Tax season is essentially over, so now I have time to follow what is going on with Adscam. I watched Martin's limp broadcast on Thursday, and then read these insights by Russ Kuykendall on Burkean Canuck on his interview on Canada AM the following morning. For those of you South of the border, Canada AM is just like any other network morning show - just as nauseatingly perky and devoid of substance as the any other. The Liberals are pulling every trick in the book in order to stave off an election. Mike Brock has done the numbers and figures that Martin will play prison bride to the NDP for the rest of the year. It is a plausible scenario, but if more allegations from the Gomery inquiry come out that illustrate members of the current inner circle were well aware of adscam, despite the protestations of Martin, I think the NDP will re-assess it's commitment to keeping the Liberals afloat, especially if it means the potential of picking up seats at the Liberals expense in places like Ontario.
There are two things Harper and the Conservatives should do during all this. First, be efficiently ruthless in keeping the flame to the Liberal's feet, knowing that they will not receive any quarter from the government or their media accomplices. Second, make a policy announcement that a Conservative government will make sure that things like this never happen again - by getting the government out of these slush fund programs like the gun registry, hrdc, sponsorship and the like.
The cool thing is, it will not be a slow news cycle in Canada for the next few months, so say the least.
Tuesday, April 12, 2005
I found these charts showing the differences in tax freedom day within both the U.S and Canada. The Tax Foundation has their charts showing the tax freedom day by state. As you know, tax freedom day is the day of the year when one stops working for the government and starts working for oneself. To put it another way, it shows the overall tax burden of a jurisdiction (including property, sales, excise taxes and what not) as a portion of one's working year. The Fraser Institute has one for Canada by province and by time. My current place of residence, Michigan, has a tax freedom day of April 15th (what a coincidence, the date personal income tax returns are due). My former place of residence, Ontario, has a tax freedom day of June 27th. Two things come to mind:
- I can't believe it is that big a differential. Over two months! In 1981, tax freedom day in Ontario was May 29th (per the Fraser Institute), while in Michigan in 1980 (per the Tax Foundation) it was April 22nd. No wonder Canadian real wages have stagnated. Their overall tax burden is up roughly 50% in terms of the incremental time/effort needed to pay "the man" his piece of the action. And that is in real terms, by measuring in terms of output (days of labour).
- Considering that most Canadians are paying half their total income to all levels of government, it is appalling how little value one gets for it (unless you own a Liberal friendly ad-firm in Montreal)
If you the biggest reason for the economic disparities between Canada and the U.S. Those two dates can explain a lot of it.
Sunday, April 10, 2005
April 15th is less than a week away, and that means my busy season is over. On the tax front, things I have learned:
- I think the Michigan income tax credit for property taxes should be non-taxable as income on the federal return in subsequent years. I have yet to find the definitive word on the taxability of state income tax credits, but I shall post the results once I find them.
- Tax cuts are meaningless unless the Alternative Minimum Tax (AMT) is either adjusted for inflation and the new tax structure or repealed. I have seen a lot of people who are of moderate income get dinged with AMT when in prior years they would not qualify. The concept of AMT was to ensure that high income earners paid their 'fair share'. But since the tax rate or brackets have not been changed or indexed in years, it is ensnaring a larger and larger amount of middle income families. The worse part is that those people who live in states that have had large state income or property tax increases are getting the worst of it. Thus on one level, the Bush tax cuts are a mirage because they give with Form 1040 (regular tax) and take away on Form 6251 (AMT). In Canada, they get you by changing all these deductions to credits that apply only at the lowest rate (and not the effective rate).
Those are my observations. I have been keeping up on my reading, and will be posting on Adscam once the 15th is over and the requisite festivities related to them. If anybody wants a primer on AMT, my esteemed colleague tax beaner will post for all of you.
Monday, April 04, 2005
Ed at Captain's Quarters has all the testimony from the Gomery inquiry, in spite of the publication ban. All I can say is wow! I am used to sleaziness in Quebec politics, but this is on a brazen scope and scale that I have trouble believing. If the Grits don't get turfed because of this, then shame on the Canadian electorate, for allowing Canada to become a corrupt one-party state like Mexico of old.