Tax changes - fact or fiction?

[Bunnyhop]

Doctors are middle class now? Who knew

I think you would be very surprised at the "take home" amount for many family doctors, particularly considering the investment they have put into their education.

Oh please. Doctors are doing very well financially, if the cars they drive, the houses they live in, the private schools their kids attend, etc..... are any indication.

And I don't begrudge them that living at all. But I'm not going to sympathize with them if they lose a tax advantage that middle class employees only dream of.

[rustled]

Doctors are middle class now? Who knew

I think you would be very surprised at the "take home" amount for many family doctors, particularly considering the investment they have put into their education.

Oh please. Doctors are doing very well financially, if the cars they drive, the houses they live in, the private schools their kids attend, etc..... are any indication.

And I don't begrudge them that living at all. But I'm not going to sympathize with them if they lose a tax advantage that middle class employees only dream of.

Middle class employees can have those advantages, too, if they are willing to take the same risks.

Some do, and are eventually able to quit being employees and perhaps even become employers.

This is what I think is missing from the equation. People considering self-employment look hard at the substantial risk they're taking to become self employed. On the other side of the scale is the reward which, if everything goes well, will make that risk worth taking. For them, and for their family. What happens when that side of the scale is too light?

[Rider59]

no doctors are much more educated and are more needed with high education.

Then there are some here who think getting a HS diploma makes you edumacated.

[rustled]

One of the complaints seems to be about income splitting.

I wonder how people would feel about changing the income tax act so spouses could report combined income. Would this make sense for most families, including those with no children in the home?

How about for those families who are caring for aging parents, or a disabled family member?

Would it be unfair to single people?

[erinmore3775]

Rustied wrote: Respectfully, erinmore3775, as the ex-spouse of someone who used every single cent of our children's education fund to start up his business, I disagree with your analysis.

You are to be lauded for starting your own company. I understand that you chose to remove funds from your child's RESP to use as start up funds for your company. Under the current tax code allows withdrawal from the RESP and the use of that money to "purchase" shares in the start-up company. "Dividends" can then be allotted back to the child and taxed as necessary.

What the current tax code did not intend was that during start-up funds supposedly designated as "education funds," but not registered, would be used in the establishment of the corporation. This would result in "dividends" being paid back to family members through sprinkling to reduce the total income tax payable.

It would be interesting to analyse which method was used. The first involves some legal manoeuvring and a paper trail. The second involves little other than a hope that payments as dividends and taxes paid fall below the levels that would trigger an audit. Note, that the second alternative is not illegal however, it illustrates the tax interpretation oversight that the current government wishes to correct.

[rustled]

Rustied wrote: Respectfully, erinmore3775, as the ex-spouse of someone who used every single cent of our children's education fund to start up his business, I disagree with your analysis.

You are to be lauded for starting your own company. I understand that you chose to remove funds from your child's RESP to use as start up funds for your company. Under the current tax code allows withdrawal from the RESP and the use of that money to "purchase" shares in the start-up company. "Dividends" can then be allotted back to the child and taxed as necessary.

What the current tax code did not intend was that during start-up funds supposedly designated as "education funds," but not registered, would be used in the establishment of the corporation. This would result in "dividends" being paid back to family members through sprinkling to reduce the total income tax payable.

It would be interesting to analyse which method was used. The first involves some legal manoeuvring and a paper trail. The second involves little other than a hope that payments as dividends and taxes paid fall below the levels that would trigger an audit. Note, that the second alternative is not illegal however, it illustrates the tax interpretation oversight that the current government wishes to correct.

Your assumption that our children's education fund involved RESPs is quite incorrect. In fact, you've made several incorrect assumptions in this post.

In our case, my spouse was able to convince me to risk the money we had been investing for our children's education in a business venture instead, because if the business was successful we would be able to pay for their educations. You see how this works?

Our risk, as a family, was predicated on there being a better return than if he simply continued working as an employee in the resource sector.

You presume we were up to some crafty maneuvering to avoid paying taxes, when what we were doing was taking a huge risk to invest in a different future than the one we faced each time the resource sector took a plummet, one where we felt if we worked hard enough there would be a better future for us.

Not the unimaginable wealth folk like JT enjoy, you understand. Simply a better future, though still quite middle-class (probably lower middle-class by most standards). The same kind of future people think of when they enter the trades, for example, thinking instead of working at a mine or a mill, or for someone else's business, maybe they'll put up the capital and start something of their own.

[Veovis]

I wonder how people would feel about changing the income tax act so spouses could report combined income. Would this make sense for most families, including those with no children in the home?

This is actually something I think should be looked at. Take these 2 scenarios

Couple 1 - both earn $75,000
Couple 2 - 1 working earns $150,000

no kids etc in the picture.

Who is the wealthier family.....hint....it's not couple 2.....you know the "rich" ones making so much.

The tax act is a monster as it is but Family income, and Family income with kids really needs to be addressed. People lose GST and other rebates due to combined incomes why shouldn't it count in other ways?

[rustled]

I wonder how people would feel about changing the income tax act so spouses could report combined income. Would this make sense for most families, including those with no children in the home?

This is actually something I think should be looked at. Take these 2 scenarios

Couple 1 - both earn $75,000
Couple 2 - 1 working earns $150,000

no kids etc in the picture.

Who is the wealthier family.....hint....it's not couple 2.....you know the "rich" ones making so much.

The tax act is a monster as it is but Family income, and Family income with kids really needs to be addressed. People lose GST and other rebates due to combined incomes why shouldn't it count in other ways?

Hm. Good questions!

[Veovis]

IF you keep in mind the Conservatives actually put in a small measure to help though not truly address this, and it only applied to people with kids, and people lost their bloody minds over it, you know, because math is hard and it's easier to label people than know the truth.