splitting for families with children through implementation of a Family Tax Return, such as exists in the States and in France.
Recently on this blog, I made a substantial argument for this change, and will be spending the coming months giving it a lot more voice. It is simply nuts to have a tax system predicated on incomes of individuals when the family is the basic economic unit of society. Therefore we should take household income into account when determining exemptions and taxation, and not just when we want an excuse to deny benefits to citizens, as is currently the case. The system today sucks and blows at the same time, and it has only been made more complicated by the current government with its raft of new tax credits.
So, let’s put away the bandaids, and bring out the chainsaw. A flat tax, please. And in the few years it will take to get there, let’s establish the very common-sense principle of basing overall tax on overall household income. This will end the ongoing and blatant discrimination against (1) single-income families as opposed to dual-income ones and (2) the war on the family being waged by the Canada Revenue Agency.
Thanks to the wizards at the research branch of the independent Library of Parliament, I have been armed with some interesting statistics.
Increasingly, given the complexity of society, problems with schools and the genuine desire of many parents to bring their kids up with the best information and the best values, we are seeing many couples make the decision to have one spouse stay at home and nurture children. My mom did that, and look at me! Okay, bad example, but you know what I mean.
Door-knocking in Halton, this is the change I heard most requested by middle-class families, many of them struggling heroically against runaway real estate costs and daily living increases. They complain that families where only one person works outside the home are unfairly taxed versus dual-income households. On the other hand, supporters of the status quo argue that when two people work, they face higher job-related costs and day care expenses, which evens things out. So, what is the reality?
(a) Dual-earner families with two children
The average family income is $78,300 for these families. Estimated household income taxes (of all kinds, less transfers) are $25,128, and the average after-tax cost of regulated child care is $9,172. That puts net income at $43,970.
(b) Single-earner families with two children
The average income of these families is $55,200. The average of taxes paid (provincial and federal, commodity and transfer payments, net of government transfers, as above), is $16,189, and there are no net child care expenses. This means a net family income of $39,011.
The inescapable conclusion is that dual-income families have more revenue, more expenses and more disposable income. If the revenue of both kinds of families were equal, then you would see an even more significant variance in the disposable income between the two – with dual-income earners vastly ahead.
This is a situation our tax system should, and must, address by providing a Family Return that lets couples split income between them for tax purposes. The reasons are varied, and valid. We need families, and we must have a system that is truly just.
As I will detail in my next post, we can afford this. No matter what you might hear a finance minister say. 
36 comments ↓
Probably all good ideas, but I find really interesting this idea the wisdom of an after-tax plan along the lines of the US Roth IRA
I am glad we can afford this???
Asking politicians to restrain themselves with our tax dollars is like asking children not to gorge themselves on Halloween candy. Sometimes it’s best to just take the bag away.
http://www.taxpayer.com/main/news.php?news_id=2395
“I am glad we can afford this???”
I was talking about all your ideas, Not the after tax plan similar to the US ROTH IRA!
“Aboriginal peoples want more” What year will we stop funding these people. I don’t mind giving more tax dollars to them when they start paying taxes on cars and cigarettes and the like. Why do they pay so little tax and then want more tax dollars spent on them? I would love to pay less tax and recieve more services then my neighbour but it does not seem to happen. Regards
What year will we stop funding these people.
That would be the year we give them back all their land. And we aren’t funding these people. We’re leasing Canada from them.
The average family income is $78,300 for these families. Estimated household income taxes (of all kinds, less transfers) are $25,128
Did you make these numbers up, Garth. I think you must have because conservatives consistently tell me that Canadians lose 50% of their income to taxes yet these numbers show this particular group only losing 33% to taxes.
As for your comparison, it’s mind bogglingly dishonest even for a conservative. Comparing a 78k income to a 55k income family. Puh-leeze.
It also trashes your argument. Despite making 23k more, the 78k family only comes out a paltry 5k ahead of the 55k family. So clearly it’s not single income families but duel income families who are getting the short end of the stick.
The numbers come (as I said) from the independent researchers at the Library of Parliament, and are based on 2003 stats. The net tax number is arrived at by taking all taxes and deducting government transfers. The comparison is valid because it reinforces my argument, rather than trashing it – showing the average two-income household makes more money, pays more taxes and has more disposable income, than single-income families with a lower average salary. When families of the same salary are compared, the dual-income family is hugely ahead. — Garth
Frank,
Re your On the Hill 1 posts of
10.13.06 at 3:35 and 3:53 pm:
Two feeble rejoinders! Is this the best you have? But even were I to grant a concession, the unfavourable score would be;
LIEBERALS: 200
CONSERVATIVES: 002
Not surprisingly, you have viewed the second event through red-tinted spectacles. Harper didn’t stick his foot in his mouth. He kicked it squarely up the minds of Lieberal flip-floppers. And it was the imported American saviour who made the colossal anti-Israel goof. Harper merely spoke an obvious truth. At least that’s the way B’nai Brith Canada sees it!
As to the first retort, BIG DEAL!
Dream on Frank, dream on. That’s about all you have left.
By the way, on the question about solace, I presume your answer is no.
Marc…apparently 10 billion a year is not enough for the aboriginals…..give a man a fish and….you know the rest!
Robert….try making a contribution to Canada for a change and you just might become a Conservative…..in the meantime please spare Garth and this blog your asinine statements…
Asinine is an understatement. If its true that we are leasing Canada its one hell of an expensive lease. And when is this lease paid off, a thousand years a million years? As far as I’m concerned the “lease” has been paid several times over and I’m tired of paying for MY land ad infinitum..
Robert…“That would be the year we (forgst this we, try I) give them back all their land.
Put your money wear your mouth is. Presumably you own the land you live on…..find an indian, aboriginal, first nations person and give it to them!
Garth I would love to be on that commitee the only thing that I would fund is the Military and the roads thats it. There is no moral authority to take one mans money and give it to his neighbour. Anyone should give on his own not by aggressive force by the government.
Try………..where yuor mouth is.
yuor I give up!!!
Garth, you have yet to address the fact that dual income families work twice as many hours. And why should income splitting be based on age, when that is no indicator of ability to pay?
That’s actually not statistically true, since most dual-income families have one chief breadwinner and one person who works far fewer hours. Based on age? I don’t know what you are talking about – other than we should allow pensioners to split income immediately because they are unemployable, on fixed incomes, and have the least options. My preference is to allow income-splitting for all families. — Garth
Gee, when I read the list of people with their hands out, it was the corporations looking for welfare that grabbed my attention.
How many tax breaks do Big Business need? How large does their bottom line have to become before the feds stop greasing their palms?
BTW: Stephen Harper does not know when to keep his mouth shut. His comments insinuating that all Liberals are anti-Israeli is ludicrous. Harper cuts programs to women, children, and literacy, Is he anti-Canadian? Harper criticizes American, French, Pakistan, Germany, etc for their various social and foreign policies. Is Harper therefore anti-American, anti-French, anti-Pakistan etc?
He lives by double standards. It is O.K. for Conservatives to criticize and disagree with foreign governments, but not O.K. for Liberals.
Next, he will be calling all Canadians who do not agree with his rigid stance on Afghanistan, “unpatriotic”.
The Republicans in America used these tactics for 8 years-now they are in political trouble. Hopefully, most Canadians will see through this flag-waving, “love it or leave it” , “with us or against us” mentality and tell Mr. Harper that that is not the kind of leader we want.
Aahhhh………..Afganistan again.
And you think our soldiers have time to worry about judy, franke and Talliban Jack???
This is a video of the “Red Devils” from Edmonton. (***language – be warned of liberal use of F-bombs!)
http://images.military.com/Video/061011_canada.wmv
4 part series. Watch the others here:
http://www.youtube.com/watch?v=9_S9P1kMNuM&mode=related&search=
http://www.youtube.com/watch?v=qaC-w2dIxZc&mode=related&search=
http://www.youtube.com/watch?v=B2r3C0PJ1LM&mode=related&search=
Canadian troops landed in South Korea in the spring of 1951 and fought off North Korean and Chinese troops until a cease-fire in July 1953. When the war stopped, Canada stayed in a peacekeeping role until late fall 1954. All told, Canada suffered casualties of 1,558 – 516 dead and 1,042 wounded.
Fortunately Judy wasn’t posting back then, but because of Canada’s brave soldiers she can today. Would she prefer living in North Korea?
South Korea, which arose from the ashes of war to become one of the leaders of the industrialized world, provides its citizens with the amenities of a modern society. In contrast, their brethren to the north in the dull grey world of founder, Kim Il-Sung and his son successor, Kim Jong-Il, live in poverty, repression and conditions of frequent starvation. The salvation of the Republic of Korea from the latter is coupled with the knowledge that the free world as we know it today could be a great deal smaller if the UN had not intervened.
That is not a legacy to be ashamed of. Freedom has never been free; we have to be prepared to fight to keep our liberty from those who would enslave us.
It is true we have had no casualties from terrorism in Canada over the past year. With leaders grounded in reality and a military serving with courage, we aim to keep it that way if we can. Only an utter fool would propose that we allow terrorists to gain strength and train overseas so we can eventually fight them in the streets of Canadian cities.
While brave man and women risk all to ensure our safety and security, utter fools bleat about the costs and complain about leadership they are incapable of providing.
Wear red friday
Judy you just LOVE to put your own crazy spin on just about everything don’t you? Harper never ONCE said ALL Liberals are anti-Israli. He said that a number of the contenders for the Liberal leadership have made comments suggesting they were. Boy you lefties just can’t resist pulling a Chretien and talking outta both sides of your mouth.
And the programs he cut were either not producing results or were sham programs designed to grab votes but do nothing – neither of which deserve a red cent of my tax dollars.
Honestly between you, William and Robert you’d think Canada had another province – LA LA Land. How’s the weather there in your rose-colored reality?
The reason so many Grits are pissed about PMSH comments about Iggy is…..they were very effective!
Judy…most 70% in a recent poll found Harpers comments fair and resonable…where is your majority?
Robert, Robert, Robert….. Garth was stating income tax that went to make up the 33%.
Now, add to that 3000-4000 a year property tax.
Then, add provincial tax of 8% on just about everything.
Then, add the federal GST tax of 6% on just about everything.
Then, add the provincial excise tax on gas (17 cents per litre in Ontario)
Then, add the federal excise tax on gas. (10 cents per litre)
You will find that it will add up to roughly 50% of total average income earned.
Is that clear enough for ya?
Only pencil-necked geeks deal in what is statistically true. Most families exist in the real world where both parents work full time, out of neccesity.
So what are you saying, a retired couple earning $300k per annum should income split while a single parent making $30k should pay the full shot? Give your sorry tory head a shake.
High-income couples would save absolutely nothing by income-splitting. Maybe you should wake up before you start typing. — Garth
For Judy and other Lefties and Libranos.
You shouldn’t swallow the Liberals spin so easily, you really got sucked in on how Mr. Harper put his foot in his mouth, the press nor the CTV poll bare that out as evidenced by some of the MSM today.-
Today’s Ottawa Sun Editorial:
“Prime Minister Stephen Harper on Thursday set the Conservative cat among the Liberal pigeons when he said Ignatieff’s “war crime” comments were typical of the generally anti-Israel positions held by most Liberal leadership contenders. We agree. Ignatieff’s ramblings on the Mideast, and the hypocritical attacks on them by other Liberal candidates, who were no friends of Israel during its recent war with Hezbollah, suggest all that is wrong with the Liberals. Don’t like their principles? Just wait for a while and they’ll have new ones.â€
Peter Worthington in today’s Toronto Sun:
“You’ve gotta laugh or else you’ll cryâ€.
“What else can you say about a Liberal leadership race that has six weeks to go and is already a comedy of extended errors�
“The disquieting thing about the “race” is that someone is going to winâ€. “Anyway, the damage Ignatieff may have done to himself among Israeli supporters and others, isn’t mitigated by the newspaper and TV shots of his main rival, Bob Rae, jumping bare-ass into a lake with CBC If it’s all good fun and regular guy behaviour, why then pixelate Bob’s and Rick’s asses, as if it’s naughty as well as undignified? Blurring facial and private parts images is what TV does when unconvicted people are caught in scandalous or embarrassing situations. The pixelated TV shot implies guilt of some sort. At least Rae knows what he’s doing.â€
“Saying you are not anti-Israel comes close to insisting some of your best friends are Jews — a favourite of bigots and those who protest too muchâ€.
“With Liberal contenders like these, a spring election will likely be irresistible for Stephen Harperâ€.
Jim Travers in todays Toronto Sun on the Liberal frontrunners:
“It would be more convenient if one contender combined future expectations with past experience. But if that candidate is on the ballot, it’s not a former professor repackaged as an idea or a one-time premier held hostage by memories”.
I am sure that Mr. Harper is really enjoying this.
So what what if the numbers were 60,000 for the retired couple and still 30,000 for the single parent? The point is for your demographic to pay less- the retired couple or Sara eating bonbons and watching Scoobydoo, someone else will have to pay more- the single parent or the single person. Go back to the drawing board, or better yet, the private sector.
“The inescapable conclusion is that dual-income families have more revenue, more expenses and more disposable income.”
No kidding garth. Many working women earn MORE than the cost of child care because they are professionals, have advanced degrees, are highly skilled, etc.
Maybe everyone should be paid the same amount in society regardless of experience, education, rarity of skills, willingness to take risk, etc? Good thinking garth.
Oh, I also think you should declare an AXIS OF EVIL in the war on families. Who would they be Garth? Lets say they are single people, or women that refuse to be good wives and stay at home, and families that have to both work to meet the high costs of housing that your generation have spawned.
In any case, you are right to fight against the un-christian evil that threatens the traditional family.
God bless you Garth.
So why is Harper and his party down in the polls again? I think they currently sit around 36% with the Liberals at 31%? And in Quebec the Conservatives are now in 3rd place, 4 points back of the Liberals. And with Harper having the stage all to himself for most of the summer you would think the party would have risen above the 36% they had in February. So what is holding this party down? Poor leadership? Poor strategists? Poor tactics? Poor policy? Perhaps a combination of all of the above?
Judy. Acording to actual statements by Porky Martin in the last election unless you agreed with HIS vision “thereby the lieberal idea” of what Canada should be we were all UN-CANADIAN
Garth, high income families would save with income splitting.
Take a wife earning 120,000 a year and the husband NIL. One way, the wife files her income based on 120,000 earnings (she can claim a tax credit for her husband). On the other hand, if the wife can split – then each files their own income tax based on 60,000. Different tax brackets!
Catherine – you crack me up. You are my kind of people. Robert and Judy are off their meds most of the time.
I agree about the aboriginal payments – most of the dollars go everywhere but to the actual aboriginals themselves. My grandparents came here, like many other immigrants, with nothing. They worked – wow, what a novel concept – and they saved – whoo, this is too much for me – raised their children (my parents among them) and built good lives for themselves. No handouts – just honest work and diligence.
As for literacy – my grandfathers taught themselves to read and write English, French and Arabic (they were illiterate back in Lebanon from where they came). My grandmothers – no, they did not – it was that way in those days and thankfully not that way any longer here in Canada. My parents went to school, studied, did their homework and learned to read, write and speak. The same goes for my generation. Why do we need these funds for literacy? To support academics like Judy and freeloaders like Robert who never looked beyond their little walls at the big picture.
Women need funding? Why? Women are every bit as capable as we men at earning their own living. Unless, of course, Judy and Robert are saying that women cannot possibly be capable of making their own way in this country. And before you talk about a glass ceiling, we seem to have a number of female CEOs, Ministers, Deputies, chair persons etc.
Oh, and Judy – are you actually a woman? It is difficult to believe since you want Afganistan returned to the women-hating Taliban. I recommend that you watch the movie Hotel Rwanda.
Robert
I agree that this land belongs to Canada’s Aboriginal peoples … or at least much of it. And I do agree that we still have an obligation to support them. However I do also think that we need to move to a model of there self sufficiancy. That may mean self governance.
Richard
My grandparents all came to Canada and worked hard as well … just like yours. Before Confederation Aboriginal peoples worked and lived on the land as well and created a civilization that was generally peaceful and prosperous.
When we arrived we destroyed that civilization … in the USA it was a slaughter. Spend some time in history and understand what happened! Realize that aboriginals put there trust in us and we betrayed that trust not once but many times over. Doing the right thing is never wrong … nor is it a sign of weakness.
If you do not understand that you don’t understand strength.
JUDY,
Nice to see that you are concerned that Mr. Harper is ‘down in the polls’.
Your commentary would be meaningful IF today was election day. BUT Judy, like most of your comments, they are not as today is NOT election day. As to your ability to predict with any degree of accuracy what will happen when that important day sometime time in the future occurs, I doubt it will be any better than in the last election when you no doubt predicted a Paul Martin victory?
You just seem to have difficulty realizing that Stephen Harper is a hell of a lot smarter than you are Judy.
You are sounding more and more like a ‘dipper’ with your inability to come up with any comprehensive, workable solutions to the perceived problems you envision and do not recognize or give credit to those who do. I guess that “it is your job to criticize the government” for any and all reasons, like a paid Liberal shill. Do you eat peanuts and drink beer?
Judy, I will be looking forward to election day again when you, Frank and Red Robert, are enjoying yet another meal of crow.
BTW Which of the four liberal clowns in the Liberal comedy show are you supporting?
And a secondary question: Which of the Dipper’s daft resolutions were you supportive of?
Gary
Funding the Military and roads would leave Canada as a banana republic. Taxes generate wealth and activity in the public and private sectors. Be happy you can pay taxes … Billions of people pay no taxes at all in this world and they earn $1.00 /day. There governments are not concerned about development and taking care of citizens … Oh and they can brag about NO TAXES!!
I agree that this land belongs to Canada’s Aboriginal peoples … or at least much of it. And I do agree that we still have an obligation to support them.
KG,
No, No, No, emphatically no.
It is not their land it is land that belongs to Canada. What happened a hundred, 2 hundred, or 3 hundred years ago, cannot be corrected today. Our ancestors fought them, they lost. It is a cruel fact of history.
What we should be doing is saying we will no longer acknowledge land claims (heck, I saw one in the paper the other day where they made a claim on Toronto Islands). The mistake that our ancestors made was to isolate them on reserves and institutionalize them. They should have been assimilated.
What we should be doing is opening ‘immigration centres’ on the reserves and invite them to settle in Canada. If 100+ cultures can come from all over the world and, for the most part, thrive and contribute to our wonderful country, why in hell can’t the people who are already here do the same thing?
No more money, no more land claims. Take the funds away from Indian Affairs, and fund an ‘immigration’ program. After 5 years close down that funding.
It is absolute nonsense to perpetuate this travesty year after year after year. There isn’t a square inch of land that they won’t lay claim to at one time or another, and we will be dealing with this ad infinitum…
Ed
Your response is typical of many people in this country, narrow and shallow.
We systematically destroyed a civilization that had gone on for 1000’s of years. This is nothing to be proud of Ed! The Nazi’s liked to assimilate, I hardly think that is what we need to be doing or should have done.
We put Aboriginal people into concentration camps and left them to die …and if you have been to a reserve today you would be shocked.
This should not be happening! We do need to come to a solution and allow some form of autonomous self governance with sufficiant land and resources.
This is only fair and it will say much about what Canada stands for. I would be very proud if as a country we would collectivly provide this as a gift to all aboriginal people … We would be on a new level of understanding and cooperation that would be unprecidented in the World. This would provide a future for all Aboriginal people and all of Canada.
KG,
I don’t disagree with you, but history is history. I absolutely agree that these people were wronged. I do not believe that my attitude is shallow, but the claims are patently ridiculous. As I understand it, various tribes on Vancouver Island have made claims that total more than 100% of the land mass.
Should the Normans give England back to the Saxons; should they in turn give it back to the Picts?
The aboriginals would be far better off today if they were integrated members of our society, like the immigrants who came here: English, Irish, Scot, German, Italian, Pakistani, Indian, Chinese, and on and on…
So, why don’t we do that instead of trying to proliferate that which will not work? Self-Governance? Are we a country or not? Should each race that exists here have self governance? If you give it to the aboriginals, why not the French in Quebec? They have been here for 400+ years?
KG,
By the way, the Nazi reference is offensive. Do you like integrate better than assimilate? If so, please substitute. In the Toronto area, there are 100+ cultures living more or less peacefully. As far as I know, very few of them are Nazis.
Ed
Sorry you think the Nazi reference was offensive. I used the analogy because assimilate and integrate in the context of Canada’s Aboriginal people is very offensive. We put these people in recerves that where more like concentration camps. We don’t want to admit these errors, we are afraid to own up to our forefathers mistakes.
Nations become better when they are ready to acknowledge past mistakes and correct them. What the Saxons and Normans did is not our concern here. The point is that we have a chance to make the wrongs – Right! Some land, Some money, And a form of self-governance would be appropriate considering what has been done. If we give it freely and with dignity the past will stop haunting us.
The reason that we give and give and give is because we are collectivly feeling guilty … When we admit our mistakes and make it right there will be no need for guilt.
The Germans are learning about this regarding there Nazi past and the Jewish people. We can do the same.
We have given, over the years Billions upon Billions of dollars, year after year after year. Hardly, some money a lot of money.
As far as land is concerned, you willing to give up the property you live on? They can probably make a legitimate claim to it.
Why is it wrong to have them join a multicultural society that is the envy of much of the world?
What you are describing just will not work. It leaves them in isolation, yet within our country.