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UCP Tax Cut Hits the Target but Misses the Mark

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7 minute read

Opinion by Cory G. Litzenberger

Well for fear of being lynched, let me talk about how I think the UCP’s Job Creation Tax Cut may be (partially) incorrect.

While I applaud politicians for laying out their plans in advance of an election, my fear is that the plan is too slow in implementation and cuts too far.

I think a tax cut needs to be moderate and quick – not slow and deep.

Here are my thoughts for various tax changes we need to do in Alberta:

General Corporate Income Tax Rate:

Instead of cutting by 1% per year over 4 years, bring it back by 2% to 10% from 12% in the first year and keep it there.

By delaying the cut as the UCP currently proposes, it could reduce the impact it will have on the economy as the change to the bottom line will not be impacted enough for a corporation to make larger investment until year two or three of the plan.

Quicker action by government will result in quicker action by business, resulting in quicker action in the economy and job creation.

10% also still makes us the lowest jurisdiction in Canada.

Personal Income Tax change to 3 brackets:

– 8% for first $50k
– 10% for the next $100k
– 12% for over $150k

This reduction from 10% on the first $50,000 saves roughly $600 in personal income tax (after factoring in the basic personal tax credit) for every individual making more than $50,000 a year.

It also saves 2% for those making under $50,000 currently.

This is an important cut in order to reward people that call Alberta home, as you will see below.

A rich person paying 12% in Alberta on their personal income is better than them paying 0% because they live somewhere else.

Harmonized Sales Tax (HST) 5%

Yes, I think we need to remove the inflationary and regressive carbon tax as it is way too high of a burden and causes a ripple effect in inflationary pricing how it was implemented.

However, I suggest we implement a 5% HST (which is a flow-through for businesses and does not have the same impact on pricing).

Now, hear me out before you break out the yellow vest!

Currently, anyone visiting our province as either a tourist or a temporary worker from another province are using our infrastructure like roads, water, and yes, even hospital emergency rooms.

When these non-Alberta residents file their personal tax returns, they file it based on their home province of residence as of December 31. Since most of them don’t have a permanent residence in Alberta, this results is them paying income taxes to other provinces, while using our infrastructure for free.

Other provincial residents not paying any taxes in Alberta while here unfairly puts the cost on all of us that live here.

If we implemented an HST similar to the GST program, low income households would still receive credit back (just like GST credit) to offset most (if not all) of any HST they pay.

The $600 in income tax savings we mentioned above for everyone else, is equivalent to $12,000 of taxable supplies consumed ($24,000 in a double income household where they each make over $50,000 of income).

Don’t forget that basic grocery and shelter do not have sales taxes, and if Andrew Scheer gets elected, neither will basic home heating.(https://twitter.com/andrewscheer/status/854364648388182016)

This income tax reduction of $600 to $1,200 would offset much of the sales tax you would pay, but would now start to charge non-Alberta resident visitors and workers.

The reason for an HST instead of a PST is that currently, an HST is required to be charged by all GST registrants across Canada. If you are a GST registrant, you are automatically an HST registrant.

For example, in my office in Red Deer, I have to charge my Ontario customers HST and send it in to the government even though my business is in Alberta.

An HST could reduce the potential for tax leakage out of our province by funneling it back to Alberta because of other retailers in other provinces requiring to charge it on things purchased outside of, or shipped to, Alberta.

Results

– a competitive corporate tax rate to attract investment and do it quicker than the original UCP plan;
– low personal income tax to attract wealthy individuals (and their tax residency) back to Alberta to make it their place of residence, again, quickly;
– removal of the inflationary carbon tax;
– insertion of a relatively low cost HST so that we can get back some of that transfer payment money from the residents of other provinces.

In Summary

– Reduce Corporate moderately and quickly.
– Reduce Individual moderately and quickly.
– Remove Carbon tax.
– Implement an HST.

I know that the slight mention of a sales tax in Alberta makes the hair on the back of your neck stand straight up, and for many conservative politicians, they would resign before suggesting it. However, even as a fiscal-conservative tax accountant like myself, I believe that if it is implemented properly with tax reductions elsewhere, it can add to the bottom line for the province.

I also think it can do so without being a burden to those that live here by taxing those that don’t.
———
Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr is the President & Founder of CGL Strategic Business & Tax Advisors; you can find out more about Cory’s biography at http://www.CGLtax.ca/Litzenberger-Cory.html

CEO | Director CGL Tax Professional Corporation With the Income Tax Act always by his side on his smart-phone, Cory has taken tax-nerd to a whole other level. His background in strategic planning, tax-efficient corporate reorganizations, business management, and financial planning bring a well-rounded approach to assist private corporations and their owners increase their wealth through the strategies that work best for them. An entrepreneur himself, Cory started CGL with the idea that he wanted to help clients adapt to the ever-changing tax and economic environment and increase their wealth through optimizing the use of tax legislation coupled with strategic business planning and financial analysis. His relaxed blue-collar approach in a traditionally white-collar industry can raise a few eyebrows, but in his own words: “People don’t pay me for my looks. My modeling career ended at birth.” More info: https://CGLtax.ca/Litzenberger-Cory.html

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conflict

Col. Douglas Macgregor: US is ‘facing disaster’ as it funds overseas wars while bankrupt

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From LifeSiteNews

By Frank Wright

“We have a government that consists of 525 lobbyists – and that’s why we have the policies we have.”

Following the news that the U.S. Congress has finally approved $95 billion in “aid” to Ukraine, Israel, and Taiwan, retired Colonel Douglas Macgregor has returned to ask the difficult question – why is the U.S. funding wars when it is bankrupt?

In an April 21 video interview with U.K. member of Parliament George Galloway, Macgregor gave a blunt and shocking answer.

“We have a government that consists of 525 lobbyists – and that’s why we have the policies we have.”

His full remarks open the video with a searing assessment of the level of corruption in the United States government:

I would currently say that we have a government that consists of 525 lobbyists as opposed to representatives – people who are all busy lobbying for money with which they can line their pockets. Now some of them are just ignorant … some are destructive … but all of them, I’m afraid, with very few exceptions, are bought men.

The U.S. is facing disaster, says Macgregor. With the national debt at over $34 trillion, and the total U.S. debt including households and corporations at almost $100 trillion, the economic situation is just one dimension of the disaster of debt and corruption he says has financed the capture of the political system.

His startling description of a blackmailed captive political class would account for why such an indebted nation is so keen to hand over so much money to fund foreign wars. After six months of wrangling, the House voted to approve $95 billion in lethal and non-lethal aid. $60 billion goes to Ukraine, $26 billion to Israel, and the rest is allotted to future flashpoint Taiwan.

With Macgregor and others saying there is no public support for these measures, how is this level of spending possible?

Washington, D.C. ‘a large Epstein Island’

Epstein Island, as you know, is the place where people were set up with underage girls, and it looks like enough of them have been involved in it that they’re all they’re all blackmailed.

Macgregor notes he is not the only one to reach this conclusion:

That was Tucker Carlson’s most recent allegation – that people on the Hill who lead sadly bizarre lives are blackmailed.

Macgregor is referring to this April 3 interview between Tucker Carlson and Rep. Marjorie Taylor Greene, in which Carlson asks why Speaker Mike Johnson seems “completely disconnected from what we want.” The video below shows a brief excerpt from the interview.

Carlson observed the striking difference between Mike Johnson’s principles and his actions:

Mike Johnson has made a complete departure of who he is and what he stands for – and to the point where people are literally asking, ‘Is he blackmailed?’

Carlson also noted that “70 percent of Americans … and the majority of Republicans do not support funding Ukraine.”

Macgregor’s Epstein Island thesis may explain the mystifying personality change in Mike Johnson. Macgregor went on to conclude:

If that’s the case [the elected representatives] could be compelled to vote in whatever direction the very wealthy and powerful oligarchs in the United States [desire].

We are used to hearing “mogul,” “scion,” or even “philanthropist” to describe the billionaires in the West with state-level influence. This is the reason for Macgregor’s use of the term “oligarch” – usually reserved for the same class of people in enemy nations.

I say oligarch because someone who’s a billionaire hedge fund manager can just as easily buy policy outcomes as an oligarch in Russia or Ukraine.

Macgregor sees this sponsorship of politics as the root of the crisis in America.

I think that’s our biggest problem.  The only way that it will end is with some form of financial collapse – which many of us think is going to happen.

Macgregor points out that the vaunted GDP – the Gross Domestic Product by which the size and health of the economy is measured – “is an illusion.”

“We are currently living on income that is close to 50% of government income,” he said, pointing out that the U.S. is living not only on borrowed money, but also on borrowed time.

“This can’t go on forever. We just don’t know when it’s going to happen but something is going to come along and tip us over,” he warned. “When that happens there will be an opportunity to clean house and hopefully start over – and put an end to this unnecessary overseas empire.”

The domestic crisis is largely ignored, said Macgregor, by a political elite which “acts as if it is still 1991.”

This crisis, which includes that on the U.S. border, and a breakdown in law and order so severe that Elon Musk called for crime to be made illegal again, is one which sees no explanation at all as to why actions are taken to make everything worse.

As Carlson pointed out, no one in power ever really explains why they are taking these decisions, as their policies fuel an expanding global and domestic catastrophe.

Since Joe Biden became president, the U.S. government has spent hundreds of billions of dollars fighting an undeclared war against Russia.

No one in all of that time has explained really the purpose of this war, why it would benefit the United States or the world.

Yet the war in Ukraine is not the only one being funded. The genocide in Gaza simply could not continue without a constant supply of U.S. arms – and money. Carlson added that “ethnic and religious” reasons play a part, but that even these fall short of a convincing reason.

Clearly, at least some policy makers are motivated by ethnic and religious hatred. That’s probably part of the real reason. But officially, no one has told us why we are doing this.

Ukraine war – and NATO – lost?

Regardless of the dark motives for the wars, Macgregor considers the one in Ukraine lost, and the money will make no difference to Russia’s post-war plans. He thinks this defeat will break the NATO alliance, with the Europeans breaking away to forge a different future.

I think even the Europeans, who were even more misguided and utterly confused than much of the American population, are going to realize that there’s no future in this relationship between us and them.

He says the European allies will see “that they too have to save themselves – that they’ll have to chart a new destiny for themselves. So I think that’ll be the end of NATO.”

With a dissolving military alliance abroad, Macgregor turned to the question of Israel. Why has the Biden administration changed its initial tune of “unconditional support” for Benjamin Netanyahu?

Until recently it was unconditional support for Israel. I think the reality has begun to set in with some of the senior people behind the scenes that are instructing Biden and controlling the Congress, that there’s a very real potential for a major war that would draw in Russia and China – and other countries – and could frankly destroy Israel and fatally harm us.

So now I think there’s a sense of helplessness, and that helplessness leads to pleas for cooperation with Mr. Netanyahu.

Macgregor warns that though it is “a good thing” that Netanyahu “did not get his war with Iran,” he counsels that this “doesn’t end the probability of a future war with Iran,” as Netanyahu “continues to enjoy unconditional support [from the U.S. government] for this program of mass expulsion and murder in Gaza.”

‘You’ve got to save yourselves’

With politics controlled by a “donor class” that effectively dictates spending, Macgregor warns against the desperate belief in some national savior.

“I’m one of these people that really dislikes the notion that any one candidate is going to rescue us,” he said, addressing the idea that some “Napoleon” may emerge to save America.

I keep telling people: stop talking about Donald Trump or RFK Jr. or anybody else saving us.

You’ve got to save yourselves.

He thinks this message is getting through – “but we’ve got a long way to go”. Most Americans are “too busy trying to put food on the table,” he adds, with others sadly taking in “the usual nonsense from the mainstream media.”

He thinks perhaps a third of Americans have awoken to the gravity of the situation:

Right now perhaps a third fully understand what’s happening in the country and the dangers abroad- but that’s about it.

Macgregor, a retired US Army colonel, makes an impressive summary of nuclear capabilities in the Middle East, mentioning the widely held assessment of Iran as a “threshold” nation. His appraisal is that the dangers of war are misunderstood, or even ignored, by a political management that is out of its depth and disconnected from contemporary reality.

Speaking of President Biden, he said “we’re dealing with someone now who is eminently incapable of coping with the reality of what you and I have been discussing,” before going on to note that those behind the president are less incapacitated, but deluded.

However, there are others behind Biden who are not total fools. They … are simply amateurs.

He says their assessment is of a reality that no longer exists – and whose God-given rights and way of life their policies are destroying.

They’ve been playing at everything as though America is still what it was in 1991: they are ignoring the open borders which they have deliberately created to dilute our population and essentially erase the American culture and national identity.

Macgregor says they are responsible for the chaos inside what were America’s borders.

They are the ones who are releasing criminals onto the street by destroying the justice system. They’ve ruined the armed forces in terms of morale and capability – it’s at an all-time low.

This toxic combination makes for a bleak prognosis from the retired colonel.

So you add that to the equation and the only thing I can see ahead for the United States right now is total disaster.

Yet Macgregor does not simply pronounce doom. He is trying to mobilize Americans in defense of their nation under God.

Macgregor is the CEO of Our Country, Our Choice – an organization which stresses the centrality of God, family, and country to the American success story whose passing he laments in detail.

Its founder, RJ, describes himself as a “devoted Christian” appalled at the theft of liberties under lockdown and shocked into action by the chaos flowing from the Biden administration.

“We’re driven by an unwavering commitment to protect what matters most: our faith, our loved ones, and the land we call home,” says the founding father-of-four, describing why he created OCOC in 2021 himself. “As I witnessed America’s trajectory under the Biden administration, it became increasingly chaotic and disheartening.”

He tells how he was moved to do so:

I reached a breaking point, realizing that the responsibility of reclaiming our country and defeating the deep state ultimately rests with us, the American people. No one else will step up. So, I made a bold decision, risking everything I had, and founded Our Country Our Choice.

His message to the American people is that they can take back their country and their politics from a class determined to destroy them.

It is one which Macgregor is determined to spread. There is hope amidst this desolation, says Macgregor, who believes that it lies with the American people themselves, and the defense of their God-given rights.

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Business

Honda deal latest episode of corporate welfare in Ontario

Published on

From the Fraser Institute

By Jake Fuss and Tegan Hill

If Honda, Volkswagen and Stellantis are unwilling to build their EV battery plants in Ontario without corporate welfare, that sends a strong signal that those projects make little economic sense.

On Thursday, the Trudeau and Ford governments announced they will dole out an estimated $5 billion in corporate welfare to Honda so the auto giant can build an electric vehicle (EV) battery plant and manufacture EVs in Ontario. This is the third such deal in Ontario, following similar corporate welfare handouts to Volkswagen ($13.2 billion) and Stellantis ($15.0 billion). Like the previous two deals, the Honda deal comes at a significant cost to taxpayers and will almost certainly fail to create widespread economic benefits for Ontarians.

The Trudeau and Ford governments finalized the Honda deal after more than a year of negotiations, with both governments promising direct incentives and tax credits. Of course, this isn’t free money. Taxpayers in Ontario and the rest of Canada will pay for this corporate welfare through their taxes.

Unfortunately, corporate welfare is nothing new. Governments in Canada have a long history of picking their favoured firms or industries and using a wide range of subsidies and other incentives to benefit those firms or industries selected for preferential treatment.

According to a recent study, the federal government spent $84.6 billion (adjusted for inflation) on business subsidies from 2007 to 2019 (the last pre-COVID year). Over the same period, provincial and local governments spent another $302.9 billion on business subsidies for their favoured firms and industries. (Notably, the study excludes other forms of government support such as loan guarantees, direct investments and regulatory privileges, so the total cost of corporate welfare during this period is actually much higher.)

Of course, when announcing the Honda deal, the Trudeau and Ford governments attempted to sell this latest example of corporate welfare as a way to create jobs. In reality, however, there’s little to no empirical evidence that corporate welfare creates jobs (on net) or produces widespread economic benefits.

Instead, these governments are simply picking winners and losers, shifting jobs and investment away from other firms and industries and circumventing the preferences of consumers and investors. If Honda, Volkswagen and Stellantis are unwilling to build their EV battery plants in Ontario without corporate welfare, that sends a strong signal that those projects make little economic sense.

Unfortunately, the Trudeau and Ford governments believe they know better than investors and entrepreneurs, so they’re using taxpayer money to allocate scarce resources—including labour—to their favoured projects and industries. Again, corporate welfare actually hinders economic growth, which Ontario and Canada desperately need, and often fails to produce jobs that would not otherwise have been created, while also requiring financial support from taxpayers.

It’s only a matter of time before other automakers ask for similar handouts from Ontario and the federal government. Indeed, after Volkswagen secured billions in federal subsidies, Stellantis stopped construction of an EV battery plant in Windsor until it received similar subsidies from the Trudeau government. Call it copycat corporate welfare.

Government handouts to corporations do not pave the path to economic success in Canada. To help foster widespread prosperity, governments should help create an environment where all businesses can succeed, rather than picking winners and losers on the backs of taxpayers.

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