swamp
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Post by swamp on Mar 4, 2019 15:24:20 GMT -5
The biggest thing I can't figure out (possibly because I've never taken the time to read a lot about it) is it seems both the conservatives and liberals I know up there hate him. Sometimes I wonder how he got elected lol, but my sample size is rather small. He's pretty!!!!
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weltschmerz
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Post by weltschmerz on Mar 4, 2019 15:26:27 GMT -5
Some guy you met isn't data. Yes, of course there are different retirement plans...it depends on how much you worked! Does everyone in the US get the same amount of Social Security payments? I don't know a soul who has to hide assets and accounts. No. How much SS one receives is dependent on what you earned. It's based on your indexed monthly earnings during the 35 years in which you earned the most. Exactly! VB just threw that in there to muddy the waters.
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weltschmerz
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Post by weltschmerz on Mar 4, 2019 15:28:11 GMT -5
Trudeau is unfairly characterized by Weltz' remarks. His crimes are no worse than other politicians or political parties, there is just an unrelenting smear campaign going on against him. It's very similar to what they did to Wynn. It's a Witch Hunt!! If anything I said about him isn't true, kindly provide a rebuttal.
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laterbloomer
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Post by laterbloomer on Mar 4, 2019 20:49:23 GMT -5
Trudeau is unfairly characterized by Weltz' remarks. His crimes are no worse than other politicians or political parties, there is just an unrelenting smear campaign going on against him. It's very similar to what they did to Wynn. It's a Witch Hunt!! If anything I said about him isn't true, kindly provide a rebuttal. I don't mind letting in immigrants from war torn countries, I don't believe Trudeau is instituting Sharia law (and I don't think that most people making that accusation even know what it would mean) The costumes in India were kind of silly but all of our PM's have done the dress up bit. Pushing for the SNC cover up is typical political stuff, it shouldn't happen but they all do it. Intelligent people can disagree about having pipelines going through the country. And our government should apologise for the sixties scoop and residential schools. I'm not a fan of running up huge deficits but I'm even less of a fan of cutting all our social services. Contrary to how this looks, I don't really like Trudeau. I'm mainly depressed. I have on one to vote for.
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Virgil Showlion
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Post by Virgil Showlion on Mar 4, 2019 21:53:33 GMT -5
I'm not a fan of running up huge deficits but I'm even less of a fan of cutting all our social services. You realize what happens to "all our social services" when governments exhaust their ability to borrow, right? They either try to print their way out of it, leading to hyperinflation (which includes, BTW, the cost of social services); they try to tax their way out of it, which simply doesn't work (look to Illinois or France for stark examples); or they melt down, a la Venezuela, Brazil, etc. Hence you wind up in a situation where your social services are cut back suddenly, brutally, and indefinitely, and at the same time your ability to borrow is shot, your creditors (many being Canadian pensions, mutual funds, insurers, endowments) are taking a bath, your economy is very likely plunging into recession, jobs are being lost, tax revenues are plummeting, crime and unrest are spiking, an entire generation has no ability to function without the infrastructure you've long provided, and the need for the social services you now can't provide is generally greater than ever. What about this outcome seems sensible to you? Do you just hope to be dead or expatriated by the time it inevitably happens?
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Value Buy
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Post by Value Buy on Mar 5, 2019 9:56:43 GMT -5
And you worry so much about how we are treated by our system when your's is just like ours! I was just talking to a gentleman from Windsor last week and we discussed Canadian retirement plans available to the citizens there for over two hours. Some were great, others not so great. Have to spend a lot of energy hiding assets and accounts to keep it out of huge Government confiscation rates at death, etc. Same for the medical side. Lots of problems. Seems Canadians have a lot of similar concerns about their government programs as we do. Some guy you met isn't data. Yes, of course there are different retirement plans...it depends on how much you worked! Does everyone in the US get the same amount of Social Security payments? I don't know a soul who has to hide assets and accounts. Okay, help me out here. He was talking about two entirely different retirement accounts available to citizens. One uses a life expectancy table where you live to 90 or 91 and you are limited on withdrawls based on this table. The other retirement account allows a somewhat faster rate of withdrawl. You are allowed to pass either account to a marriage partner at no tax consequesnce. When that person passes on your children are taxed at a 44% rate of the total balance. Since the one account can be withdrawn at a faster rate, people remove as much money from this account as fast as possible because retirement effective tax rates are in the 9% area. When he told me what the Province and Canadian tax rates were for working citizens, I see why your healthcare takes care of you. You are reamed for years for paying for it. Makes our private insurance companies look like pikers
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laterbloomer
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Post by laterbloomer on Mar 5, 2019 11:24:55 GMT -5
I'm not a fan of running up huge deficits but I'm even less of a fan of cutting all our social services. You realize what happens to "all our social services" when governments exhaust their ability to borrow, right? They either try to print their way out of it, leading to hyperinflation (which includes, BTW, the cost of social services); they try to tax their way out of it, which simply doesn't work (look to Illinois or France for stark examples); or they melt down, a la Venezuela, Brazil, etc. Hence you wind up in a situation where your social services are cut back suddenly, brutally, and indefinitely, and at the same time your ability to borrow is shot, your creditors (many being Canadian pensions, mutual funds, insurers, endowments) are taking a bath, your economy is very likely plunging into recession, jobs are being lost, tax revenues are plummeting, crime and unrest are spiking, an entire generation has no ability to function without the infrastructure you've long provided, and the need for the social services you now can't provide is generally greater than ever. What about this outcome seems sensible to you? Do you just hope to be dead or expatriated by the time it inevitably happens?
Oh stop it. The Conservative line is always that it's social services that are killing the budget. Get rid of corporate welfare and collect all the taxes owing by corporations then come back and talk to me.
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weltschmerz
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Post by weltschmerz on Mar 5, 2019 14:14:15 GMT -5
It's a Witch Hunt!! If anything I said about him isn't true, kindly provide a rebuttal. I don't mind letting in immigrants from war torn countries, I don't believe Trudeau is instituting Sharia law (and I don't think that most people making that accusation even know what it would mean) The costumes in India were kind of silly but all of our PM's have done the dress up bit. Pushing for the SNC cover up is typical political stuff, it shouldn't happen but they all do it. Intelligent people can disagree about having pipelines going through the country. And our government should apologise for the sixties scoop and residential schools. I'm not a fan of running up huge deficits but I'm even less of a fan of cutting all our social services. Contrary to how this looks, I don't really like Trudeau. I'm mainly depressed. I have on one to vote for. Neither do I. However, as you know, Trudeau invited the whole world in, and they were flying into NY and then just hopping across the border. Everyone from Nigeria, from Somalia, from the USA, everyone. Oddly enough, many from Africa had the exact same story....to a T. They were coached to lie to us. "I'm a gay man who was persecuted in my country." Then they try to get their wives and children in. Our services were strained to the hilt, from medical to schools to housing. The guy who actually invited them wouldn't pay, and the money he offered us didn't come close to what we had to shell out. Furthermore, I never said he was trying to institute sharia law. I said he had no problems with it. Please don't put words in my mouth. .
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weltschmerz
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Post by weltschmerz on Mar 5, 2019 14:19:17 GMT -5
Some guy you met isn't data. Yes, of course there are different retirement plans...it depends on how much you worked! Does everyone in the US get the same amount of Social Security payments? I don't know a soul who has to hide assets and accounts. Okay, help me out here. He was talking about two entirely different retirement accounts available to citizens. One uses a life expectancy table where you live to 90 or 91 and you are limited on withdrawls based on this table. The other retirement account allows a somewhat faster rate of withdrawl. You are allowed to pass either account to a marriage partner at no tax consequesnce. When that person passes on your children are taxed at a 44% rate of the total balance. Since the one account can be withdrawn at a faster rate, people remove as much money from this account as fast as possible because retirement effective tax rates are in the 9% area. When he told me what the Province and Canadian tax rates were for working citizens, I see why your healthcare takes care of you. You are reamed for years for paying for it. Makes our private insurance companies look like pikers Which accounts? Name them. I'm retired. I get a work pension, a provincial pension and a federal pension. None are based on life expectancy. None let me withdraw at a faster rate. None lets me pass the account on to my offspring when I croak. What are you talking about?
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laterbloomer
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Post by laterbloomer on Mar 5, 2019 14:37:38 GMT -5
Some guy you met isn't data. Yes, of course there are different retirement plans...it depends on how much you worked! Does everyone in the US get the same amount of Social Security payments? I don't know a soul who has to hide assets and accounts. Okay, help me out here. He was talking about two entirely different retirement accounts available to citizens. One uses a life expectancy table where you live to 90 or 91 and you are limited on withdrawls based on this table. The other retirement account allows a somewhat faster rate of withdrawl. You are allowed to pass either account to a marriage partner at no tax consequesnce.
When that person passes on your children are taxed at a 44% rate of the total balance. Since the one account can be withdrawn at a faster rate, people remove as much money from this account as fast as possible because retirement effective tax rates are in the 9% area. When he told me what the Province and Canadian tax rates were for working citizens, I see why your healthcare takes care of you. You are reamed for years for paying for it. Makes our private insurance companies look like pikers We have no such animals. Not of the public variety anyway.
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NastyWoman
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Post by NastyWoman on Mar 5, 2019 18:07:34 GMT -5
Some guy you met isn't data. Yes, of course there are different retirement plans...it depends on how much you worked! Does everyone in the US get the same amount of Social Security payments? I don't know a soul who has to hide assets and accounts. Okay, help me out here. He was talking about two entirely different retirement accounts available to citizens. One uses a life expectancy table where you live to 90 or 91 and you are limited on withdrawls based on this table. The other retirement account allows a somewhat faster rate of withdrawl. You are allowed to pass either account to a marriage partner at no tax consequesnce. When that person passes on your children are taxed at a 44% rate of the total balance. Since the one account can be withdrawn at a faster rate, people remove as much money from this account as fast as possible because retirement effective tax rates are in the 9% area. When he told me what the Province and Canadian tax rates were for working citizens, I see why your healthcare takes care of you. You are reamed for years for paying for it. Makes our private insurance companies look like pikers You are talking about estate taxes here and attempts to dodge them. Even if what you describe is true, Canadians are rank amateurs compared to what the repub congress managed to do for the richest of the rich
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weltschmerz
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Post by weltschmerz on Mar 5, 2019 18:44:02 GMT -5
Okay, help me out here. He was talking about two entirely different retirement accounts available to citizens. One uses a life expectancy table where you live to 90 or 91 and you are limited on withdrawls based on this table. The other retirement account allows a somewhat faster rate of withdrawl. You are allowed to pass either account to a marriage partner at no tax consequesnce. When that person passes on your children are taxed at a 44% rate of the total balance. Since the one account can be withdrawn at a faster rate, people remove as much money from this account as fast as possible because retirement effective tax rates are in the 9% area. When he told me what the Province and Canadian tax rates were for working citizens, I see why your healthcare takes care of you. You are reamed for years for paying for it. Makes our private insurance companies look like pikers You are talking about estate taxes here and attempts to dodge them. Even if what you describe is true, Canadians are rank amateurs compared to what the repub congress managed to do for the richest of the rich Even if he's talking about estate/inheritance taxes and not pensions, that 44% is utter bullshit. Maybe people shouldn't get their financial information from some guy they met in the street.
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OldCoyote
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Post by OldCoyote on Mar 5, 2019 22:32:07 GMT -5
Why are Canadian seniors going without their meds? I thought you had socialized medicine? Socialized medicine doesn't pay for things like meds, dental, glasses, ambulance, etc. You need supplementary insurance for that, and it's expensive, especially for seniors. Huh!!
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Value Buy
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Post by Value Buy on Mar 6, 2019 9:15:36 GMT -5
Okay, help me out here. He was talking about two entirely different retirement accounts available to citizens. One uses a life expectancy table where you live to 90 or 91 and you are limited on withdrawls based on this table. The other retirement account allows a somewhat faster rate of withdrawl. You are allowed to pass either account to a marriage partner at no tax consequesnce. When that person passes on your children are taxed at a 44% rate of the total balance. Since the one account can be withdrawn at a faster rate, people remove as much money from this account as fast as possible because retirement effective tax rates are in the 9% area. When he told me what the Province and Canadian tax rates were for working citizens, I see why your healthcare takes care of you. You are reamed for years for paying for it. Makes our private insurance companies look like pikers Which accounts? Name them. I'm retired. I get a work pension, a provincial pension and a federal pension. None are based on life expectancy. None let me withdraw at a faster rate. None lets me pass the account on to my offspring when I croak. What are you talking about? He did name them at the time, but when in the Jaccuzzi I do not have a recorder or pen and paper. It sounded to me these are investment vehicles allowed by the government outside of your national pension program or company retirement plans. Whether they are permitted by Canada, or locally by the Province, I am not sure. He compared these accounts to being similar to our IRA accounts here in the states. He was explaining how residents use the one fund to pull distributions out at a faster rate in retirement than the other one, as eventually when both the recipient as well as the heir dies off, the 44% taxation rate on the balance kicks in before the next generation heir get the actual proceeds. He is here for a month, so I might see him later this month and will ask him for the names of these accounts.
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Virgil Showlion
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Post by Virgil Showlion on Mar 6, 2019 10:03:40 GMT -5
You realize what happens to "all our social services" when governments exhaust their ability to borrow, right? They either try to print their way out of it, leading to hyperinflation (which includes, BTW, the cost of social services); they try to tax their way out of it, which simply doesn't work (look to Illinois or France for stark examples); or they melt down, a la Venezuela, Brazil, etc. Hence you wind up in a situation where your social services are cut back suddenly, brutally, and indefinitely, and at the same time your ability to borrow is shot, your creditors (many being Canadian pensions, mutual funds, insurers, endowments) are taking a bath, your economy is very likely plunging into recession, jobs are being lost, tax revenues are plummeting, crime and unrest are spiking, an entire generation has no ability to function without the infrastructure you've long provided, and the need for the social services you now can't provide is generally greater than ever. What about this outcome seems sensible to you? Do you just hope to be dead or expatriated by the time it inevitably happens?
Oh stop it. The Conservative line is always that it's social services that are killing the budget. Get rid of corporate welfare and collect all the taxes owing by corporations then come back and talk to me. Not that one wrong justifies another, but to humour you: Corporate welfare at the local and provincial levels is substantial: about $25 billion/yr. across all cities and provinces. That includes subsidies, make-work programs, environment and safety incentives, entrepreneurship grants, and tax breaks for startups. Nobody has a clear idea of how much economic benefit governments recoup, although Weltz' beloved, big-business-loving Fraser institute seems to think it's marginal. Hence I won't argue that cities and provinces can't at least try cutting off the "welfare" and seeing which industries, if any, break. Even if they did, I wouldn't shed any tears over Bombardier or Walmart Canada going belly-up, for example. In this thread we're clearly talking about the federal government. Their contributions to corporate welfare -type programs is far more modest, about $6.5 billion/year. That's a small fraction of our $37 billion 2018 federal deficit. It's a negligible fraction of the some $160 billion the feds spend on SS, EI, childcare, and federal money to healthcare and provincial social programs. Short version: we could eliminate federal corporate welfare entirely and, even assuming it had no ill effects whatsoever on industry and tax revenues (a big if), it would cut less than 15% of the insane deficits P.M. Trudeau is running up. You still think avoiding social services cuts now is worth a complete social services collapse later?
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laterbloomer
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Post by laterbloomer on Mar 6, 2019 10:04:42 GMT -5
Which accounts? Name them. I'm retired. I get a work pension, a provincial pension and a federal pension. None are based on life expectancy. None let me withdraw at a faster rate. None lets me pass the account on to my offspring when I croak. What are you talking about? He did name them at the time, but when in the Jaccuzzi I do not have a recorder or pen and paper. It sounded to me these are investment vehicles allowed by the government outside of your national pension program or company retirement plans. Whether they are permitted by Canada, or locally by the Province, I am not sure. He compared these accounts to being similar to our IRA accounts here in the states. He was explaining how residents use the one fund to pull distributions out at a faster rate in retirement than the other one, as eventually when both the recipient as well as the heir dies off, the 44% taxation rate on the balance kicks in before the next generation heir get the actual proceeds. He is here for a month, so I might see him later this month and will ask him for the names of these accounts. There are no taxes for the spouse or common law partner. They are considered co owners of pensions etc. We don't have a set 44% tax rate. "What are Canada’s inheritance tax rates? As there is no inheritance tax in Canada, all income earned by the deceased is taxed on a final return. Non-registered capital assets are considered to have been sold for fair market value immediately prior to death. Any resulting capital gains are 50% taxable and added to all other income of the deceased on their final return where income tax will be calculated at the applicable personal income tax rates. They are taxed at the applicable capital gains tax rates. The fair market value of a Registered Retirement Savings Plan (RRSP) or a Registered Retirement Income Fund (RRIF) is included in the deceased person’s income and taxed at the regular applicable personal income tax rates with no special treatment for any capital gains earned within the RRSP or RRIF." You have some really jumbled info.
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laterbloomer
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Post by laterbloomer on Mar 6, 2019 10:10:13 GMT -5
That has been the conservative mantra forever. Yet they still manage to come up with tax breaks and incentives for corporations.
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Virgil Showlion
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Post by Virgil Showlion on Mar 6, 2019 11:19:50 GMT -5
That has been the conservative mantra forever. Yet they still manage to come up with tax breaks and incentives for corporations. - You're not talking to a man who supports deficit-financed tax breaks and incentives for corporations. Your concerns aren't in dispute.
- If you'd read my previous post, you'd see that even in the best possible circumstances, eliminating all corporate welfare at the federal level barely makes a dent in our budget shortfalls.
- If you were a more reasonable person generally, you wouldn't be trying to justify your misguided priorities by pointing at some hypothetical conservative's equally misguided priorities.
Just once in my life, I'd like someone who comes into the room with the attitude "deficits shmeficits; we can't cut welfare" to take a look at the data, acknowledge reality, forsake their excuses, and leave saying, "It's unfortunate but true: we need to eliminate our federal deficits, and cutting social services is indispensable to this goal." I'd like to believe that somewhere out there are Canadians who care more about dealing with a painful reality than they do about comforting lies and "but the other guy" excuses for dereliction of responsibility. That's it. I don't care how you vote. I don't care if you vote. I don't care who you conclude is best suited to tackle deficits. I just want a basic acknowledgment that logic can penetrate Canadians' thinking on the acceptability of social service cuts.
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laterbloomer
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Post by laterbloomer on Mar 6, 2019 12:51:54 GMT -5
Logic does permeate my thinking. Don't touch the social services until you have eliminated the other waste that benefits corporations and the rich. There are many other places to find the savings before you get to social services.
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weltschmerz
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Post by weltschmerz on Mar 6, 2019 14:08:33 GMT -5
Which accounts? Name them. I'm retired. I get a work pension, a provincial pension and a federal pension. None are based on life expectancy. None let me withdraw at a faster rate. None lets me pass the account on to my offspring when I croak. What are you talking about? He did name them at the time, but when in the Jaccuzzi I do not have a recorder or pen and paper. It sounded to me these are investment vehicles allowed by the government outside of your national pension program or company retirement plans. Whether they are permitted by Canada, or locally by the Province, I am not sure. He compared these accounts to being similar to our IRA accounts here in the states. He was explaining how residents use the one fund to pull distributions out at a faster rate in retirement than the other one, as eventually when both the recipient as well as the heir dies off, the 44% taxation rate on the balance kicks in before the next generation heir get the actual proceeds. He is here for a month, so I might see him later this month and will ask him for the names of these accounts. Well, now you're changing your tune. You initially said this..... I was just talking to a gentleman from Windsor last week and we discussed Canadian retirement plans available to the citizens there for over two hours. Some were great, others not so great. Have to spend a lot of energy hiding assets and accounts to keep it out of huge Government confiscation rates at death, etc. Same for the medical side. Lots of problems. Seems Canadians have a lot of similar concerns about their government programs as we do.
Are you talking about investment vehicles or "retirement plans available to the citizens outside of the normal pension programs"? One of these things are not like the other. Get back to us when you make up your mind.
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Virgil Showlion
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Post by Virgil Showlion on Mar 6, 2019 14:39:50 GMT -5
Logic does permeate my thinking. Don't touch the social services until you have eliminated the other waste that benefits corporations and the rich. There are many other places to find the savings before you get to social services. Hypothetically: we've wiped out 100% of federal subsidies and miraculously sustained no impact to industry or tax revenues. This has taken care of $6.5 billion. We have $35 billion to go if we want to run a $5 billion surplus to pay down our debt by the year 2200. What else are you cutting to claw back $35 billion per year?
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laterbloomer
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Post by laterbloomer on Mar 6, 2019 15:17:29 GMT -5
Logic does permeate my thinking. Don't touch the social services until you have eliminated the other waste that benefits corporations and the rich. There are many other places to find the savings before you get to social services. Hypothetically: we've wiped out 100% of federal subsidies and miraculously sustained no impact to industry or tax revenues. This has taken care of $6.5 billion. We have $35 billion to go if we want to run a $5 billion surplus to pay down our debt by the year 2200. What else are you cutting to claw back $35 billion per year?
Have you collected all outstanding corporate taxes and eliminated the tax breaks?
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Virgil Showlion
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Post by Virgil Showlion on Mar 6, 2019 16:40:45 GMT -5
Hypothetically: we've wiped out 100% of federal subsidies and miraculously sustained no impact to industry or tax revenues. This has taken care of $6.5 billion. We have $35 billion to go if we want to run a $5 billion surplus to pay down our debt by the year 2200. What else are you cutting to claw back $35 billion per year?
Have you collected all outstanding corporate taxes and eliminated the tax breaks? All federal corporate tax breaks I'm aware of are a part of the $6.5 billion/yr. already counted as corporate welfare. I'm also not aware of any significant outstanding corporate taxes. Usually "outstanding corporate tax" refers to multinationals that hold most of their operating capital in foreign banks to avoid repatriating it and paying taxes. It's a problem with several big companies in the US, but to the best of my knowledge, Canadian tax law doesn't permit it for businesses operating inside Canada. Our tax code is much simpler and stricter than the US's. Hence I'd appreciate your pointing me to an article that provides an idea of how much money we're talking about.
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mollyc
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Post by mollyc on Mar 7, 2019 3:35:10 GMT -5
Some guy you met isn't data. Yes, of course there are different retirement plans...it depends on how much you worked! Does everyone in the US get the same amount of Social Security payments? I don't know a soul who has to hide assets and accounts. Okay, help me out here. He was talking about two entirely different retirement accounts available to citizens. One uses a life expectancy table where you live to 90 or 91 and you are limited on withdrawls based on this table. The other retirement account allows a somewhat faster rate of withdrawl. You are allowed to pass either account to a marriage partner at no tax consequesnce. When that person passes on your children are taxed at a 44% rate of the total balance. Since the one account can be withdrawn at a faster rate, people remove as much money from this account as fast as possible because retirement effective tax rates are in the 9% area. When he told me what the Province and Canadian tax rates were for working citizens, I see why your healthcare takes care of you. You are reamed for years for paying for it. Makes our private insurance companies look like pikers Okay. I'm going to take a shot at explaining this. By the end of the year that a retiree with RRSPs turns 71, they have do one of 3 things - cash out their RRSP (paying taxes on the funds), move it to a RRIF or move it to an annuity (both tax free). I would assume that the annuity would be set up with a life expectancy table and that the other account he is talking about is a RRIF but don't bet the farm on that. I haven't paid much attention to RRIFs, et al, as I am 16 years away from 71. If you do end up asking him about this, please let us know the answer as I am curious. Regarding the retirement effective tax rate being in the 9% area when the base federal tax rate is 15% and we don't know the provincial rate he's dealing with, it could be because of the non-refundable tax credits he can claim against his income. Assuming he qualified for the entire age amount (over 65) and was collecting a pension other than CPP and OAS, in 2018 he could have had federal non-refundable tax credits of $21,142 which would result in a $3,171.30 reduction in his taxes. There are other things that could have decreased his taxable income or increased the non-refundable tax credits but I'm not getting into that now. Regarding the 44% tax for a non-spousal/non-dependent child heir, I am skeptical of that. I suppose it might be possible if the heir was already earning over $210,000 on their own and for some reason the funds weren't or couldn't be claimed on the deceased's final tax return. It would depend on their personal circumstances which just means I would need to know more details. I think in most circumstances, the deceased would be taxed as if they had withdrawn all of the money in the year of their death. Depending on the amount of funds cashed in, it is possible the deceased's effective tax rate will be significantly higher than 9%. If the retirement funds are in an RRSP, RRIF or annuity, no taxes have been paid on the funds or the money they earned. That is why funds are taxed when they are withdrawn. I can't imagine anyone's effective tax rate not being lower than the official rates for their income. It isn't straight 15% up to x then 20.5% up to y, etc. Almost everyone qualifies for the basic personal amount at least. You aren't taxed on the money you paid in to EI or CPP or a number of other things. Plus there are a number of ways to legally lower your taxes like save/invest through RRSPs or TFSAs. The government likes giving you tax breaks on them so hopefully they won't have to pay you OAS in the future. And the more money you make, the more options you have. Please note that I am not saying some or all of what he told you isn't true, just that I currently am highly skeptical based on what I know about our tax system.
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Value Buy
Senior Associate
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Post by Value Buy on Mar 7, 2019 9:41:46 GMT -5
Okay, help me out here. He was talking about two entirely different retirement accounts available to citizens. One uses a life expectancy table where you live to 90 or 91 and you are limited on withdrawls based on this table. The other retirement account allows a somewhat faster rate of withdrawl. You are allowed to pass either account to a marriage partner at no tax consequesnce. When that person passes on your children are taxed at a 44% rate of the total balance. Since the one account can be withdrawn at a faster rate, people remove as much money from this account as fast as possible because retirement effective tax rates are in the 9% area. When he told me what the Province and Canadian tax rates were for working citizens, I see why your healthcare takes care of you. You are reamed for years for paying for it. Makes our private insurance companies look like pikers Okay. I'm going to take a shot at explaining this. By the end of the year that a retiree with RRSPs turns 71, they have do one of 3 things - cash out their RRSP (paying taxes on the funds), move it to a RRIF or move it to an annuity (both tax free). I would assume that the annuity would be set up with a life expectancy table and that the other account he is talking about is a RRIF but don't bet the farm on that. I haven't paid much attention to RRIFs, et al, as I am 16 years away from 71. If you do end up asking him about this, please let us know the answer as I am curious. Regarding the retirement effective tax rate being in the 9% area when the base federal tax rate is 15% and we don't know the provincial rate he's dealing with, it could be because of the non-refundable tax credits he can claim against his income. Assuming he qualified for the entire age amount (over 65) and was collecting a pension other than CPP and OAS, in 2018 he could have had federal non-refundable tax credits of $21,142 which would result in a $3,171.30 reduction in his taxes. There are other things that could have decreased his taxable income or increased the non-refundable tax credits but I'm not getting into that now. Regarding the 44% tax for a non-spousal/non-dependent child heir, I am skeptical of that. I suppose it might be possible if the heir was already earning over $210,000 on their own and for some reason the funds weren't or couldn't be claimed on the deceased's final tax return. It would depend on their personal circumstances which just means I would need to know more details. I think in most circumstances, the deceased would be taxed as if they had withdrawn all of the money in the year of their death. Depending on the amount of funds cashed in, it is possible the deceased's effective tax rate will be significantly higher than 9%. If the retirement funds are in an RRSP, RRIF or annuity, no taxes have been paid on the funds or the money they earned. That is why funds are taxed when they are withdrawn. I can't imagine anyone's effective tax rate not being lower than the official rates for their income. It isn't straight 15% up to x then 20.5% up to y, etc. Almost everyone qualifies for the basic personal amount at least. You aren't taxed on the money you paid in to EI or CPP or a number of other things. Plus there are a number of ways to legally lower your taxes like save/invest through RRSPs or TFSAs. The government likes giving you tax breaks on them so hopefully they won't have to pay you OAS in the future. And the more money you make, the more options you have. Please note that I am not saying some or all of what he told you isn't true, just that I currently am highly skeptical based on what I know about our tax system. Thank you. He did not discuss his annual income, but said he has an effective tax rate of about 9 percent in retirement. You were very informative here, and much of what you said matched with our conversation. I believe it was the RRSP and RRIF retirement funds we discussed. I believe it was the RFIF fund that had the retirement table qualification. He was from Windsor Ontario and discussed the over all rate of taxation and variations between Provinces and localities and when you add EVERYTHING UP being much higher than here in the states including sales tax, except of food.
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mollyc
Familiar Member
Joined: Dec 24, 2010 2:12:25 GMT -5
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Post by mollyc on Mar 7, 2019 10:57:32 GMT -5
The tax difference will vary alot depending on which 2 points you compare. I have tried doing the comparison for myself a couple of times. There were usually variables I couldn't find for the US. The one thing that was consistant was that I earned more money then the US equivalent so at my level it is pretty much a wash. I may look to see if that holds true.
I tend to look at the differences in taxation as an economy of scale. It is not unusual for some posters to point out that California alone has a similar population and GDP as Canada.
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Deleted
Joined: May 18, 2024 12:52:00 GMT -5
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Post by Deleted on Mar 9, 2019 12:21:42 GMT -5
Some guy you met isn't data. Yes, of course there are different retirement plans...it depends on how much you worked! Does everyone in the US get the same amount of Social Security payments? I don't know a soul who has to hide assets and accounts. No. How much SS one receives is dependent on what you earned. It's based on your indexed monthly earnings during the 35 years in which you earned the most. Not to mention the point system.
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weltschmerz
Community Leader
Joined: Jul 25, 2011 13:37:39 GMT -5
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Post by weltschmerz on Mar 9, 2019 13:53:22 GMT -5
No. How much SS one receives is dependent on what you earned. It's based on your indexed monthly earnings during the 35 years in which you earned the most. Not to mention the point system. What are you yammering about now? The point system has nothing to do with retirement or Social Security.
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Miss Tequila
Distinguished Associate
Joined: Dec 19, 2010 10:13:45 GMT -5
Posts: 20,602
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Post by Miss Tequila on Mar 9, 2019 18:59:41 GMT -5
Not to mention the point system. What are you yammering about now? The point system has nothing to do with retirement or Social Security. I love when non-Americans claim to know it all. Technically they are credits and not points (I’ve hear people use the terms interchangeably) and yes they do have everything to do with social security.
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weltschmerz
Community Leader
Joined: Jul 25, 2011 13:37:39 GMT -5
Posts: 38,962
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Post by weltschmerz on Mar 9, 2019 19:21:19 GMT -5
What are you yammering about now? The point system has nothing to do with retirement or Social Security. I love when non-Americans claim to know it all. Technically they are credits and not points (I’ve hear people use the terms interchangeably) and yes they do have everything to do with social security. Well, by all means, kindly explain the "point system" that Diogenes was talking about. He did say points, and not credits.
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