Winnipeg Free Press

Winnipeg Free Press (Newspaper) - January 13, 1991, Winnipeg, Manitoba The Bill payment Way of today 9479300 Evelyn jacks forms try to simplify tax returns there Are Many political reasons Why the most complicated income tax act in the history of Canada should be trans lated into simple one or two tax there is the fact that Only a few years ago a Survey completed by a news service found that 70 per cent of canadians use the in come tax tables to pick out the right amount of Federal tax payable on a taxable income of after tax we must Deal with at least two such tables to compute Federal taxes not to men Tion very complicated provincial tax calculations in addition to the Feder Al or that despite tax one third of All returns filed by individuals had errors on them in or that despite the goals of Sim it now takes Over 14 official simplified tax guides to explain possible tax consequences of the affairs of average Canadian tax filers so that they can begin to file their so what can be wrong with the introduction of three different tax returns in 1991 two of these Are simple on Page questionnaires involving no mathematical calculations the new nocal two Page to Short questionnaire and the new nocal on Page to 65 plus a third simplified return is the shortened to reduced from four pages in the benefits of such a new Initia Tive should first be there is no doubt that simplified and easy thread tax some with Large print and wide show responsiveness on the part of Revenue Canada to those who can not Complete their tax forms without some Type of or who do not wish to pay for such limited number the to special will be used Pri Marily by persons with simple in come situations employment in come recipients who Are not claiming employment pension income recipients who Are not transferring amounts from interest recipients who receive t5 slips Only but who do not report accruals from compounding or by recipients of fam ily Pic and certain other Only a limited number of tax deductions and tax credits Are not including the credits for equivalent married or medical this return allows the taxpayer to calculate the Bottom line the amount of refund or bal Ance using either full or abbreviated tax with the to 65 Only pension interest from t5 slips and certain other income can be taxpayers cannot claim medical expenses or Transfer credits not needed by the spouse on this among Many other provi the taxpayer will make no but will not know whether there is an amount due or if the refund amount this return will also Register the senior for the get quarterly prepay again without telling what that figure the to on the other will be sent to taxpayers under age 65 with essentially the same income sources As those who file the to 65 with one exception income from this return Basi Cally allows for the recording of information right off the t4 but will not allow for the claiming of employment or the equivalent Omar ried it will also Register the taxpayer for the child tax credit and the get the taxpayer does not know the amount of the refund or balance due at the time this questionnaire is submitted to Revenue it would appear that the primary benefits of these tax returns will be for those with the simplest of tax situations single one or two information no depend Little income and filing for some filing the nocal returns might save Money otherwise Given to a tax Pra coition for especially it might be a Good Way to handle the annual tax filing ritual without hav ing to leave there Are some very serious problems with these tax re which is the subject of part 2 of this Evelyn jacks is director of Edu cation tax win Winnipeg free press january 1991 pages 920 Philip business editor m a managing your Money by Paul Samyn its been almost two weeks since canadians began their daily dosage of Michael Wil sons deficit fighting wonder but the full extent of the Side effects from his bitter seven per cent solution wont Likely appear for some after the dust canadians will find that they Are paying the get to reduce the deficit and that they probably Are not in As Good a situation As they were two years predicts Richard Price Waterhouses senior tax manager in but right it is anyone unless your new years resolutions included saving receipts virtually every time you opened your its unlikely youll Ever have any idea How much the get Cost it will be the visible Al chief executive offi cer of r tax says of the difficulty canadians have deter mining the personal Price of Swal lowing the Federal governments Fis Cal in jacks most dont even want to know what the biggest Ever tax grab is going to do to their Bottom i believe people Are afraid to sit Down and do the but for those who dont want the Bliss of there Are Esti mates of what the controversial and widely unpopular Levy will do to lets Start with those provided by the Federal government that show families earning under will avoid the gets due mainly to about billion in get for government figures show a single wage earner under 65 with of income will face an increase in sales tax of some but through a partial indexing of the income tax system and a get credit of that taxpayer will actually pay less in tax in things Are even better for a one earner couple with two children and of while the get will Cost them credits and indexing will see them ahead by in the Federal finance department says its Levy manoeuvres will reduce the sales tax Burden for about million about 37 per cent of the but Bear in mind that those Are government figures and other calculations Arent quite As Patrick a partner with global economics in did an analysis of the get and found it would have a negative Impact for All family types and income Levels substantially larger than that estimated by the finance net decrease Gradys calculations show Cana Dian families will experience a net decrease in consumable income of nearly billion in 1991 because of the on average that trans lates to less per whats Grady says the get itself will increase the tax Burden on families by three quarters of Canadian families will pay More in tax in 1991 because of the introduction of the get Grady wrote in an article that appeared in the Canad an tax foundations journal in the increase in the sales tax credit will help to ease the Burden on Lowland Middle income taxpayers families that earn less than will pay More in taxes on average because of the get package and 46 per cent analysts expect 7 Levy to Pinch harder than Ottawa forecasts of that earn less than will face heavier tax Bur Grady estimates Manitoban wont be Hurt As much As the aver age drop in consumable income Here will Only be like the other Manitoba has More families that will lose under the get than will Gradys tally shows families will experience a decrease in consumable income of More than while Only families will see their consumable income go up More than the Way the Fraser Institute sees the get will Cost the average Canadian family about More in had the tax been fully implemented in the righting think tank says Canadas tax Freedom Day would have fallen on july four Days later than it i dont think most people appreciate that they will have to work four More Days to pay for the says Michael the executive director of the Fraser figures from the conference Board of Canada continue the grim statistical in it predicts real disposable income will drop a change from what it would have been without the things Are Only marginally better in 1992 As the conference Board sees real disposable income Down estimated Impact of the 5 get on consumable income single two single All total income Parent Parent Over two single two family group dollars family family 65 seniors adult adults types All income groups 43 38 12 46 57 107 302 443 700 701 774 133 118 110 129 119 1 110 342 481 547 657 751 684 1 44 3 56 75 262 264 324 226 289 300 528 881 20 12 40 28 75 61 174 226 290 325 3s6 456 672 1636 225 34 27 61 26 116 317 438 483 486 564 693 824 222 67 97 136 62 41 212 383 393 429 536 639 821 600 29 10 51 4 45 213 359 434 480 583 684 898 406 a negative amount indicates that families pay More Money to the Federal government As a result o the introduction of the get a positive amount that they either receive Money or pay consumable income is including Transfer less All direct and indirect free press graphic source Patrick Shady the conference Board also sees an inflation rate this year of per a bit higher than the per cent predicted by theres no question in my mind that the get takes Money out of the hands of virtually everyone except Low income says James the conference boards chief that not the kind of news the country beleaguered Middle class wants to earning too much to qualify for the get credits that soften the the bulk of the consumption tax will fall squarely on their for take the Case of a two earner couple with two Chil Dren and a total income of 000 the midpoint on the Federal governments income table in its get statistical they will be forced to Fork Over More in tax in David the Canadian tax foundations senior research Asso says the sheer size of Cana Das Middle class and the Revenue potential it represents has proven too much for governments to re tax revolution Federal budget figures dating Back 30 years Are a Case in Point of in personal income tax accounted for per cent of budgetary revenues while corporate taxes made up per by individuals were saddled with per cent of the budget and corporations were Down to paying Only per but before you begin plotting a tax you should realize the get is the second stage of tax and the revamping of our tax system that began in 1988 was ushered in with some Welcome tax Pope says stage one of Wilsons tax Reform reduced the number of income tax brackets to three from 10 and the top Federal marginal rate was lowered to 29 per cent from 34 per these changes brought Manito Bas top rate Down to per cent from 58 per for the top combined rate is about per Wall Street forecasters predict Strong Market recovery it is hard to be optimistic about the Stock yet some Wall Street forecasters their bullish predictions ignore the january the notion that when it comes to Stock As january so goes the unscientific though it May the popular barometer does not augur Well for Stock in the first three trading Days of Dow Jones Industrial average lost More than 67 this Doest faze the one of which is economist de Yar Deni of Prudential Bache securities in new despite the he still thinks the Dow Jones aver age will Rise to 5000 some time in 1993 from 2560 that would be a gain of nearly 100 per predicted crash another is Elaine Garzarelli of Shearson Lehman Hutton like she thinks the new York Market hit Bottom 11 and is poised to take Garzarelli is Worth listening she called the Stock Market crash of How Likely Are these people to be right the optimists record Over the past year has not been Yardeni did not foresee the Economy wide recession that struck North As one forecaster put the Economy fell off a Cliff in the fourth both Yardeni and Garzarelli work for companies that sell so their soot saying May be tinged with unwarranted hopeful because of their belief in Lavisse Zaire the two Wall Street forecasters have a Good grasp of what is at stake in the current financial with the collapse of communism in Eastern Yardeni likes to boast that Adam Smith has won the Adam an 18thcentury Scot Tish is the intellectual father of the free Market but if the current recession Trig Gers a financial or if the slowdown turns out to be deeper and longer than government policy makers Adam Smith and the Market Economy could be thrown out the a More regu lated Economy would take its Given the High the optimists have a fair Chance of being at least for if they an impressive amount of Money stands to be made in the Stock Garzarelli thinks the Dow will climb to 3185 this for a gain of roughly 25 per two things have to happen she told the financial times of the uncertainty in the persian Gulf will have to be favourably and the Federal Reserve the american Central will have to ease its grip on monetary policy once sideways Drift in the the Stock Market could continue to Drift she even anything below 2500 is a she has put her Money where her Mouth investing the million portfolio she manages in the two other times she plunged confidently into the Market were in 1982 and which groups will outperform the Market air semiconductors electronic components and Home she in the these groups have risen by 120 per cent from their cyclical if you bought those groups right youd be buying them 35 per cent below the equivalent Dow youre not going to get Hurt much in these youll be gaining 60 per cent to 100 per cent Over the next she some words of the fore casters Are talking about the Dow Jones Industrial average Canadian stocks May not perform As As for it May be prudent to wait until the persian Gulf crisis is re if indeed it Thomson news service retirement annuities and Grifs Asol january annuities and Grifs Are available from certain life insurance Trust companies and Banks licensed in availability is subject to Federal legislation and individual corporate policies among those offering such the following table illustrates the monthly income that of registered funds will provide certain Trif Deposit rates Ere also certain Man Muira May apply and All Rales Ato subject 10 change Wii Houi Apt at 61 62 63 64 65 66 67 68 69 70 71 annuity guaranteed 10year minimum mate 1 year female 2yeat joint Ufa annuity guaranteed 10year minimum male female 3 year 4yoar term male or female year income Only minimum formula term to based on Purchase at age 71 All Mont five income shown commence Ana month Attar Purchase a3 Rales Rau the Rales an Jub Jea to change at any Tep Sam the highest Lauing Plant u it Tomt Soult rect Haiku Dove Ine in Nipes free press ;