Archive for September, 2007

23
Sep

Does Canadian Taxation Discriminate Against Marriage?

Is the institution of marriage under attack in Canada? Social conservatives and various think-tanks believe so, and their fears about the state of the nuclear family are seemingly backed by recently published statistics:

  • The Vanier Institute recently reported that cohabitation has risen sharply over the past few decades. 57% of first unions during 1990-1995 were common law (unmarried cohabitation), compared with just 17% during 1970-1974.
  • Another study from the Vanier Institute notes that divorce rates have risen from 36 per 100,000 people in 1961 to 224 per 100,000 in 2003
  • Statistics Canada’s 2006 census reports that the proportion of single-parent families where the lone parent was never legally married has risen sharply, from 1.5% in 1951 to 29.5% in 2006.

Such statistics are often cast as purely social issues, and conservative voices have frequently cited Canada’s deviation from so-called traditional values as the cause of the aforementioned statistics. Detractors charge that those worried about the state of marriage –whom tend to be older and more religious- are simply unwilling to keep up with the times.

Outside of the explosive social issues, there are still many who maintain that the Canadian Government is waging an inadvertent economic war against married couples through its taxation policies. The belief is that Canadian tax policies favour single people and couples with no legal binding over married couples or common-law couples.

Listed below is a sample of some of the more common tax-saving measures, with an evaluation of whether they are more beneficial to married/common-law couples or two people living as “roommates”. Which spousal configuration can lead to the greatest tax savings?

Disclaimer

This is not professional advice and should not be used in lieu of professional advice. Sources are as follows:

  • Taxtips.ca - Canadian Tax and Financial Information
  • Revenue Canada Agency

Quoted figures are based on 2007 taxation regulations.


Personal Amount
Each person can claim $1,384 as a basic amount against the tax payable. The amount can be claimed for a spouse provided (s)he has a maximum net income of $8,929. No direct equivalent exists for roommates, even if one of the roommates is not working.
Advantage: Marriage / Common-Law

Eligible Dependent
“Roommates” can claim a parent or grandparent as a dependent, whether by blood or though marriage / common-law / adoption. Of course, the “dependent” must be either disabled or underage. The value of the claim is reduced when the dependent’s income reaches $5,702 and eliminated outright at $9,721. Married and common-law couples are prohibited from making spousal claims, while other dependents can be claimed only if the spouse was not in the house and not providing/receiving support from the claimant. Only one claim per household can be made, even if there are multiple dependents.
Advantage: Roommates

GST / HST Credit
Married and common-law couples are only permitted to submit one GST/HST application per household. To receive the credit, the submitter must include his/her spouse’s net income (even it if is zero) and SIN to receive the credit. If you separate from your spouse, you can receive a separate GST/HST credit, provided you are apart for at least 90 consecutive day. A couple living as roommates can each apply for the GST/HST Credit.
Advantage:
Roommates

School / Tuition / Schoolbooks
If you do not have enough income to use your own credits, you can either carry those credits forward to a future year or transfer them to your spouse. You cannot transfer credits to your spouse once they have been carried forward. School-related credits can be transferred to a parent, but unfortunately not a room-mate.
Advantage: Marriage / Common-Law

RRSP
RRSP’s are the most population tax shield and thus deserve mention. Anyone with an earned income can contribute to an RRSP, up to the age of 71. The approximate RRSP claim limit is 18% of the previous years income less pension adjustments, profit sharing plan adjustments and past service adjustments. Limitations may be increased by past service adjustment reversals and unused deductions carried forward. Spousal RRSP contributions can also be made, subject to the same limitations. Roommates obviously don’t have the advantage of making spousal contributions, but real bias may be in what constitutes earned income. Stay-at-home parents do not qualify to make RRSP contributions, which has caused some controversy.
Advantage: Marriage / Common-Law

Final Thoughts:
The largest taxation gap seems to be between couples where both members are working vs. couples with one stay-at-home parent. Housewives (or husbands) –with no recognized earned income- cannot contribute to RRSP’s or have contributions made, cannot immediately use school credits to their own advantage and cannot be credited as eligible dependents. Additonal, an all-round cut in tax rate and across-the-board income splitting would help all types of families … but that’s another topic.

Being a newlywed, I haven’t been able to experience all the nuances of taxation while married. If you have any experiences of your own to share, feel free to leave a comment below.


Other Viewpoints:

07
Sep

The Dark Side: Why People ACTUALLY use Facebook

Facebook

If someone asked “What is Facebook” would you respond –

  • “A social utility that connects you with the people around you”
  • “A human networking site like Myspace, but without the OVERT creep factor”
  • A good way to covertly waste my time at work while appearing from afar to be busy” (at least until your network administrator smartens up and blocks the site, along with YouTube)

In the short run, any of those answers might be correct, but eventually your Facebook odyssey will either end due to boredom or twist into a far more sinister exercise. After the initial excitement of “finding old friends” has worn off (and you realize that close friends generally aren’t rediscovered by chance online after several years), Facebook surfing will regress to planning poorly-disguised attempts at reunions, trolling for photos and determining who NOT to be friendly with.

Trolling for Photos

Ugly  Nothing makes one feel better than when (s)he looks much worse than (s)he did during high school
Beautiful  Did that ugly duckling from back in the day suddenly turn into a swan? Yeah, of course you were only kidding about all that stuff you said to her before… You were kids and kids are mean. It’s all in the past now. Nudge, nudge, wink.
Illicit  Looking at people you couldn’t look at in real life without catching dirty looks. This is as old as the internet (actually much older!) and … we’ll just stop there. Stop thinking about it.

Event Planning (aka Reunion Attempts)

The Internet has given us good and free versions of software to perform mundane social tasks that would otherwise be ignored. Want to write to your mum in overseas? Use Hotmail or Gmail. Want to tell the world your all-important thoughts on life? Blogger will take care of that. Advertise your ground-breaking music? Mp3.com fits the bill. But what about planning events? Some might say Evite works, but it really doesn’t integrate with your “social life” per se. Facebook, on the other hand, allows you to create events and track acceptances WHILE doubling as a psedo-instant messenger, picture gallery (for events gone by) and spam-free email. Plus, the rejections remind you just how wise it is to plan social events based on nostalgia. Want proof? Look at the number of people who say yes to your event, never turn up, and never explain why. They were never going to come in the first place, but who doesn’t get caught up in the weepy prospect of long-lost reunions?

Negative Friend Selection

Some people think that Facebook should only be used to make contact with people they know well or people they know would be happy to make their acquaintance online. Thankfully, those delusional souls are a tiny minority. The majority of people on Facebook make as many friend requests as possible, as though accumulating large numbers of online friends were some measure of social desirability. Hence, most of us have “friends” that we haven’t seen in years, can’t be arsed to contact otherwise, and possibly wouldn’t greet on the street unless eye contact was completely unavoidable.

Still, there those people who refuse your offer for friendship and they are particularly special. Why? Because someone who can’t be bothered to do something so passive as add you to a glorified online rolodex definitely isn’t worth faking pleasantries with in real life. Keep walking. If you see this person a few times a month, you need to work on not remember that you do. If you see this person every day, you can be sure that you hold all the appeal of Reverend Phelps at a Barbara Streisand concert.

A few people use face book to spam others. That’s very bad in itself. It’s better to seek some reputable web hosting services to do a deeper SEO on your website. Nearly all web hosting companies do support their customers for a better earning from their online business. You can have hire hosting from the best image hosting site if your business has to do with pictures and videos. Reading an online webhosting review helps a lot in this regard. You can look for a cheap domain web hosting to maintain your budget.

04
Sep

New Swiss Immigration Law Causes Controversy

Switzerland is known for a number of things, like the St. Bernard dog, the cuckoo clock, the Swiss army knife, and my all-time favourite the Brown Swiss cow. Now the country is making news for another reason: a proposed law that would deport immigrant families if their child were convicted of a violent crime, drug offence, or benefits fraud (see story). The bill is being presented by the nationalist Swiss People’s Party. If the party collects enough signatures in its favour, a referendum will be held on the bill and it could become law.

The proposal has, not surprisingly, been described as racist. First off was the campaign poster showing three white sheep kicking out a black sheep over the words, in German, “For security.” While the term “black sheep” as in “black sheep of the family” generally does not have any racial connotations, critics charge that this particular sheep conjures up images of dark-skinned criminals. In 2004 the Swiss People’s Party used a poster depicting black hands reaching into a pot filled with Swiss passports in a – successful – bid to restrict immigration to the country. The party has also proposed a ban on the construction of minaret towers alongside mosques. On the other hand, it is difficult to tell whether the group is racist per se, that is, in the sense of believing that Whites are superior to members of other races and should receive preferential treatment. For example, the party has called for the cancellation of Swiss aid to Eastern Europe, a region where nearly all the inhabitants are White.

Ueli Maurer, president of the Swiss People’s Party, does not seem too perturbed by this criticism. He reports that there have been “no complaints” about his proposal and expresses confidence that “as soon as the first ten families and their children have been expelled from the country, then things will get better at a stroke.” Furthermore, the party claims that foreigners, who constitute roughly a fifth of Switzerland’s population, are four times more likely to become involved in crime than are Swiss nationals. According to an official study conducted by the Federal Foreigners’ Commission, non-citizens are in fact overrepresented in violent offences.

The bill has been attacked as well on the grounds that it hearkens back to the Nazi practice of “Sippenhaft” (kin liability) whereby a criminal’s family members were punished alongside the offender him- or herself for the crime in question. On one hand, the idea that an individual might be held accountable and made to pay for a relative’s crime goes against our sense of justice. Even the supposedly wrathful God of the Old Testament states that “Parents must not be put to death for the crimes of their children, and children must not be put to death for the crimes of their parents.” Though deportation rarely leads to death, the substance of the argument remains the same.

Nonetheless, many of us feel that at a moral if not legal level parents are responsible to a certain extent for the conduct of their children. As another Biblical saying goes, “Train up a child in the way he should go: and when he is old, he will not depart from it.” Certainly most people would recognize some mitigating circumstances. For instance, few would entirely blame the adoptive parents of a teenager born with fetal alcohol syndrome for an offence he or she might not even be aware of having committed. The vast majority of parents, though, have at least some control over how their sons and daughters turn out.

Another issue raised by the Swiss People’s Party’s bill deals with the rights of non-citizens when they commit crimes in their country of residence. Even individuals such as myself who would probably oppose a law that penalized parents for the misdeeds of their offspring might agree there is a strong case to be made that non-nationals guilty of serious offences in their adopted nations forfeit their right to continue living there. Canada faced this dilemma twice in 1994 and again in 2005. In separate incidents, Georgina Leimonis, police officer Todd Baylis, and Jane Creba were killed by people who had been ordered deported from Canada after committing violent crimes here. In the aftermath of the murders, some legal experts, professors and newspaper columnists (like the Globe and Mail’s Michael Valpy) argued that deporting the offenders in question would be too harsh because they had spent most of their childhoods in Canada, the “only country they knew.” They simply had never become Canadian citizens. One might counter that citizenship is like marriage: if you take the step of obtaining citizenship of a particular country, you are entitled to certain rights and protections that those who decline to do so are not, just like, as I wrote in a previous article, married couples should enjoy privileges that their common-law counterparts do not. Therefore by not making an effort to get the proper papers, the killers of the three above-mentioned individuals lose the legal as well as moral right to stay in this country. (Of course citizens who commit crimes should be prosecuted to the full extent of the law.) In this respect the Swiss proposal to deport immigrants – though not their families – who fail to abide by the laws of the land in which they reside would probably not strike most people as a great injustice.

The future of this bill is yet to be seen. Stay tuned.




Further Research










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Dateline: USA

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