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Middle Class

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The Middle Class

The middle class.

This phrase is shrouded in mystery but typically refers to ones occupation, income, education and social status in relation to others.

Depending on the political party using the term, the underlying definition can change.

The Liberal Party has an entire section of it’s 2019 election platform dedicated to the middle class and people working hard to join it.

Unfortunately, the Minister of Middle-Class Prosperity has had difficulties defining the characteristics of the people she was elected to represent.

Excuse me if I’m a little concerned that the middle class might be forgotten as a result.

Tax Free

Making Life More Affordable

Any claims of government giving anything to citizens “tax free” should be met with scrutiny.

All government funding ultimately comes from taxpayers so to suggest that government can give you tax free funds is simply not accurate. Someone is being taxed in order to provide the benefits.

Effective for 2016 tax filings, the Liberal Government lowered the tax rate on income in the 2nd tax bracket by 1.5%. This bracket currently applies to income between $48,535 to $97,069. All other brackets have either remained the same or increased since that time.

For those earning up to the maximum of $97,069, this results in tax savings of $1,456.

In conjunction with the 1.5% tax drop, the Liberal Government removed the Family Tax Cut (FTC). This allowed families with children to notionally transfer income from the spouse with higher annual income to the other spouse.

Depending on your situation, this could result in a tax credit of up to $2,000.

Effective in 2019, the Liberal Government implemented an increase in the Canada Pension Plan annual rates. By 2023, this will result in additional annual employee contributions of $1,107 for those earning above the annual ceiling of $65,700.

The employer portion would increase in proportion, putting further pressure on small business cash flows.

While the Liberal Government may claim that they are “making life more affordable”, the numbers above paint a different picture.

Income Tax Act

What should the government do?

The Canadian Income Tax Act (ITA) has not seen a major review since the late 1960’s. It is now a patchwork of legislation that is difficult for even seasoned Chartered Professional Accountants to apply into practice.

Complexities within the ITA result in a significant added administrative burdens. Instead of focusing on growing your business, creating jobs or planning for retirement, significant time is lost navigating the ITA.

The government should immediately engage in a full scale review of the ITA. The review must consult the private sector and address all major industries across Canada. The revisions should be made in such a way as to allow for amendments in future as the economy continues to evolve.

Key areas that should be the focus of a review:

  1. Simplify: The tax system needs to be fair, efficient and competitive.

  2. Modernize: Tax policy needs to be able to keep up with the digital economy.

  3. Be Supportive: Changes to Canada Revenue Agency (CRA) policies that will ease compliance for taxpayers.

Keep it Simple

Simple:

In Alberta, there are now nine personal tax brackets, a patch work of credits and numerous complexities to navigate in complying with regulations relating to owner-operator business.

Serious consideration should be given to shift away from taxing income and toward taxing consumption instead. It is far more beneficial to tax activities that reduce the wealth of society, ie. consumption, rather than tax the creation of wealth.

The simplest way to make the shift to a consumption based tax system would be to increase the rate of federal GST. This would be offset with reductions in personal tax rates. The personal tax rate drops could be implemented in a manner that preserves the progressive tax regime, but with significantly fewer tax brackets.

For those in the lower tax brackets, the majority of their annual income is spent on non-GST’able expenditures such as groceries, rent and health care. Those with higher disposable incomes would contribute more to government revenues as a result. This preserves the progressive tax regime, protects the vulnerable and doesn’t penalize the creation of wealth.

More comprehensive reforms could also be analyzed to determine the best solution for Canadians.

Update

Modernize:

In recent months, there has been a growing call for government to implement a “wealth tax”. The New Democratic Party has suggested that a 1% on families with a net worth in excess of $20 million would generate net tax revenue of $5.6 billion in 2020-21.

As mentioned above, government should not introduce further tax on the creation of wealth. This tax policy will only further drive investment out of the country at a time that we can ill afford it.

Additionally, there have been calls to add an additional layer of tax on big tech companies, most notably Google, Amazon, Facebook and Apple. There is no doubt that these companies have seen record profits in 2020 but haphazardly implementing a 3% tax on the revenues of these companies will likely back fire.

The reason why large corporations are able to take advantage of low tax rates in foreign jurisdictions is due to varied rates across the globe. If one jurisdiction makes the decision to implement a tax increase, naturally, corporations will seek out lower tax jurisdictions.

If government is concerned with tech giants skirting federal taxes, they need to consult with all jurisdictions in which these companies operate. A unilateral tax will simply resulting in these corporations moving profits to lower tax jurisdictions.

Support

Be Supportive:

The Canada Revenue Agency is typically thought of with disdain by many Canadian taxpayers. Some of these feelings are self induced, others are not.

Much like the difficulties that individuals and businesses have in navigating the Income Tax Act (ITA), the same can be said for CRA agents. While the senior agents typically have specific training and field experience, the majority of front line CRA agents simply do not have the necessary training to effectively help taxpayers navigate the complexities of the ITA.

In order for the CRA to provide more supportive service to taxpayers, they too need to see a reform in the ITA. It simply is not fair to ask agents to be able to interpret the ITA and how it applies to each taxpayer they speak with.

Secondly, the CRA needs to revise audit training procedures for their agents that considers materiality of each case. Far too often I see audit cases that request significant amounts of supporting documentation in response to a taxpayers nominal expense claim. Some of these being less than $100.

This places a significant administrative burden on taxpayers, specifically small business owners. It also leads to a great deal of frustration, which further damages the relationship between this government agency and the general public.

 

Final Thoughts

Final Thoughts

Canada’s middle class has fallen on difficult times in recent years. This has only been exasperated by the impacts of COVID-19.

For far too long, Canada has lost investment and stymied growth due to its archaic tax regime.

The Liberal government has promised to “build back better” and create an economy that is just and equitable for all. Details of these plans remain to be seen.

Instead of grandiose plans stemming from pie-in-the-sky slogans, the government should immediately look to reform the tax system.

Focusing on simplicity, modernization and reducing administrative burden will give taxpayers the confidence to know that their hard work will translate into consistent after-tax earnings.

It’s time to unleash the power of the Canadian worker, supported by a competitive and modern tax regime. Future generations depend on it.

https://www.jaredpilon.com/

I have recently made the decision to seek nomination as a candidate in the federal electoral district of Red Deer - Mountain View. As a Chartered Professional Accountant (CPA), I directly see the negative impacts of government policy on business owners and most notably, their families. This has never been more evident than in 2020. Through a common sense focus and a passion for bringing people together on common ground, I will work to help bring prosperity to the riding of Red Deer – Mountain View and Canada. I am hoping to be able to share my election campaign with your viewers/readers. Feel free to touch base with me at the email listed below or at jaredpilon.com. Thanks.

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Vote Splitting

Bruce Dowbiggin

It Gets Late Early These Days: Time To Bounce Biden & Trudeau?

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“Take out the papers and the trash, or you don’t get no spending cash.”

Whether you’re in the stock market or real estate the question of when to sell is paramount. When to dump a tanking investment or sell a house in a bad market is an art form. Hence the expression, Timing is everything.

For the incumbent governments in Canada and the U.S. the time has come to make that risky decision of when to fish or when to cut bait with their respective leaders.

In Canada the federal Liberals, still shacked up with the NDP in a common-law embrace, have been doing denial for an extended period since they used the Covid-19 lockdown to sneak out a minority government in 2021. As soon as voters awoke to the lockdown hoax they’d lived through— courtesy of Justin Trudeau— they began to abandon him as a marketable product.

With five years to procrastinate, however, they indulged their radical agenda of climate and culture rather than address how they might be re-elected with Trudeau and his Quebec-dominated cabinet. They blew black holes in Canada’s debt load. There was a PR strategy to label Pierre Poilievre as a mini-Trump. And to buy up the floundering legacy media sources before there 2025 vote.

But for the most part the Liberals still saw Happy Ways where the mainstream saw an intellectual lightweight tilting at every Woke windmill. Since 2021 the polls have shown a steady erosion to the point where they see a Conservative majority— maybe even super-majority— if an election were called today.

Now all governments get tired over time. The biggest complaint about Stephen Harper from the talking classes in 2015 was the sense of fatigue he projected to Canadians who want their PM to be a rock star. But the collapse in Trudeau’s support has come via other very serious underpinnings from corruption (Lavalin, ME Charity, Chinese influence) to entitlement (the Carbon Tax, deficit).

However you see these issues they have led to the point where Liberals, more than half of whom will lose in the next election, must decide if they want to go to Davy Jones locker on the HMCS Skippy. Many of them will qualify for federal pensions if they hold on to the bitter end with Trudeau in October of next year. So he has that assurance of support. But if he is punted by the party he resurrected in 2010, who will succeed him? The taint of Trudeau on his most loyal sycophants will disqualify anyone in cabinet from being taken seriously for the top job.

Outside the immediate junta, names like Mark Carney— former Bank of Canada head— and deposed justice minister Jody Wilson Raybould have been put forward. The problem for anyone aspiring to replace Trudeau is they will have to face his fanatical loyalists in the PMO who’ve slapped down any pretenders so far.

The most recent forlorn hope for Trudeau was that the Federal Budget might calm the waters. Running up the deficit to perilous numbers with a menu of profligate policies to slake the restless NDP was going to force Poilievre on the defensive. So were limp attacks such as this from Trudeau cabinet pal Marc Miller.

For a brief fortnight the polling seemed to stabilize. But now more recent polls show that Trudeau’s popularity bottom was not a bottom at all, just a transfer station en route to the Marianas Trench of politics. Leaving the question of who and when as the only measurables in the equation. How much runway does he deserves and how much his successor gets are the operative problems when Liberals spend the summer in their ridings.

Meanwhile Joe Biden’s faint hope of putting his opponent in jail before the November election has done nothing to move his polling. If anything the prosecution of Donald Trump as he runs against Biden in 2024 is seen as a distinctly underhanded tactic by many outside the MSNBC mouth breathers.

While polls are a mugs’ game, the news that Biden trails Trump in all seven of the swing states he needs to be re-elected has sent shock through Team Obama, which runs the Democratic Party at the moment. There are a lot of sinecures and cushy salaries at risk here. The addition of Robert Kennedy Jr. to the presidential ballot in key states like California is further diluting the DEMs base. While RFK Jr. draws from both parties it’s expected he’ll hurt Biden most.

As if that wasn’t enough the recent pro-Palestine occupations by students and paid agitators is seen as a referendum on Biden’s support for Israel among the fanatical left-wing base of the DEMs. And polls indicate the effect has been disastrous.

Unlike the Liberals who have time to effect a palace coup, the DEMs are up against the clock with their convention coming in July. While he still plays to the Hollywood and Wall Street donors, the general public sees Biden getting more decrepit by the day. His persona as a pleasantly dazed crossing guard has worn thin.

While replacement scenarios have dogged Biden since his election (saved only by the utter dislike for his VP Kamala Harris) the party pros are talking about one last pierce of theatre: letting Biden take the nomination in July, replace Harris with a star candidate like Michelle Obama or Tom Hanks and have Biden then take a knee for health reasons.

Let the untainted replacement take on Trump, who produces a puke-in-your-mouth reaction with half the American electorate. A squishy Obama/ Bill Clinton replacement could rout Trump in a debate and bring single white women and blacks/ latinos back home to the DEMs. Seems like a longshot?

This is the party that orchestrated at least four separate legal assaults on Trump, coincidentally in the year of the election. Don’t under-estimate their chicanery. And while they  didn’t pay off the media as Trudeau has done, they don’t need to. They get the love for free.

Give them credit if they do, because doing nothing is a ticket to four years of The Don.

Bruce Dowbiggin @dowbboy is the editor of Not The Public Broadcaster  A two-time winner of the Gemini Award as Canada’s top television sports broadcaster, he’s a regular contributor to Sirius XM Canada Talks Ch. 167. Now for pre-order, new from the team of Evan & Bruce Dowbiggin . Deal With It: The Trades That Stunned The NHL & Changed Hockey. From Espo to Boston in 1967 to Gretz in L.A. in 1988 to Patrick Roy leaving Montreal in 1995, the stories behind the story. Launching in paperback and Kindle on #Amazon this week. Destined to be a hockey best seller. https://www.amazon.ca/Deal-Trades-Stunned-Changed-Hockey-ebook/dp/B0D236NB35/

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Automotive

Vehicle monitoring software could soon use ‘kill switch’ under the guise of ‘safety’

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From LifeSiteNews

By Caryn Lipson

Ambiguity surrounds the definitions of ‘impairment’ and the consequent privacy implications of such technology, raising fears of government overreach and erosion of rights.

In the name of safety, the government has taken steps that critics say have denied citizens what used to be considered inalienable constitutional rights.

Citizens are concerned that their right to freedom of speech under the First Amendment is being denied, ostensibly, to keep citizens safe from “harmful misinformation,” and fear that the Second Amendment right to bear arms is being infringed upon to combat gun violence. Watchdogs further contend that citizens are being denied the Fifth Amendment’s protection against self-incrimination and the Sixth Amendment’s right to face one’s accuser when technology is used to gather evidence.

READ: Vietnam’s new biometric ID cards raise fears of privacy violations, data breaches

The fear now is that increased use of technology will soon mean an even greater loss of privacy and further erosion of the Fifth and Sixth Amendments, due to certain provisions in Joe Biden’s infrastructure bill which will soon become mandatory. Under the guise of keeping citizens safe by preventing drunk driving, it may amount to ceding the freedom to travel to government control.

H.R.3684 – Infrastructure Investment and Jobs Act

The infrastructure bill, HR. 3684, passed by both chambers of Congress and signed by Biden on November 15, 2021, includes a provision for several vehicle monitoring technologies to be installed in cars, which have recently or will soon be required in new vehicles, including technology to determine if a driver is drunk or impaired.

The Center for Automotive Research’s Eric Paul Dennis reviewed the bill and summarized “key sections.” Dennis, a senior transportation systems analyst, reviewed the section on “Drunk and Impaired Driving Prevention Technology” (HR 3684 Section 24220) and explained that Congress gave the NHTSA (National Highway Traffic Safety Administration) the role of determining exactly what this section means and how it will be implemented:

This provision directs NHTSA to issue a rule to require ‘advanced drunk and impaired driving prevention technology’ in new light vehicles.

  • Congress tasked NHTSA with interpreting this law, including establishing the statutory meaning of ‘impaired.’
  • The legislation directs NHTSA to adopt a new safety mandate by 15 November 2024 and begin enforcing it by September 2027 (at the latest) if this is feasible. [Emphases added.]

Impaired driving not defined

Others, such as Michael Satterfield, writing as The Gentleman Racer®, were more detailed in their review of the legislation. Satterfield poured through the 1,039-page infrastructure bill. He agreed that good roads, bridges, and safety are important to automotive enthusiasts, but wrote that he uncovered some concerning legislation “buried deep within HR.3684.” The legislation calls not only for changes in crash testing and advanced pedestrian crash standards but also for a “kill switch” to be standard for all new vehicles by 2026.

Satterfield explained that all new vehicles will be required to have passive monitoring systems for the driver’s behavior and an algorithm will determine if the driver is too impaired to operate the vehicle. If the algorithm decides that the driver is too impaired to operate the car, the program will have some means of taking control of the vehicle. But what constitutes impairment and what the program will actually do was not explained by the legislation, as Satterfield noted:

What is not outlined in the bill is what constitutes impairment, outside of the blood alcohol standard, how does the software determine the difference between being tired and being impaired? Passive blood alcohol testing won’t detect impairment from prescription painkillers or other narcotics.

The bill also doesn’t outline what happens when a vehicle detects a driver may be impaired other than that the system must ‘prevent or limit motor vehicle operation if an impairment is detected’ which is all well and good in a bar’s parking lot. But what will this system do if an ‘impairment is detected’ while traveling at 75 mph on the highway? [Emphasis added.]

Accused by your own car’s surveillance system

He also expressed concern that most drivers will not be aware of the new technology until it affects them in some way:

Perhaps the most disturbing aspect of the legislation is the lack of detail. The main concerns expressed by many, including former U.S. Rep. Bob Barr, come down to privacy. Who will have access to the data? How long will it be stored? Will this capability be exploitable by third-party or government agencies to shut down vehicles outside of the function of preventing impaired driving?

Privacy concerns and the 5th Amendment’s right to not self-incriminate, and the 6th Amendment’s right to face one’s accuser, have already been used to challenge data collection from license plate readers and redlight cameras. Automakers have little choice but to comply with new federal mandates and the majority of consumers will likely be unaware of this new technology until it impacts them in some way. [Emphasis added.]

Freedom or control?

John Stossel recently interviewed former vintage race car driver Lauren Fix about what she believes are the implications of the soon-to-be-implemented impaired driving technology, as reported on FrontPage Magazine.

READ: High-tech cars are secretly spying on drivers, resulting in insurance rejections: NYT report

Fix pointed out that the algorithm cannot determine what exactly is happening in the car and with the driver and asks Stossel how much control over his life he is willing to give up:

Are you willing to give up every bit of control of your life? Once you give that up, you have no more freedom. This computer decides you can’t drive your vehicle. Great. Unless someone’s having a heart attack and trying to get to the hospital.

California, Fix pointed out, already requires vehicle software to limit excess speed to 10 miles over the limit, legislation about which Frontline News reported.

Fix also revealed to Stossel that some companies already collect and sell driver data and proceeded to outline further abuses that could occur as a result of computer surveillance technology, such as charging for mileage or monitoring your “carbon footprint” and deciding that you maxed out on your monthly carbon credits so you can’t drive anymore until the following month. Or perhaps the car won’t start because the software determines you may be on your way to purchase a firearm.

What about hackers?

Can hackers access a vehicle’s software and take control of someone’s car? This possibility is another worrying aspect of the infrastructure bill, which Frontline News will discuss in an upcoming report.

Reprinted with permission from America’s Frontline News.

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