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RCO





Joined: 02 Mar 2009
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Location: Ontario

PostPosted: Mon Jan 30, 2017 9:19 am    Post subject: Canadians will pay more if dental and health plans taxed Reply with quote

( I don't understand the reasons as to why they are considering taking away this exception ? it doesn't make a lot of sense )



John Ivison: Millions of Canadians will pay at least $1,000 more if Ottawa taxes health and dental plans, study finds


John Ivison | January 29, 2017 | Last Updated: Jan 30 6:54 AM ET
More from John Ivison
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The argument for killing the health and dental benefit exemption is that it does not treat all remuneration equally.
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The debate about the taxation of health and dental benefits has, to this point, been an academic argument about fairness and tax efficiency.

But it’s about to get intensely political, as Canada’s doctors and dentists tell voters exactly how much the move to tax plans that cover prescription drugs, dental and vision care might cost them.

The very public lobbying campaign aimed at persuading the government to drop any plans it may have to tax health care not provided under provincial systems will kick into high gear when the House of Commons resumes next week.

The Canadian Dental Association reports that 50,000 protest emails have already been sent to local MPs and Bill Morneau, the finance minister, through its www.donttaxmyhealthbenefits.ca online petition.

Key to the success of those efforts will be soon-to-be released research from the Conference Board that suggests middle-income earners across the country will pay an additional $1,000 (or more depending on the province) in additional federal and provincial income tax, if the government does decide to make the health and dental plans held by 13.5 million working Canadians a taxable benefit.


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The Conference Board study for the CDA suggests someone earning $45,000 in full-time employment in Ontario, with family coverage, would pay an extra $1,167 in tax. Those earning $60,000 in that province would pay an additional $1,043, while workers earning $90,000 would pay $1,277 more. Those numbers are reasonably consistent across the country, except (it almost goes without saying) in Quebec, where those earning $90,000 would pay a combined $1,729. Obviously, if two wage-earners in the same family have coverage, that amount will double.

The prospect of health and benefit taxation being included in the spring budget was first raised by the National Post last month.

The subject was subsequently brought up by the opposition Conservatives in the House of Commons and by journalists with the prime minister at his end-of-year press conference.

The government’s talking points have been consistent — no decisions have been taken and any move would not be made in isolation. However, health-care organizations remain deeply worried that the proposal is still on the table.

The Liberals have been at pains to point out this would not be a tax grab, aimed at getting their hands on the $2.9 billion that could be levied (at least in year one), if health and dental benefits were treated as income in the same manner as company cars or life insurance.

The government has confirmed a review of health and dental benefits was undertaken by a panel of seven academics, who looked at a range of tax credits (particularly those that benefit high-income Canadians), with the goal of making the tax system as fair, efficient and simple as possible.

The academic argument in favour of taxing health and dental is straightforward — most employee benefits are taxed but, for reasons lost in the mists of past public policy, health and dental coverage is not. The argument for taxation is that those without private health plans, often people on low income, are subsidizing those who have them, generally people in the public sector or those who work in large companies.

Reforming the taxation of benefits has been advocated by the Department of Finance for years.

It was also endorsed by an advisory panel on health-care innovation, chaired by former University of Toronto president David Naylor, in 2015. The Naylor report suggested ending the current system and introducing a “tax swap,” where the government brought in a refundable tax credit to help all Canadians purchase private insurance. The problem with this solution is that it would add additional cost to provide a decent level of coverage — around $1 billion in the Naylor report.

This is not a government that is looking to spend more money, in what is likely to be a bad news budget.
A more cost-effective course of action for the Liberals would be to highlight the existing medical expense tax credit (METC). Making benefits taxable makes them eligible for reimbursement under the METC.

The Conference Board report points out that for those earning less than $45,000, the increased income-tax burden would be cancelled out by claiming the existing tax credit.

The problem is that only 17 per cent of Canadians ever get around to claiming this credit — and it would not offset the cost increase for those earning more than $45,000.

As a result, the potential exists for a massive political backlash.

The health-care coalition points out that when Quebec taxed health and dental benefits in 1993, it resulted in a substantial loss of coverage.

Once benefits were subject to provincial income tax, there was a 14-per-cent decrease in employee-provided supplementary health coverage in the province.

If those levels were repeated nationally, the revenues from the new tax would be much reduced and many Canadians would be forced to buy expensive private coverage (an average $3,521 a year for a family plan).

Meddling with the equilibrium of the private/public health mix has the potential for unintended consequences.

But this is a government that has already proven itself in favour of income tax “fairness” for the middle class “and those working hard to join them.”

If taxing the health and dental benefits of the top 30 per cent of earners yields revenues to fund other social engineering experiments, as far as the Liberals are concerned, so much the better.

National Post

http://news.nationalpost.com/f.....tudy-finds
RCO





Joined: 02 Mar 2009
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PostPosted: Mon Jan 30, 2017 9:24 am    Post subject: Reply with quote

those figures are truly stunning , a $1000 extra in tax for an average family is a truly devastating amount to have to deal with these days and could lead to people having to give up there health and dental coverage or go without important operations and dental work , it would be a terrible burden to place on average Canadians
cosmostein





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PostPosted: Tue Jan 31, 2017 2:07 pm    Post subject: Reply with quote

At times like this I think back to that old Margaret Thatcher quote:
"The trouble with Socialism is that eventually you run out of other people's money."

This is what happens when you start to run out of other peoples money;
You just go in for more.

The amount of creative revenue sources being pitched by this Federal Government is staggering.
RCO





Joined: 02 Mar 2009
Posts: 6287
Reputation: 229.2
votes: 3
Location: Ontario

PostPosted: Tue Jan 31, 2017 2:26 pm    Post subject: Reply with quote

cosmostein wrote:
At times like this I think back to that old Margaret Thatcher quote:
"The trouble with Socialism is that eventually you run out of other people's money."

This is what happens when you start to run out of other peoples money;
You just go in for more.

The amount of creative revenue sources being pitched by this Federal Government is staggering.



I think its shocking that eliminating this exception is even being considered , clearly Ottawa is in much worse financial shape than people think if there being forced to make moves like this
Bugs





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Posts: 4154
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PostPosted: Tue Jan 31, 2017 7:47 pm    Post subject: Reply with quote

RCO wrote:
cosmostein wrote:
At times like this I think back to that old Margaret Thatcher quote:
"The trouble with Socialism is that eventually you run out of other people's money."

This is what happens when you start to run out of other peoples money;
You just go in for more.

The amount of creative revenue sources being pitched by this Federal Government is staggering.



I think its shocking that eliminating this exception is even being considered , clearly Ottawa is in much worse financial shape than people think if there being forced to make moves like this


What's wrong with this tax? It's a benefit people get as part of their employment remuneration. The employer claims a deduction for it. Why does it suddenly have no value when it is passed on to the employee?

The fact is that these plans exist mostly in the public sector, or the state-regulated parts of the economy. The plans appear disproportionately as 'throw-ins' for managers, and for those favoured by the right skin colour and right genitals to get work in the public sector.

Why shouldn't these people pay their rightful share?
RCO





Joined: 02 Mar 2009
Posts: 6287
Reputation: 229.2
votes: 3
Location: Ontario

PostPosted: Wed Feb 01, 2017 10:15 pm    Post subject: Reply with quote

( according to reports and trudeau himself if he is to be believed , this tax is not being considered and won't be in the spring budget )


Health benefits tax off the table, Trudeau says


Prime Minister Justin Trudeau says his government has no plans to tax Canadians on employer-provided health benefits, a declaration that came after mounting opposition to the move.


The federal government says it has no plans to tax employer-provided health benefits.



By Bruce Campion-SmithOttawa Bureau

Wed., Feb. 1, 2017



OTTAWA—Prime Minister Justin Trudeau now says his government has no plans to tax Canadians on employer-provided health benefits, a declaration that came after rising backroom opposition to the move.

Under questioning by the opposition Conservatives, both Trudeau and Finance Minister Bill Morneau had been refusing to comment on whether such a tax was in the cards for the coming budget, a line that Morneau stuck with Wednesday.

“We are not going to talk about budget measures in advance of the budget,” Morneau told reporters.

But a short time later in question period, Trudeau suggested the tax would not be part of the upcoming budget after he was quizzed on the issue by interim Conservative Leader Rona Ambrose.

“Millions of Canadian workers will be forced to pay the Liberals' new tax on health and dental benefits. . . . Why would the prime minister even consider doing this?” Ambrose asked.

But Trudeau replied that such a tax was not part of the Liberals’ budget strategy.

“We are committed to protecting the middle class from increased taxes and that is why we will not be raising the taxes the member opposite proposes we will do,” the prime minister told MPs.

Trudeau repeated that assertion to Conservative MP Denis Lebel (Lac-Saint-Jean), who asked whether there would be a “new tax on dental and health care?”

“It was never in our plan to increase taxes as suggested by the member,” Trudeau replied.

The finance department has been considering making employer-provided health and dental plans a taxable benefit, a move that could add more than $1,000 to the income tax bills of the 13.5 million Canadians who have such plans.

Such a move could generate close to $3 billion in additional tax revenues annually, an enticing amount for a government keen to find new sources of cash.

But as word got out, opposition from the insurance industry, unions, medical associations and small businesses began to mount.

https://www.thestar.com/news/canada/2017/02/01/health-benefits-tax-off-the-table-prime-minister-justin-trudeau-says.html
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