That, of course, is crap and I can prove it!
First let's look at the analysis done by the Coach:
_________________________________________________________Our staff did something different. We read the Budget document, called the Ministry Office for details, and added up the numbers. Then, we looked at the results as to how these proposals would affect the retired, or soon to be retired. It tired us out!
Consider a retired couple, receiving total retirement income of $41,400 after tax per year*, healthy enough to enjoy some comfort in retirement.
Many of those items used on a daily basis will now be subject to an 8% cost increase, because of the new harmonized sales tax introduced by the Liberal government in this Budget.
Look at just a few of those items that will cost more, without getting more.
* Cable TV: if $60 monthly, yearly increase is $57.60 more.* Golf Fees: if $1,500 yearly X 2, yearly increase is $240.00 more* Gym Membership: if $35 month X 2, yearly increase is $67.20 more.* Hydro: if $85 monthly, yearly increase is $81.60 more.* Haircuts: if $450 X 2 annually, yearly increase is $72.00 more.* Heating Fuel: if $800 annually, yearly increase is $64.00 more.* Internet: If $65 monthly, yearly increase is $62.40 more.* Income Tax Prep. If cost is $150 X 2, yearly increase is $24.00 more.* Legal Fees: for wills, P.Of A., advice, etc. add 8%, $32 more.* London Knights tickets: 4 games X 2, yrly incr. is $11.52 more.* Magazine Subscription: $25 annually X 4, increase is $8.00 more* Movie Tickets: one per month X 2, yearly increase is $16.32 more* Newspapers Subscription: $20 monthly, yrly incr. is $18.91 more* RRIF/RRSP**: $400,000 family savings, yrly incr. $1,040.00 more.
**This is a NEW HIDDEN TAX OF $52 per $20,000 on deposit, annually
* Telephone: if $48 monthly, yearly increase is $46.08 more* Tim Hortons Coffee: 3 per week X 2, yrly increase is $41.18.* Toronto Theatre: 2 X $150 ticket, yrly increase $24.00* Vacation Travel: $450 airline ticket X 2, yrly increase $76.00 more* Veterinarian: Beagle is Family! add $32.00 more.* Vitamins: $60 monthly X 2, yrly increase $115.20 more
Are you ready for the TAX KICK coming? THIS TAX IS COMING IN 2010.NEW TAXES OVER $2,100.00 MORE every year
Wow, does he/she have you on the edge of you seat, contemplating moving to Arizona or maybe suicide?
I would love to meet the so-called Boomer Wealth Coach. In fact I would love to oppose him/her in debate so that I might clean the floor with she/he. To start, I should say that I like the analysis that the Coach did. The retired couple is not doing too badly. Their income is $41,400 and their expenses are around $13,066. Leaving out, for now, the RRSP/RRIF tax increase, they will pay approximately $1,045.26 in increased tax with the HST implemented. The reason I left out the RRSP/RRIF is that it is under review at the province and subject to intense lobbying by the industry (and we all know that lobbyists run most governments). But for sake of our analysis let's put the RRSP/RRIF tax back in, making the total tax increase with the HST in place $2,100/year, as the Coach states.
Let's start with a couple of minor points. You pay $900 per year for haircuts? That is more than you pay to heat your home. Find a new barber, maybe one in Canada?. You pay $400 per year (each and every year) for legal advice? Are you a criminal? You pay $340 per year for magazines and newspaper, plus you pay $780 per year for Internet. You can get all the news and articles from the web for free! Finally, get rid of Fido and save $400 per year.
Now let's get to some meaty items that the Coach missed.
Your total income is $41,400 per year. 1) Your current tax rate is 6.05% for Ontario. In 2010 that rate drops to 5.05%. You save $414 per year. 2) I assume you own you own home. In 2010 the property tax credit for seniors will rise to $1025 each which will save you another $400 per year. 3) The sales tax credit for families in your circumstance will be $260 per person or $520 per year. And 4) let's not forget the $1000 non-taxable adjustment payment that you get in year one.
So let's do the math. Your increase in the tax load with the HST is $1050 per year for sake of argument ($2,100 per year if the RRSP/RRIF provision sticks).
Your reduction would total $1334 per year plus $1000 in year one for a total of... wait for it... $2334 in year one and $1334 per year.
Your savings would be $1284 in year one ($284, assuming the RRSP/RRIF provision sticks) and $284 per year thereafter.
No. It can't be. The Coach is wrong? The government is telling the truth? This will never wash at Conservative headquarters!
2 comments:
I don't see the 8% increase at the pumps mentioned in this article. This will be a huge expense for most of us.
I also have senior relatives in this income bracket and the women do probably spend over $450 a year on haircuts as they get their hair set regularly - the men probably don't spend near that amount, but the total of $900 may not be that far off.
Given the pictured guy's hairline, I can't see $450 per year in haircuts. If so, he's certainly getting ripped off!
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