thompsm@utecfa.UUCP (Mark Thompson) (08/08/84)
Looking back at my original remarks I realize that perhaps I was not very
diplomatic. Perhaps it is not so much the fault of these people as the
political process that exploits them. As some of you may have already seen,
the inevitable political TV commercials have made their debut. In typical
fashion the Liberal party has stooped to its tactic of insulting
Canadian intelligence with that "quiz game" ad. I haven't seen all the PC
commercials yet so I am hoping that they do not resort to the same sort
of sickening garbage in their ads. Credit to the NDP for sticking to what
these commercials should be - presentation of party policies and intelligent
rebukes of other party actions and promises. The Liberal party would have
been better off maintaining an image as presented in some of their other
ads (ie. John Turner talking about why this country needs new? leadership).
I must say that my original letter has certainly increased activity in
this previously comatose section of the net. Returning to my opening statement
of this article, it was unfair of me to generalize as I did. I know many
people with an ethnic background and I don't wish to insult them. Unfortunately
when I wrote my original article I got carried away while thinking about the
ineptitude of our federal government for the last two decades. Certainly the
Liberal party made a greater initial effort in courting the ethnic and French
vote but this is no longer necessarily the case. Hopefully voters of all
backgrounds will in the future vote for the party that offers long term
hope for the future instead of voting according to tradition.
I have heard references on the net to Mr. Mulroney as the 'TV' man.
So what! I thought that is what many Canadians wanted. I remember all
the complaints about Joe Clark because he didn't 'look' right. Same thing
happened to Robert Stanfield. It is unfortunate that these two men lost
their chance to help Canada simply because they lacked glamour. Hopefully
Mr. Mulroney has the qualities on the inside too. So far I haven't seen
too much that indicates that he isn't a man of character.
The prospects for the election are definitely looking better for Canada.
Forget the Gallup Poll, it's almost two months out of date. It is good
to see Turner creating his new team out of such previous unknowns as
Keith Davey. So much for a change.
Should the PC's attain power for a considerable period of time then I will
gladly critize them if they also prove inept. At the present time however
there is little to indicate that a change in government would not be
beneficial to this country.
By the way it is interesting to recall major promises made during previous
elections:
- No wage and price controls!
- 18 cents a gallon is too much!
- (not necessarily an election promise but...) a TEMPORARY tax
on gasoline to pay for Fina (ie. Petro Canada)
Interesting.
Another interesting tidbit regarding one of those fantastic federal budgets
set upon us in the past (I believe it was Mr. MacEachen's (sp?)).*** Previously
income was averaged over three years(with some prorating) and therefore a
person entering the workforce would normally enjoy reduced taxes for the first
two or three years. This is was very beneficial to the economy in the sense
that it is people entering the workforce (a difficult task these days) who
are most likely to pump their money right back into the economy (cars,houses,
clothes,furniture,appliances,etc.). Well this was replaced with an item known
as forward averaging which is absolutely useless to people entering the
workforce. Presto! Millions in very active capital removed from the marketplace.
The amount lost to a new university graduate is substantial. Let's do a rough
sample calculation. Ms. Jones is an engineering graduate of 1984. In 1982 she
is a painter for the summer. Net income: $5000. In 1983 Ms. Jones was fortunate
that even in the poor economic conditions of that time she was able to secure
a summer engineering job with an oil company. Net income $8000. Upon
graduating she started work in July at $26,000 per annum. Assume that by her
second year this has increased to $30,000. Let's look at how much the removal
of general income averaging has cost her. We will assume deductions of $5500
from her annual income for tax purposes as well as a tax rate of 25%.-10% prorat
ing. With income averaging her adjusted income for 1984 will be roughly $9300 -
taxes work out to roughly $950. For 1985 it works out to an adjusted income of
$18000 - taxes are roughly $3100. Thanks to Mr. MacEachen's insight Ms. Jones
will instead pay roughly $1900 in 1984 and $6100 in 1985. That is roughly
$4000 extra or twice as much! Where ever you are Ms. Jones this is an example
of how well this country has been run in the past.
The idea of a minimum tax for high income earners is a valid one as Mr.
Mulroney has agreed.
How I love to ramble..................ralph@utcsrgv.UUCP (ralph hill) (08/08/84)
Enough already. If you don't know what you are talking about, keep your trap shut. The 3 year income averaging was not intended to help people who suddenly had their income shoot up. It was supposed to help people who had incomes that varied. Hence the change to forward averaging that explicitly prevents the former while achieving the latter. It was not an act of incompetence. It was an act of government policy. If you don't like the policy, complain about the policy, not about incompetence. There is a difference.
henry@utzoo.UUCP (Henry Spencer) (08/08/84)
Ralph is right. Remember that the purpose of taxation is to raise money.
The government's guiding principle is NOT giving people a fair break, but
getting every possible penny out of them without causing a revolution.
An appearance of fairness is useful, since it reduces the chance that any
specific group will feel exploited enough to revolt, but that's all.
The argument that old-style averaging benefitted the economy by putting
more money in the hands of people just joining the work force seems weak
to me. One could equally contend that these are likely to be the folks
who are on relatively low salaries with minimal job security and hence
would be reluctant to make major investments right away. (Note that I'm
not claiming this point of view is necessarily correct, just pointing out
that the question is more complex than it looks and intuition is not
necessarily sufficient to yield the right answer.)
Yes, I am one of the people who got hurt by the change in averaging.
--
"Taxation is theft."
Henry Spencer @ U of Toronto Zoology
{allegra,ihnp4,linus,decvax}!utzoo!henrymnh@utcsrgv.UUCP (Mark N. Hume) (08/08/84)
I might also point out that forward averaging is very useful when people retire, since in most cases retirement income is substantially lower than pre-retirement income.
dave@utcsrgv.UUCP (Dave Sherman) (08/08/84)
In article <5016@utcsrgv.UUCP> mnh@utcsrgv.UUCP (Mark N. Hume) writes:
~| I might also point out that forward averaging is very useful when people
~| retire, since in most cases retirement income is substantially lower than
~| pre-retirement income.
No, it's not, unless the person who retires had a big jump
in income in his last year of work. Forward averaging can
only be used to the extent your income exceeds 110% of your
income over the previous three years, *after* adjusting for
inflation. It can only be used for other income by people in
certain categories, such as athletes and entertainers (who are
expected to have uneven income streams over their careers).
Dave Sherman
Toronto
--
{allegra,cornell,decvax,ihnp4,linus,utzoo}!utcsrgv!dave