Tax rates - what a mess

[Bobblehead]

One of the Liberals last pieces of legislation was to lower the bottom Federal tax rate from 16% to 15% for 2005.

An interesting thing about this; the forms CRA has printed for 2005 tax returns have the 16% rate listed. The forms you can print off of the CRA website list 15%.

However, if the Conservatives win, they have said they will reverse the tax cut. There is an article in today's National Post about this.

But the Conservatives called the CBC in early January to say that while they would allow the Liberal tax cut to stand for last year, they intend to immediately raise personal income taxes if they are elected.

Doesn't this appear counter intuitive?

[Ace]

Originally Posted by Bobblehead

One of the Liberals last pieces of legislation was to lower the bottom Federal tax rate from 16% to 15% for 2005.

An interesting thing about this; the forms CRA has printed for 2005 tax returns have the 16% rate listed. The forms you can print off of the CRA website list 15%.

However, if the Conservatives win, they have said they will reverse the tax cut. There is an article in today's National Post about this.



Doesn't this appear counter intuitive?

The Conservatives would reverse by 2007, it would not be in effect for 2005.

[Bobblehead]

Originally Posted by Ace

The Conservatives would reverse by 2007, it would not be in effect for 2005.

From the article linked:

But Kenney says that while nothing can be done for the 2005 tax year, the 16% bracket would be restored for 2006

[Ace]

OK I guess i don't get your question then. If you doing your taxes (for the year 2005) it will be at 15%. Next year when you do your 2006 taxes the rate will be different based on a new conservative tax strategy not fully announced (if they gain power).

[Bobblehead]

Well, I work in income tax, so the whole "what is really going to happen for 2005" is a headache.

But as to my question, the Conservatives wish to lower taxes, and yet it seems weird to me that they would raise a tax rate soon after they get into power. I understand they wish to lower the GST instead, but there seems to be sleight of hand going on that creates an uneasy feeling (a feeling I'm getting form ALL parties right now). This appears to me to have been a "spend spend spend" campaign and I'm looking for where the other shoe will drop.

[Bring_Back_Shantz]

Yeah, bobblehead, I think you've got your dates mixed up.
THe 15% will be in effect for the 2005 tax year (meaing the taxes you'll submit in 2006). But for 2006 they'll be back at 16% (should the conservitives win) so it'll be that way for the taxes you submit in 2007.

[Bobblehead]

Originally Posted by Bring_Back_Shantz

Yeah, bobblehead, I think you've got your dates mixed up.
THe 15% will be in effect for the 2005 tax year (meaing the taxes you'll submit in 2006). But for 2006 they'll be back at 16% (should the conservitives win) so it'll be that way for the taxes you submit in 2007.

• The Liberals made the change in rate announcement late 2005.
• Then they were defeated.
• The tax rate drop has NOT passed. Legally, the rate is still 16%.
• But CRA released their forms on their website with the 15% rate listed.
• CRA has now said that they had to make a decision by the end of the year and will assess 2005 returns at 15%.
• Most people will get a refund, since all source deductions were calculated on a 16% rate.

Any party who is elected and refuses to initially proceed with the rate drop will force the public to give back their refunds, so, according to the article, the Conservatives have conceded 15% for the 2005 tax year is a done deal.
It is almost as if the CRA has made policy.

However, if the Conservatives win, they are announcing they will raise the rate back to 16% (whether that is for all 2006 or half way through the year, only the Conservatives know)

[Bring_Back_Shantz]

Okay, so where's the confusion?
The Conservatives have said they'll let it stand but will raise it back for next year. Where is the confusion?

[Bobblehead]

Originally Posted by Bring_Back_Shantz

Okay, so where's the confusion?
The Conservatives have said they'll let it stand but will raise it back for next year. Where is the confusion?

I just don't associate Conservatives with raising a tax rate.

[Ace]

Originally Posted by Bobblehead

I just don't associate Conservatives with raising a tax rate.

They arn't raising the tax rate, they are just using their tax proposal and not the liberal one. A tax probosal that includes billions of reduction to GST. They have also said that more is to come, which means the specific 15% tax rate the Liberals implemented is not the same ones the Conservatives wish to bring forward.

You can't expect them to put forth both the Liberal and conservative tax plan. Especially a Liberal plan pushed through to try and keep them in power.

[Bobblehead]

Originally Posted by Ace

They arn't raising the tax rate, they are just using their tax proposal and not the liberal one. A tax probosal that includes billions of reduction to GST. They have also said that more is to come, which means the specific 15% tax rate the Liberals implemented is not the same ones the Conservatives wish to bring forward.

You can't expect them to put forth both the Liberal and conservative tax plan. Especially a Liberal plan pushed through to try and keep them in power.

The lowest bracket tax rate for 2005 (and beyond) is now 15%. When the Conservatives get into power, they are saying

the 16% bracket would be restored for 2006.

That is an increase in the tax rate.

Their election platform states that they are going to lower the GST and lower personal taxes. Why return the tax rate to 16%, why not just leave it at 15%?

Unless you don't pay any taxes, everyone pays the the first $35595 earned. Leaving the rate at 15% benefits everyone.

2005 Schedule 1

[Ace]

Originally Posted by Bobblehead

The lowest bracket tax rate for 2005 (and beyond) is now 15%. When the Conservatives get into power, they are saying That is an increase in the tax rate.

Their election platform states that they are going to lower the GST and lower personal taxes. Why return the tax rate to 16%, why not just leave it at 15%?

Unless you don't pay any taxes, everyone pays the the first $35595 earned. Leaving the rate at 15% benefits everyone.

2005 Schedule 1

Do does reducing the GST, what they are saying is they are not doing both.

[Bobblehead]

Originally Posted by Ace

Do does reducing the GST, what they are saying is they are not doing both.

I wondered about that, but I went to their website and it says:

Our tax plan will include cuts to the GST, and large cuts to personal income taxes and business taxes.

Conservative website link


I just feel like I'm picking between a bunch of devils. There's lots on BOTH sides I don't like (I don't consider NDP viable, and if it wasn't for that whole 'separatist' thing Duceppe seems the most reasonable), and very little I do like. Not that my vote matters, my riding is a lock anyways even though my MP doesn't appear to do bupkus.

It just seems to me that the more politicians are paid (in an attempt to attract the "best qualified") the more polititians all seem to be toadies pandering to what they think the public wants to hear and attacking each other?