Comments on: Tax Cuts and Other Topics

By: Phil S

Phil S — Sun, 26 Nov 2006 00:38:05 +0000

I don’t know exactly what the little m represents, but I have seen it before, usually in reference to a fund which has a very small total net asset value. When you look into the prospectus, you can see that a 3.5%m equates to about 13.5% MER. This notation is also common for Labour Sponsored Investment Funds. From what I have seen, my educated guess is that is added because the computer won’t allow the Globe & Mail to enter an MER that is larger than one digit to the left of the decimal. So, they stick in an “m” to indicate that there is a 1 in front of the 3.5% to make 13.5%.

The income splitting scheme means absolutely nothing to me. I am single. One thing that I have done which is income splitting-like is that I have incorporated my investment portfolio. So, my investment portfolio only pays income tax at the corporate rate (roughly 20%) instead of at the personal rate that I am taxed (roughly 40%).

I think they did this to somehow make up for the billions that they have destroyed from the income trust debacle. They chopped off your arm and gave you some bandaids.

By: Canadian Capitalist

Canadian Capitalist — Fri, 24 Nov 2006 17:52:57 +0000

Abe: I am not sure I’ve ever seen a m after the MER. So, not sure what it means. Could it be a printing error?

By: abe

abe — Fri, 24 Nov 2006 16:31:52 +0000

Any Idea what the small m in the MER value means? for example [MER= %2.0m].
Thanks.

By: hepman

hepman — Wed, 22 Nov 2006 23:44:26 +0000

Al, how about spliting income only if both spouses are working and put a lower income limit, say the personal exemption, as a requirement.

By: Al R

Al R — Wed, 22 Nov 2006 22:30:31 +0000

Income splitting is a bad idea. Canada has an extremely tight labour market right now, and it would be foolish to provide incentives for people to take themselves out of the labour market. Ask all the businesses in Alberta that had to close because they can’t find anyone to hire. It’s an especially bad idea with the legions of baby boomers who are about to retire.

It means less tax revenue for government, both because incomes can be evened out, and because there should be fewer people working. The implication, of course, is that the burden increases for everyone else. It also dampens the incentive for people to seek out training, etc.

For the estimated $6B+ it’s going to cost, the government could lower personal or corporate income taxes and generate wealth for everyone – imagine that. It’s not the 1950s anymore.

By: James

James — Wed, 22 Nov 2006 20:59:23 +0000

I’m a big fan of income splitting, we need to encourage family members(either mom or dad) to stay at home and raise the kid(s). This is just an extention of the conservative $100 a month payment to parents.

As for RRSP matching, I think its great also. I already have a plan at work that matches my contributions dollar for dollar so I won’t benefit I just think everyone should see a similar benefit. What the libs are proposing is if you deposit 12% of your gross your employer matches with 6% bringing you to the 18% limit of RRSP’s. This is a very forward thinking idea I think. Paying off in a generation when everyone has a fully funded RRSP, and no one has to scrimp in retirement.

By: Big Cajun Man

Big Cajun Man — Wed, 22 Nov 2006 17:52:19 +0000

Income splitting is a good thing. Single income families have been the brunt of a bad joke in the taxation system for FAR too long. Woe be tide any political party that argues against this, because the “traditional” family with 1 income, and those non-traditional ones (common law, same sex, etc.,) will also fight for this too!

Bring it on Jim!!! -C8j

By: Canadian Capitalist

Canadian Capitalist — Wed, 22 Nov 2006 15:24:32 +0000

I am as much as a Libertarian as most of you, so the reason I liked the idea had to do with personal experience. I’ve worked in many companies with no RRSP match and my guess is participation in a RRSP was very low. My current employer provides a modest match and according to HR, almost everyone takes advantage of it.

The match could be set at a modest level of 1%-3% and it doesn’t have to be something expensive. Most self-directed RRSPs already offer monthly contributions which could be used for matching programs.

Of course, like many of you rightly point out, in anything the government involves itself, the cure is likely to be worse than the disease.

By: Canadian Dream

Canadian Dream — Wed, 22 Nov 2006 13:51:33 +0000

I personally like the idea of the income splitting for couples. The wife and I have always had a huge gap between our incomes, so getting rid of a grand or two in tax per year would be a nice present for the holidays.

By: Steve Heath

Steve Heath — Wed, 22 Nov 2006 13:34:51 +0000

I’m with the chorus… bad idea. Let’s just stick with income tax cuts for a while, that’s not what lost Paul Martin the election…