Well big surprise… today I’m writing about the budget. In my opinion this budget had a lot of hype and very little substance. I (like many others) was expecting some announcement (or even direction) on were the government is going on capitals gains tax but...sigh...nothing...maybe next year… I’ve outlined the good and bad of the budget below.
The Bad
-No capital gains tax relief (despite the fact that this was a campaign promise). The exception to this is if you’re a small business owner, fisherman or farmer, who received an increase in the one time capital gains allowance from $500,000 to $750,000.
-No broad based tax cuts.
The Good
-If you make over $40,000 a year you’ll save $310 a year for each child (under 18).
-Eliminated the annual $4,000 RESP limit and raised the lifetime maximum to $50,000.
-Raised the maximum RESP grant limit (20% of annual contribution) from $400 to $500 annually
-Raised the age limit of RSP conversion from 69 to 71 (In my opinion this is a mixed blessing. Call me pessimistic but I think it’s the first step in increasing the receiving age of both CPP and/or OAS)
-If you buy a qualifying fuel-efficient car you could get a rebate of $1,000 to $2,000.
In my opinion none of the positive aspects of the budget even come close to being able to provide the same benefits as the promised, but not delivered relief from capital gains tax.
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3 comments:
Quick question about the child tax credit - is that per parent or per household? If both parents are earning more than $40K, can the both claim it?
investoid,
I believe it is per household. Here are the relevant excerpts from the budget.
"Budget 2007 proposes to introduce a new non-refundable child tax credit for parents based on an amount of $2,000 (indexed) for each child under the age of 18 years at the end of a taxation year. The tax credit will be calculated by reference to the lowest personal income tax rate for the taxation year (i.e. 15.5 per cent in 2007). This new tax credit will take effect beginning in 2007, and will provide personal income tax relief of up to $310 per child."
"Where the child resides together with the child’s parents throughout the year, either of those parents may claim the credit. In other cases, the credit will be claimable in respect of a child by the parent who is eligible to claim the wholly dependent person credit for the year in respect of a child (or who would be so eligible if that child were the parent’s only child)."
Excellent budget
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