Simplify the tax system and give us back the lost decade and a half

My beef this Sunday morning is taxes.

I haven't had much time to think about the "revised" federal budget, and there's not much point in tearing it apart, any honest analysis would be as long as the budget paper itself (300 pages plus).     I do give credit for one thing:   I like the fact that the feds will be topping up the Guaranteed Income Supplement by $50 per month for single seniors and $70 for couples.   This does go a long way to closing the gap created when the pension credit for those lucky enough to have a slush fund was tripled from $1000 to $3000.   But not near enough.   The numbers should be at least double that, with a goal over four years to bring the guaranteed amount (including provincial or territorial supplements) to the poverty line, or as we say in Newspeak, the "Low Income Cut-off."

I still believe and will continue to fight for, on this page and wherever I can by legal means, the end of poverty for seniors and the most vulnerable families.

My main concern, though, is that in trying to get votes, the government has said over the last few years they're handing out $500 here, $1000 there, another $10,000 out yonder (which really means $75, $150 and $1500 respectively).   It would be far more efficient, rather than creating new credits and making the tax system even more complicated, to just have broad based income tax cuts -- say, 1 or 2 percentage points across the board.   Put more money into people's pay cheques rather than make them wait until the end of the year to collect on money for which the government has collected interest on our backs.

What credits are created are not indexed to inflation, so over time, they lose their value.    And, like the United States, this latter one is impacting a lot of people who unwittingly are getting trapped by the Alternate Minimum Tax which is a flat 15% over $40,000 if that amount is more than what the tax owing would be with write-offs (and of course that doesn't include the provincial take).   That $40,000 threshold has been there since Mike Wilson introduced the AMT -- in 1985.   In reality the exemption should be just over $71,000.

It's more than obvious too that we need to do something about the lost decade and a half when tax brackets were frozen (except for one year in 1992 to account for the temporary spike in prices when the GST was introduced).   So that personal exemption of $10,527 should really be something like $15,741 -- and so on down page three of the return.

It's the old KISS formula:   Keep it short and simple.   I don't mean a flat tax or the "post card" tax return canard.   I do mean a fairer tax system that ensures that even those who don't earn enough to tax advantage of write-offs still have enough disposable income to spend and ensure consumption taxes are still raised.

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