msb@lsuc.UUCP (Mark Brader) (06/29/85)
I don't believe the PCs never intended to repeal pension indexing.
(Or at least, not unless the outcry was much less than they expected.)
They put it in the budget speech as a distraction, a lightning rod if
you will, so that the Opposition, the press, and the public would be
too busy complaining about that (after all, if they didn't, it really
would happen) ... too busy to complain about other budget measures.
And in particular, so that people would not complain about the loss of
3 percentage points of INCOME TAX bracket indexing. As long as we
continue to have inflation at 3% or over, which is probably for a long
time, this change will imply an automatic increase in real tax rates
... every year.
This is what we used to have before the tax system was reformed about 1972,
and I for one am angry at seeing this condition return, even in a limited form.
It does seem reasonable to me that taxes have to be raised at the moment...
but an increase every year into the future is aleph-null increases too many.
Mark Brader
("None of the above")
P.S. This distraction-bluff tactic certainly is effective, if you don't
use it too often. It worked very well for the Ontario government about
10 years ago when they raised the sales tax from 5% to 7%. There was
hardly a protest. All they did was to announce in the same speech that
there was also going to be a new "energy tax" of 7%, and then cancel that.robinson@ubc-cs.UUCP (Jim Robinson) (07/01/85)
In article <679@lsuc.UUCP> msb@lsuc.UUCP (Mark Brader) writes: >And in particular, so that people would not complain about the loss of >3 percentage points of INCOME TAX bracket indexing. As long as we >continue to have inflation at 3% or over, which is probably for a long >time, this change will imply an automatic increase in real tax rates >... every year. > >This is what we used to have before the tax system was reformed about 1972, >and I for one am angry at seeing this condition return, even in a limited form. Yep, it sure worked! We heard zero protest about the partial de-indexing of income tax. Seems like the PCs are just like the Liberals when it comes to hitting the middle class for more money. So make that two of us who aren't too pleased about the latest money grab. J.B. Robinson (Anyone know how programmers can get a piece of the action in the underground economy? :-)
csc@watmath.UUCP (Computer Sci Club) (07/01/85)
>And in particular, so that people would not complain about the loss of >3 percentage points of INCOME TAX bracket indexing. As long as we >continue to have inflation at 3% or over, which is probably for a long Think about it for a minute. What they are saying is that income tax will only be indexed for the amount of inflation over 3%. That means as long as inflation remains above 3% that you are **guaranteed** to to move into a 3% higher tax bracket **every** year! >Mark Brader -bob atkinson watmath!csc
woodham@ubc-vision.CDN (Bob Woodham) (07/03/85)
The changing age distribution of the population seems to me to be a straw-man argument. The Canada (Quebec) pension plan could always be maintained on a sound financial basis. After all, what is actuarial mathematics for? (We might not like what it costs, but that is another matter.) To me, the central flaw is that government absorbs pension contributions into general revenue. In effect, the government borrows pension contributions for its immediate purposes without provision for eventual pay out. (This is a clear conflict of interest position that would not be tolerated in a private pension plan.) Cutting pensions should not be a fiscal option equivalent to raising taxes. It is dangerous when inflation is in a government's own self interest. Two obvious points deserve restating. First, the real cost of past deficits drops as inflation increases. Second, all of us are shuffled along into higher tax brackets in times of inflation and wage rates that keep pace. Thus, there is little incentive for government to fight inflation. I am in favour a full indexing of pensions and income tax personal exemptions simply because I don't want to reward government for inflationary policies.