We will have two elections in the next few months: Provincially on Tuesday, September 10thand Federally on Monday, October 21st.
You will be hearing lots of promises. Please challenge our local candidates on the financial promises.
If they say they will cut a tax, ask them how they will pay for it? Either they will need to increase the deficit or they have to cut some other spending. (Don’t let them get away with saying the improving economy will bring in more revenue to cover it…. We’ve heard that one way too many times.)
If they say they will introduce or increase a service, how will they pay for it? Again, they will either need to increase the deficit (go into more debt) or they will have to cut something else from the budget. Just like family households, if a new expense is introduced to the family budget (cell phones and internet), either we need to cut something else out of the budget (land lines and cable TV), or else savings will decrease or debts will increase or a bit of both.
Ask the candidate: What is the purpose of the proposed tax cut? Who will benefit most? And is it a tax cut that you and most voters have been asking for? Or is it a “boutique” tax cut that will only benefit certain individuals?
And if there is a tax cut, should it be for everyone like the recent cut in the Provincial Sales Tax from 8% to 7%? Or should it be focused on those that could use a tax break (lower income individuals and families)? Perhaps there should be no tax cuts as long as we continue to have a budget deficit (more expenses than income each year).
And then there can be tax increases in disguise: like the reduction in Manitoba Rent Assist during the past few years. Rent Assist is a benefit for low-income Manitobans who rent their own accommodations in the private market. Or they can be living in subsidized rental facilities too. Both of these benefits have decreased in the past few years. Renters are paying 30% of their income for rent; previously it was 28%, and that was up from 25% two years ago. This is a “tax increase” to those who can least afford it.
I think we need to keep this benefit for those who need it most. A couple of years ago, I helped a daughter/executor with her father’s estate. I knew that he was receiving rent assist (it appears on the income tax return), but I was surprised to find out he had more than $60,000 in savings. I don’t think he should have been receiving the Rent Assist; others need it more.
Individuals with a certain amount of assets should not be receiving this benefit. There would be more available to those that need it most. Employment and Income Assistance (EIA) is tied to assets and Rent Assist should be too.
And increasing the basic tax exemption does not help those who are already not paying any taxes. There are better ways to help lower income Manitobans and Canadians.
I was surprised by a recent “promise” to eliminate the probate fees when someone dies. First of all, the fee reduction would benefit those with more assets. Every province has a probate fee as a percentage of the estate assets. Manitoba has some of the lowest fees (0.7% – that’s $700 per $100,000 of assets). There will still need to be some type of administration fee; it does cost the judges and clerks time and money to process. I’m not sure who has been pushing for this tax cut? And who gains the most?
And then there was the suggested removal of PST from the cost of having a Will done. I don’t think that is what is keeping you from getting your Will properly written and executed. Last month I wrote about “Why don’t you have a Will?” and challenged you to get it done by August 15. Let me know how you are doing with that challenge. I’ve had an increase in couples and individuals coming to see me in the past few weeks for some “Will counselling”.
If you need some motivation to get your Wills completed, we invite you to an upcoming “Death Café”. We have two in August and two in September. Call to find out the dates and times and to reserve your seat. Federally, there have not been too many financial promises yet; it’s still early. But when they are announced, be sure to ask the candidates about them. How will it be paid for? Both tax cuts and added programs or services cost money!
One item that is of interest to me is the idea of the Federal Pharmacare program. The plan is to make it a universal health care program that no one pays (much like doctors and hospitals now).
My question is how will it be paid for? If it is a universal health care program, it could be $7.3 Billion! And how are we paying for that?? We will need to increase overall taxes to pay for it. Maybe we will still need some type of deductible, but maybe no deductible for the lowest income earners who often cannot afford their medications. And what happens to the private health plans now? Maybe we should focus on those who can least afford their medications now (eliminate the deductible for some).
See my article about Manitoba Pharmacare on my website: AnniMarkmann.ca.
I hope you will engage the candidates who seek your vote. Ask them questions and challenge them on their promises. It will be an interesting few months!
Anni Markmann is a Personal Income Tax Professional and Certified Financial Planner; living, working, and volunteering in our community. Contact Ste Anne Tax Service at 204.422.6631 or 36 Dawson Road in Ste Anne (near Clearview Co-op) or info@saTaxes.ca