Monday, May 25, 2015

Talking taxes benefits




"In matters of truth or justice, there is no difference between large and small problems, for issues concerning the treatment of people are all the same."
~Albert Einstein

A discussion erupted in my home city Calgary recently because a local law enforcement officer was written about because she has gone on record to having to leave our city because topped benefits isn't good enough.  For most Canadians, they are given a percentage of their wage for a certain number of months leading up to and after giving birth.   What topped up benefits means is getting the company or organization to add to that based on tenure and wage -- sometimes in return for the mother to agree to return to her same job, responsibilities, title and wage she had before leaving on maternity.  In addition to  her federal benefits.

An article was posted by MetroNews Calgary inspired me to respond with my own opinion under their comments:

Having your benefits topped up is a dangerous precedent and expensive one.  It is one thing to be pro-women and pro-mothers, I applaud that.  However, we need to take a look at the big picture -- how realistic is it for mothers to gain the same benefits city-wide?  I like the discussion simply because it is about how our taxes are being used.  When I had my THREE kids maternity leave went from 3 months federal benefits to 6 months.  We've come a long way to allowing a year.  However, topping up is not something that every new mom is afforded.  Unless it is legislated for everyone, it shouldn't be an elite squad's right.  Once again, do I have to repeat ... it is our taxes that we're using to support this.  There are far many ways this could be coordinated ... like, child bearing aged moms and pops put into a fund (like we older folks do for retirement) and that fund is used as child benefits.  A la carte, chosen based on needs i.e. maternity or child care.  The young'uns don't want to fit the bill for retirement unless it is their own, then us elders, don't want to fit the bill on what we cannot benefit from.  Perhaps benefits and tax breaks should be chosen by each citizen based on where they need the help?  Just thinking out loud (which is more than I can say for those that come up with buying votes and managing our tax dollars).

Like it or not, we all have to face it that our population is widening between generations with major age gaps.   It is going to become an ever-increasing dilemma to any governing organization trying to please the populous.  When you have a broad gap between Baby Boomers (age 55 plus) and their kids of Gen-X/Melinia (ages 18-35 specifically), you're going to have a nightmare trying to keep everyone happy (and get the votes centered).



I'm just about smack in the middle.  I had my child-bearing years and am now facing the daunting task of looming retirement.  Safe to say, both milestones in life are important.  We need to keep the young people working while the older ones keep saving as much as they can for safekeeping and to avoid being a burden to the tax base in 10 to 15 years.

I was even at the tail end of child extra-curricular tax benefits.  When the Harper government in Canada introduced a tax credit for parents of children who are enrolled in sports mainly were given a break to compensate for fees associated.  I applauded the idea because, although I had had to pay for that on my own, I also recognized that kids who are in sports tend to stay out of trouble which can be a burden on resources and funds.  I always said that being a figure skater for many years, was an expensive way for my parents to keep me out of trouble.  Later on as my skills improved, the cost for ice time, coaching, private lessons, competitions, shows, skates, etc. got really expensive, I got a PT job to contribute.  I think that was a brilliant move on my parents' part because it demonstrated how keen I was to skate because I loved it, not because my parents could afford to give me the best tools to become good at it.

We should all look at the big picture.  If the government funds a select group, the other groups will want their own piece of the benefits.  Like I said, although I don't argue with the many merits of the various tax breaks, I have been disappointed to miss the mark to gain any pay off.



Let's take a look at just voting.  Statistics were given that in Canada only 34% of the age group of 18-24 vote, whereas 65% of the 65 plus age group do.  That is a huge balancing act to be sure.  So what do politicians do?  They appeal to the segment that garners the most votes.  That isn't rocket science.  Then they poll and speculate that they had better appeal to the other age segment that may wake up and realize that their vote can cause change and make a difference in their present lives in their future. 

Fortunately or unfortunately, depending upon where you fall, many of the benefits fall in the middle.  The child-bearing, child-rearing age group, child care paying, population.... who get maternity benefits, child care subsidies (in some areas), and parents of kids 8-16 year olds get breaks for being a model parent.  Ironically, my math shows they represent 1% of the voting populous while reaping a good 85% of the tax funding.

Then there is the 18-24 year old group that get breaks to squirrel away to put a down payment on buying a house.  Again, I'm saying that is a good idea because real estate transactions fuel the economy -- buyers get loans from lenders, builders get funds generated by building which sweetens the economy.  When buyers stop buying, the economy rolls to an abrupt halt or swiftly slow downs.

Sounds like a lot of imbalance if you ask me.  Then there is the other part of the equation.  The one group that tends to help the investment community is from the older age segment.  Then investment, gives money for banks and such to lend money.  A different spiral.

If you have two spirals working in opposite ends of the economy it is no wonder the ones in the middle get a lot of dust.  But then again, that is where the government focusses a lot on their funding and tax breaks.

Okay, so I've gone on and one and painted a very real picture.  What do we do?  Seems pretty simple to me.  Take an example from an employee's insurance benefits offered by the best corporations:  you get a certain percentage of your wage to be used as YOU wish it to be used.  You have a say in how much you contribute (usually between 1-5%) which the company matches.  Sounds like the ideal company to work for doesn't it?

I'm getting to my point:  why doesn't the federal government use the same process.  Instead of the expense, studies and pushback on deciding on where tax breaks go, let the individual citizen make the decision themselves.  For example, everyone gets 5% of their wage to go into a federal tax fund/break.  Each individual gets to decide themselves where that fund goes:

  • 18-24 year olds into education, saving for a house, starting a business, saving for when they have a child (income top up and child care)
  • 25-40 year olds can put it towards putting their kids into sports programs, buying down their mortgage, saving for their retirement
  • 40-55 year olds use it for paying off their mortgage, to give them more disposable income to do other things that fuel the economy, like make investments, plan their retirement, buy a vacation property
  • 55-65 will hopefully have paid off their mortgage and use the left over funds for investment and planning their retirement
  • 65+ are allowed to spend their hard saved cash with little penalties because they do not burden the rest of the tax system, they are rewarded if they help their kids or grand kids buy a house, pay for their education -- all which society benefits from.
Sometimes you can't see the forest because you are only looking at trees.  Let's pressure our politicians and leaders to have more integrity and use our votes to the benefit of everyone, not a select few. 

The onus would then be on citizens to elect those that appeal to the big picture, not greedy with power or backfilling their own agenda. 



Sounds like Utopia to me.  Doesn't sound too difficult to me either.  What may be the most difficult would be to hold ourselves accountable on how we vote, who we vote for, and then only approve those that have the integrity to benefit society as a whole. 

This is not socialist thinking or communism.  We would still be using the democratic process.  The pay off would be when everyone, not a select few, gets a piece of the action and benefits.


"All animals are equal, but some animals are more equal than others."
~George Orwell