Yearly Archives: 2017

TAX FREE SAVINGS ACCOUNT (TFSA) DESIGNED TO MAKE MARRIED AND WEALTHY EVEN RICHER

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TAX FREE SAVINGS ACCOUNT (TFSA) DESIGNED TO MAKE MARRIED AND WEALTHY EVEN RICHER

(These thoughts are purely the blunt, no nonsense personal opinions of the author about financial fairness and discrimination and are not intended to provide personal or financial advice.)

Tax Free Savings Accounts (TFSA) have been previously been addressed in this blog (boondoggle). However, what has not been addressed is how financially discriminatory TFSAs are to senior single person (never married) and poor family households in terms of benefits like Old Age Security (OAS) payouts and surviving spouse benefits. Discussions of financial benefits by media and think tanks for TFSAs usually only occur as a single entity unto themselves, but not TFSAs impact on total financial formulas.  Assessment of OAS benefit payouts and surviving spouse (widowed) benefits need to include assets such as TFSAs since wealthy do not need and do not deserve OAS support.

History of TFSAs

The Federal Conservative Party brought in TFSAs in 2009 beginning with $5,000 maximum contribution per eligible person per year.  In 2015, the Conservatives raised maximum contribution to $10,000.  The Federal Liberal Party, when they came into power dropped maximum contribution to $5,500.  Withdrawals from TFSA do not affect the total TFSA maximum contribution amount.  TFSA can be topped to maximum contribution amounts even with withdrawals.  (Thank goodness, $10,000 contribution limit was dropped to $5,500-maintaining $10,000 amount would have meant married/coupled household contribution limits rising to $120,000 to date, $240,000 in twenty years and $360,000 in thirty years-single person households would be half of these amounts).  

Also, many TFSA holders with modest incomes have a spouse with higher income. Their family’s total income can be much higher, and TFSA rules permit a high-earning spouse to contribute to both their own and their lower-income spouse’s TFSA-each up to the $5,500 annual limit, for a total of $11,000 per couple.

As expected, TFSAs benefit married/coupled households and wealthy over single person households and poor families since they do not have the same financial ability to maximize contributions.  Also, less tax revenue will be generated by governments as a result of TFSA implementation since TFSAs are not considered to be income.

“Why TFSA doubling will exacerbate income inequality” article states: (tfsa-inequality)

‘Using Statistics Canada’s Survey of Financial Security for 2012, a radically different picture emerges of the TFSAs tilt toward higher incomes. This survey provides a revealing view of TFSA patterns at the level of family incomes rather than individual incomes, and it also reflects the increasing size of account balances with family income.While households including unattached persons with total incomes below $60,000 constituted 52 percent of all families, they held only 31 percent of all TFSA balances in late 2012-less than half the share of TFSAs based on individual incomes. At the other end of the income spectrum, only 4.4 percent of families had incomes of $200,000 and higher-but they held more than triple that share of all TFSA balances at 15 percent.Upper-income families enjoy TFSA tax savings to an even more unbalanced degree than those statistics might suggest: they typically generate higher investment returns on their TFSA assets than lower earners, and they avoid the higher personal tax rates that would otherwise apply on the income from assets shifted into their tax-free accounts.’

TFSAs maximum contribution amounts to date:  Every eligible Canadian got $5,000 of new contribution room each year from 2009 to 2012.  For the years 2013 and onwards, the amount is $5,500 except for year 2015 when the limit was $10,000 per person.  To 2017, the total eligible amount per single person household is $52,000.  For married/coupled household total eligible amount is $104,000.

The above information only deals with TFSAs as a single entity of financial formulas for households.  What is not mentioned is the impact TFSAs (not counted as income) have on other income sources for single person versus married/coupled households.

TFSA Benefits Married/Coupled Households and Wealthy Most for OAS and Total Income

Contributions to a TFSA come from after tax income and are not deductible for income tax purposes. Any amount contributed as well as any income earned in the account (for example, investment income and capital gains) is generally tax-free, even when it is withdrawn.  When withdrawals occur, contributions can still be made up to maximum TFSA contribution room.  Therefore, it is possible to have huge TFSA accounts and still receive full Old Age Security (OAS) supplements without OAS clawbacks (oas-clawback-outrageously-beneficial addendum) and oas-clawback-outrageously-beneficial).  The clawback of OAS benefits in 2016 starts with a net income per person of $73,756 (couple $147,512) and completely eliminates OAS with income of $119,615 (couple $239,230).  OAS is supposed to support those with low incomes, not the wealthy.  Furthermore, even while receiving OAS times two for married/coupled family unit, each spouse can still contribute $11,000 per year to TFSA accounts and pay less tax because they can pension split.  

TFSA Benefits Surviving Spouse over Singles

A TFSA holder can name a spouse or common-law partner as the “successor holder” in the TFSA contract.  On the death of the holder, the spouse becomes the new holder, keeping the tax exempt status of the TFSA.  This will not affect the TFSA contribution room of the spouse.  The Income Tax Act only allows the tax exempt status of the TFSA to be passed on to a spouse or common-law partner who is a successor holder, which differs from a beneficiary.  If some other person is named as a beneficiary of the TFSA, the account will no longer be a TFSA.

If a surviving spouse/common-law partner receives proceeds from the TFSA, the proceeds can be used to make an exempt contribution to the survivor’s TFSA, and not affect the contribution room of the survivor, as long as it is done before the end of the first calendar year following the holder’s death (rollover period), and it is designated as an exempt contribution in the survivor’s income tax return for the year the contribution was made (taxtips).

So, if spouse is deceased in 2017, in future years surviving spouse (widowed) through exemption can:

  • keep all of previous TFSA proceeds achieved as a married/coupled household
  • accumulate investment income on total TFSA achieved as a couple
  • continue to make full TFSA contributions as single person household.

Potential Investment Income

If one considers that earning potential for the wealthiest occurs for thirty years between ages of 30 to 60, then in 2017, the TFSA potential principal for married/ coupled household is $100,000+, in 2027, $200,000+, and in 2037, $300,000+ not including investment income.

Using the ‘rule of 72’, a simple calculation of possible investment income is as follows: money invested at 7% will double in 10 years, if invested at 10% it will double in 7 years.  A modest and achievable interest of 3.5% annually means money will double in about twenty years.

If $11,000 TFSA is invested for one year at 3.5% annual interest, it will double in about twenty years to $22,000.  If $11,000 is invested every year for 30 years at a 3.5% return, it will be worth $568,893.  These simple examples show the potential TFSA principal and investment asset for a surviving spouse whose partner is deceased after thirty years, all of which is tax free and will not affect OAS if income is less than $73,756 per year as the survivor spouse.

CONCLUSION

There can be no doubt TFSAs benefit widowed,  married/coupled households and the wealthy over single person and poor family households.  To correct the financial inequality and discrimination, a cap needs to be placed on total monies in TFSA accounts.  Clearly, financial formulas need to be revised to include assets such as TFSAs before OAS payouts are allowed.  To compensate for huge TFSA assets for widowed, married/coupled households and the wealthy, OAS payouts should be reduced or eliminated from these households, and transferred to single person and poor family households below certain income thresholds.  Regardless of marital status (single, divorced, widowed, or married) all retirement security programs such as OAS should include assets, not just income as determination of eligibility for OAS.

GRAPHS SHOWING PRINCIPAL AND INTEREST ON MAXIMUM TFSA CONTRIBUTIONS FOR MARRIED/COUPLED HOUSEHOLDS VERSUS SINGLE PERSON HOUSEHOLDS

See next page.

tfsa principal and interest 30 yrs

TAXES: FLAT VS. PROGRESSIVE AND DEBUNKING “THE TAX SYSTEM EXPLAINED IN BEER”

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TAXES:  FLAT VS. PROGRESSIVE AND DEBUNKING “THE TAX SYSTEM EXPLAINED IN BEER”

(These thoughts are purely the blunt, no nonsense personal opinions of the author about financial fairness and discrimination and are not intended to provide personal or financial advice.)

Prelude:  Yet again, the tax system explained in beer story is used to ludicrously and simplistically explain the tax system, and no less by the USA White House.  We have been wanting to do a blog post on flat and progressive tax systems comparisons, so here it is. 

The story about “The tax system explained in beer” (democratic) has been flitting around the internet since 2001.  Apparently no author can be identified for the article. The analogy makes the argument that since wealthy people pay the most in taxes, they will also receive the most benefit from a tax cut. It also suggests that wealthy people will leave the US if they are made to pay more in taxes.

It appears that how the reader interprets the article is based on ‘right’ or ‘left’ political thinking, flat versus progressive taxation systems and social democracy or not.

On October 30, 2017 Sarah Huckabee Sanders, USA White House Press Secretary began her daily press briefing pitching USA Trump tax cuts by reciting the article.  Then she said,  “And that, ladies and gentlemen, is how our tax system works,” Sanders continued. “The people who are being paid the highest taxes will naturally benefit from a tax reduction but not the largest benefit. Taxing them too much and they might start drinking overseas where the atmosphere is somewhat friendlier. This is a silly story but it illustrates a very important point. Our tax cuts and reforms will create a fair system that works better for everyone. It will make our country the friendliest in the world for American families trying to build a better life for their children. And for American companies seeking a competitive edge. I will be happy to get that story to everybody so you can get those numbers later. Again, I know that may be an oversimplification but it paints a very good picture of the tax system.”

From the analogy the information is condensed as follows, ‘the premise is every day ten men go out for beer and the bill for all ten comes to $100.  If they paid their bill the way we pay our taxes, it goes something like this…’ (first four people are the poorest).  Based on their incomes, the ten men would pay:

  • The first four men (poorest) would pay   $  0
  • The fifth would pay                                  $  1
  • The sixth would pay                                $  3
  • The seventh would pay                           $  7
  • The eighth would pay                              $12
  • The ninth would pay                                $18
  • The tenth man (richest) would pay          $59  (for a total of $100)

Everyone is happy with this arrangement, until the owner throws them a curveball. Because they are such good customers, he reduces the bill to $80.  It is decided it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, so each man would now be paying:

(Blog author comment:  Truly funny, the totals add up to $79, not $80, so it appears the bar tender will be short changed by $1.)

  • First four persons        $  0
  • Fifth person                 $  0 (100% saving on prior payment)
  • Sixth person                $  2 ( 33% saving)
  • Seventh person           $  5 (28% saving)
  • Eighth person              $  9 (25% saving)
  • Ninth person                $14 (22% saving)
  • Tenth person                $49 (16% saving) for a total of $79

However, the men begin to compare their savings with those who get the least in percentage of savings complaining the most.

The wealthy get all the breaks. Wait a minute, yelled the first four men, we didn’t get anything at all. This new tax system exploits the poor. The nine men yelled at the tenth and made him feel bad so the next time the tenth man didn’t show up for drinks and the nine sat down and had their beers without him. When it came time to pay the bill, they discovered something important. They no longer had enough money between them all to even cover half of the bill.

For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.’  (End of analogy).

Reader comment:  ‘Yes, the perilous story of the wealthy person who will leave it all behind if the taxes go a percentage point too high…all his businesses, his customers and his suppliers, all his family, his home, his social networks, his local culture, his kids schools, why he’ll just pick up all of that and magically whisk it away to some other place with a lower tax burden for free.  The only thing the story is missing to start with is “Once upon a time…” like all fairy tales’.

 

ANOTHER EXPLANATION OF THE ABOVE ANALOGY

Taken from the following article:   “SA Tax System Explained Through Beer” (based on South African Rand) tax-system-explained-through-beer

‘Economies are not one-liners. We’re talking about systems here – and you can’t talk about taxation and spending without talking about “where did the money come from”.

So let me attempt to re-tell that parable.

Ten Men Walk Into A Bar…And One Of Them Owns The Brewery.  Suppose that every day, ten men go out for beer and the bill for all ten comes to R100.  If they paid their bill the way we pay our taxes, it would go something like this:

  • The first four men (poorest) would         R  0
  • The fifth would pay                                 R  1
  • The sixth would pay                                R  3
  • The seventh would pay                           R  7
  • The eighth would pay                              R12
  • The ninth would pay                                R18
  • The tenth man (richest) would pay          R59 (for a total of R100)

So, that’s what they decided to do.

There are many reasons why the richest man agreed to pay the bulk of the bill, but the important one is that he owned the only brewery in town, and the barman would buy all the beer from him.

The seventh, eighth and ninth men all worked in the brewery, and earned salaries according to their skill level. The sixth and fifth men owned farms which supplied the hops – although they didn’t earn particularly well, because the brewery was the sole buyer and it negotiated quite stiff rates.

The remaining four men were farm labourers who earned enough to eat, but not enough to drink.

The way that the brewery man saw it: the drinks must flow in order for the barman to be in business and sell the beer that the brewery produced.

The ten men were also very protective of their beer industry, and would run any newcomers out of town. This meant that the ten men were the only real regulars at the bar, and the only real source of its income.

So to keep the bar in business and the town happy and the drinks flowing, the richer men would pick up most of the tab. And happily, most of the bill would end up back in the brewery man’s hands anyway.

So the ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the barman threw them a curveball. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by R20”. Drinks for the ten men would now cost just R80.

What he didn’t say is that there had been a bumper season of barley, so the brewery had produced its beer fairly cheaply that month – and the brewery owner had offered the barman a substantial discount on the beer in order to get rid of it.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men? How could they divide the R20 windfall so that everyone would get his fair share?

They realized that R20 divided by six is R3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so

  • The fifth man, like first four, now paid           R  0 (100% saving)
  • The sixth instead of R3 now paid                 R  2 (33% saving)
  • The seventh instead of R7 now paid            R  5 (28% saving)
  • The eighth instead of R12 now paid             R  9 (25% saving)
  • The ninth instead of R18 now paid               R14 (22% saving)
  • The tenth instead of R59 now paid               R49 (16% saving) for total of R79

Each of the six was better off than before. And the first four continued to drink for free.  But, once outside the bar, the men began to compare their savings.

“I only got a dollar out of the R20 saving,” declared the sixth man. He pointed to the tenth man,”but he got R10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a rand too. It’s unfair that he got ten times more benefit than me!”

“That’s true!” shouted the seventh man. “Why should he get R10 back, when I got only R2? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”

In their rage, the nine men decided to boycott the bar.

The next night only the tenth man showed up for drinks so he sat down and had the beer on his own. But when it came time to pay the bill, he discovered something important. 90% of the beer had gone unsold, and the barman was threatening to return the stock to him in the morning.

And if the situation remained unchanged, then the barman was planning to shut up shop, and the brewery would have to close, and then everyone would be without jobs.

And that is how our economy works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction, but the wealthy also have a vested interest in keeping consumers at the table.

That consumption drives the economy and gives value to the businesses that they own. And the hard truth is: if anyone decides to leave the table, then it’s likely that everyone will lose. And it’s really hard to keep everyone happy.

It’s complicated.’ (End)

EXAMPLE OF PROGRESSIVE FEDERAL AND PROVINCIAL 2017 FOR ALBERTANS

For this blog author, the initial article is based on true stupidity and over simplification of the tax system.  In this blog article, an example is used to explain the Canadian and provincial tax system based on a progressive tax system versus a flat tax system. These calculations are examples only.  Also, final taxes will vary based on personal deductions, other deductions, tax credits and loopholes not included here.

The following information outlines the 2017 progressive tax system for Canadian and Alberta families of two or more using 2011 Stats Canada information on incomes for Quintile 1 to 5.  For the tax calculation, the highest income for Quintile 1 to 4 rounded off was used plus an arbitrarily assigned income of $350,000 for Quintile 5.

CANADIAN DISTRIBUTION OF INCOME (from MoneySense 2015 All Canadian Wealth test (moneysense.ca/save/financial-planning/the-all-canadian-wealth-test-2015/)

 

 

  • Quintile 1 up to $38,754
  • Quintile 2 $38,755 to $61,928
  • Quintile 3 $61,929 to $88,074
  • Quintile 4 $88,075 to $125,000
  • Quintile 5 $125,001 and over

Upper income point of quintiles

  • Quintile 1 $  39,000
  • Quintile 2 $  62,000
  • Quintile 3 $  88,000
  • Quintile 4 $125,000
  • Quintile 5 $350,000 (arbitrarily assigned value)

tax

 

 

ANALYSIS

First, it must be stated that all persons identified in the quintiles will not pay the full tax shown in the table since personal deductions, other deductions and tax credits have not been applied.  Also, the ability to use tax loopholes and credits, (more likely to benefit wealthy the most) have not been applied.  Examples are TFSAs (no tax savings on principal amounts, but savings are realized on tax free investments and interest earned on principal) and RRSPs (reduced taxes on employment income for yearly RRSP amounts, but will pay taxes on withdrawals from RRSP, for example, in retirement when income is likely to be less than when employed).  Combined principal amounts for TFSAs for couples now totals almost $100,000 (tfsa-boondoggle-for-singles-and-low-income-canadians).  It is almost 100% certain that couple earning $39,000 will not be able to contribute to TFSAs and RRSPs.

Also, calculations are based on the combined total income for one or two earners in family of two or more.  Taxation will vary based on income earned by each spouse and tax rules for family income.

It is interesting to note percentage of after tax income without application of any other deductions for Quintile 1 to 4 families of two or more persons averages between 70% and 75%, while percentage of after tax income for the richest Quintile 5 $350,000 arbitrarily assigned income for family of two or more is about 60%. The 60% after tax income, however, will increase substantially with the deductions, and tax avoidance, loopholes and credits that wealthy are able to use.

After tax income with no deductions for family of two or more earning $350,000 will be at least $211,078 or $17,590 per month (as compared to only approximately $2,400 per month for Quintile 1 family of two or more persons).  Families earning $39,000 with equal incomes between the spouses at 2,000 annual worked hours each works out to about $10/hr.

If 2015 old flat tax rate of 10% for Alberta is applied to Quintile 5 person earning $350,000 the total tax would only be $35,000 instead of $43,383.  What a difference a progressive tax makes!  The average person does not understand that the first dollar earned is taxed lower than the last dollar earned in the progressive tax system.  The person earning $350,000 pays the exact same tax on the first $125,000 of pay as the person making only $125,000.  That is what makes progressive taxes fair.

From MoneySense article the top income for unattached individuals for Quintile 1 is $18,717 (as compared to $38,754 for family two or more persons), Quintile 2 $23,356 ($61,928 for family two or more persons), Quintile 3 $36,859 ($88,074 for family two or more persons), Quintile 4 $55,498 ($125,000 for family two or more persons), and Quintile 5 $55,499 and over (over $125,000 for family two or more persons).  Analysis shows incomes of families of two or more are at least double or more to that of unattached individuals.  It is almost 100% certain that unattached individuals in Quintiles 1, 2 and 3 will not be able to save by contributing to TFSAs and RRSPs (unless RRSP is a forced contribution through employer).

Income does not include assets that the upper class and wealthy might have such as paid for $600,000 and up housing, investments, etc.

CONCLUSION

Michael Lewis, author of “The Undoing Project” book, describes how a Nobel Prize-winning theory of the mind altered our perception of reality.   Two Israeli psychologists, Daniel Kahneman and Amos Tversky’s work created the field of behavioral economics which revolutionized thinking of how the human mind works when forced to make judgements in uncertain situations.  An example is outcomes of surgery where there might be a 5% chance of death versus 95% chance of surviving the surgery.  When patients are presented with 95% chance of survival rate rather than 5% death rate, they are more likely to go through with the surgery.  The same judgement should apply to tax system based on beer analogy.

For upper class and wealthy, please don’t ‘cry me a river’.  Wealthy need to look at what they have left after taxation instead of what is being taken from them in taxation.  Only when all the tax loopholes, offshore tax havens, and privileging through tax credits like Tax Free Savings Accounts TFSAs that benefit wealthy the most are eliminated so that there is a level playing field and fairness between poor and wealthy, only then can the wealthy ever complain that they are being taxed unfairly.

The wealth gap between the rich and poor needs to be lessened by increasing the minimum wage to an indexed living wage and eliminating the tax deductions, loopholes and tax credits that benefit the wealthy the most (selective-democratic-socialism).

Regarding the ‘The Tax System Explained in Beer’ analogy, we will take the South African Rand analogy as being the more accurate of the two analogies, thank you very much!

Postscript: For those who wish to read more on the debunking of tax system explained in beer analogy, the following online article and reader comments is a great one – (Reality) Check, Please:  Why the Restaurant Analogy Doesn’t Work (Restaurant-Analogy-Doesnt-Work).

UPDATE OCTOBER 31, 2018 – We are very grateful to a reader who pointed out that an error was made in the calculation of information in the table.  The table has been updated.  The update decreases the tax that is paid in the $350,000 Alberta income category.

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice.)

DECEASED CANADIAN SINGLE SOLDIERS AND 9/11 VICTIMS FINANCIALLY WORTH LESS THAN DECEASED MARRIED SOLDIERS AND 9/11 VICTIMS

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DECEASED CANADIAN SINGLE SOLDIERS AND 9/11 VICTIMS FINANCIALLY WORTH LESS THAN DECEASED MARRIED SOLDIERS AND 9/11 VICTIMS

(These thoughts are purely the blunt, no nonsense personal opinions of the author about financial fairness and discrimination and are not intended to provide personal or financial advice.)

Today is Remembrance Day.  Lest we forget, the story of Cecil Kinross in “The Whole story is a Tragedy” describes the bravery of a Canadian soldier. An excerpt taken from the story follows: (gave-him-a-medal-and-named-a-mountain-after-him-but-this-passchendaele-veterans-story-is-a-tragedy)

‘He volunteered to step forward when a Canadian Battalion was being shredded by German artillery and machine-gun fire.  With just a rifle and bayonet and a bandolier of extra ammunition strung across his chest, he launched a one-man, broad daylight charge across open ground against a German machine-gun nest.  He would kill six Germans, destroy the gun and continue fighting while being seriously wounded in the head and left arm.  He was awarded the Victoria Cross.  Even today, he is remembered for it.  Mt. Kinross  (Jasper, Alberta) is named after him as is Edmonton’s Kinross road.  After returning home he suffered from terrible headaches, likely had PTSD and struggled with alcohol.  He never married.’

Flash forward to 2017.  If Kinross had died from service-related death as outlined below in Death Benefit 2016, and if he was married his spouse and /or children would have received benefit.  As a deceased single soldier, parents would have received nothing and parents would likely have struggled through poverty stricken lives.  Families of deceased single soldiers are deemed to be worth less than spouse and/or children of deceased single soldiers.

We decided to reprint the blog post entered last November 12, 2016.  The additional media links at the end of the November 12, 2016 post have not been reproduced here. These can be reviewed by referring back to November 12, 2016 post. (deceased-canadian-single-soldiers)

ADDENDUM NOVEMBER 11, 2017

As stated in next paragraph it appears nothing has changed for payment of death benefit for single marital status deceased soldiers.

Death Benefit – As of January 1, 2016 (ombudsman-veterans)

The Death Benefit is a lump sum in the amount of $310,378.59 (January 1, 2016 rate) payable to the surviving spouse, common-law partner and/or dependent children in the case of service-related death that occurs within 30 days of a CAF member’s injury or illness. The benefit recognizes the impact the death of a service member has on the functioning of their immediate family, including the permanent loss of guidance, care and companionship.

Budget 2016 announced that the Death Benefit will be increased to $360,000 in 2017. The calculation of the payment will be done in the same manner as the Disability Award, described previously.

 

REPRINT OF NOVEMBER 12, 2016 BLOG POST

This post is about the financial discrimination faced by deceased singles.   Two cases outlined include Canadian single soldiers and deceased single 9/11 victims. The sources of news articles on which the deceased Canadian single soldiers information has been based are included at the end of this post.

FINANCIAL DISCRIMINATION OF DECEASED CANADIAN SINGLE SOLDIERS

Several complaints on what was felt to be financial discrimination against deceased Canadian single soldiers were brought before Canadian federal human-right tribunals. It appears that these complaints have resulted in gross human rights violations based on marital status.  Some of the names of the deceased involved are Cpl. Matthew Dinning, Pte. Braun Scott Woodfield, Pte. William Cushley, Trooper Jack Bouthillier, Trooper March Diab.

The death benefit in question was the $250,000 lump-sum death benefit to be given only to the families of married or common-law soldiers.  Revisions to the Veterans Charter were approved in 2005 so that when a married or common-law Canadian soldier is killed in action, the surviving spouse and children are eligible for a one-time, $250,000 lump-sum to help them with the costs of transitioning to civilian life. The cash is on top of whatever life insurance the deceased has (Supplementary Death Benefit-covers all Canadian Forces members at two years salary which goes to the person whom they designate-and Military Life Insurance which they can purchase through SISIP).

Under the old system, the federal government paid a supplementary death benefit, calculated at two times the member’s annual earnings.  The cash went to the spouse, or another designated beneficiary of the soldier. If there was no beneficiary, the money would go into the estate.

As of 2011 less than about half of the deceased soldiers in Afghanistan have been single.

The issues behind the complaints are outlined here.

  1. VIOLATION OF CANADIAN LAW AND CANADIAN REVENUE AGENCY (CRA) BY CHANGING MARITAL STATUS

The parents of Pte. William Cushley issued a complaint on why they did not receive same compensation as married or common-law deceased soldiers.  The final result of a federal human-rights tribunal rejected the complaint of Lincoln and Laurie Dinning for Cpl. Matthew Dinning because Veterans Affairs abruptly decided to recognize their son’s girlfriend of a couple of months as his common-law spouse, technically making him no longer single even though she had not lived with him for a year. (link to definitions of marital status).  “An eleventh hour offer by the Department to recognize Dinning’s girlfriend as a common-law spouse was no doubt done to try to quash the hopes of other families challenging the government on the discrimination related to this death benefit.” Definitions clearly state couples have to co-habitat for a year before declaring common-law status.

Veterans Affairs clearly violated the law by changing the marital status of the deceased single soldier from single to common-law spouse.

      2. DECEASED MARRIED SOLDIERS RECEIVE $250,000 DEATH PAYOUTS, BUT DECEASED SINGLE SOLDIERS DO NOT

As stated by one of the parents:  “You have four men killed in the same battle, three of them are paid $250,000, (but) William does not qualify because he is single. It doesn’t make any sense to me.”

      3. DATE OF DEATH FELL OUTSIDE DATE OF APPROVAL

Relatives of Pte. Braun Scott Woodfield, who died in a military vehicle accident in November, would be sharing a $250,000 tax-free payment specially authorized by cabinet to compensate for his death while on duty…..But records released under the Access to Information Act indicate Woodfield’s family was excluded from the cabinet order, which gave a total of $1 million to four other families grieving over military deaths. That’s because Canada’s new Veterans Charter, which for the first time provides a non-taxable $250,000 death benefit, was passed by Parliament on May 13, (2005)  last year but didn’t come into effect until April 1 (2006) this year. Deaths that occurred in the interim were not covered by the charter….  His death benefits were then denied because he was single.

       4. DECEASED SINGLE SOLDIERS DO NOT QUALIFY IF THEY DID NOT MEET DEFINITION OF ‘SURVIVOR’

“But Woodfield’s family will not get a red cent because under the Veterans Charter, only “survivors” can receive the $250,000 death benefit. And because survivors are defined only as dependent children, spouses or common-law partners, Woodfield – as a single man with no children – had no “survivors” to receive any cash.

Instead, the cabinet order provided the money to the surviving spouses, common-law partners and children of three men killed in Afghanistan, as well as to the two daughters of Warrant Officer Charles Sheppard, who died in a parachuting accident at Trenton, Ont., on Oct. 3, 2005.”

“Pte. Woodfield is not eligible because he does not have a survivor or any dependent children,” Veterans Affairs spokeswoman Pamela Price confirmed in an interview. Woodfield’s mother said the Veterans Charter policy should be changed to help the next-of-kin of unattached soldIers.

“In a sense, you felt that my son was less of a person, as a single person,”…..

The death benefit under the Veterans Charter is unusual because of its restriction to so-called “survivors,” since single soldiers with no children have long been unconditionally eligible for almost all other death benefits provided by the military.

For example, the Canadian Forces pays for the funerals and burials of all serving members killed on duty, as it did for Woodfield.

National Defence spokesman John Knoll said the Forces also pay supplementary death benefits – two years of salary, tax-free – to the estate of the member or to his or her designated beneficiary. The military will also provide severance pay to the estate or designated beneficiary, seven days’ pay for each year of service.

And any pension entitlements that had been accrued by deceased members go to a designated beneficiary or the estate if there is no spouse, common-law partner or children, he said.”

     5. VETERAN AFFAIRS ARGUES THAT THIS DEATH BENEFIT IS NOT LIFE INSURANCE AND IS SPECIFICALLY TARGETED TO HELP FAMILIES AFTER SOLDIER’S DEATH AS SPOUSE OR PARENT

Veterans Affairs has argued that the death benefit is not life insurance and the payout is specifically targeted at families to help them transition to civilian life. Lawyers for the department, in written submissions, have said the federal government isn’t obliged to pay compensation in every circumstance.

Other comments from news articles:

“Lincoln Dinning, Matthew’s father, said he would never have filed the human rights complaint, which alleged the government discriminated against single soldiers, had there been a spouse in the picture at the outset”.

“Single soldiers can choose to take out life insurance and make payable, for example, to his or her parents or estate. That kind of insurance can only be obtained through the Service Income Security Insurance Plan (SISIP) Long Term Disability, a government-directed insurance program for the Canadian Forces.  But the Royal Canadian Legion, representing 340,000 members across the country, said the one-time death benefit is clearly meant to cover pain and suffering, noneconomic loss, which is covered other benefit packages”.

“Errol Mendes of the University of Ottawa says it’s clearly established in law that discrimination based on marital status violates the Charter of Rights and Freedoms and he wonders why Veterans Affairs still supports the practice.  “There is a compelling case on the part of single soldiers,” Prof. Mendes said yesterday. “Whether or not there is a legal case, there is a huge moral, social, ethical and political reason why the government should be covering this.”

Reader comment-”The stated purpose is to help transition the soldier’s immediate family from a military life to a civilian life, due to the loss of income, housing, support network etc. It is not meant to recognize their sacrifice through a financial payout. That being said, if a single soldier has elderly/infirm parents or siblings that he/she is legally responsible for, the money should be paid out in those instances. And hopefully the member made arrangements beforehand in case this happens (setting up trusts etc.).”

Reader comment-Another aspect that cannot be ignored are these scenarios:  “If a single soldier is gravely injured, and an application is subsequently made on their behalf for the Disability Benefit, and they then die more than 30 days later, then the Disability Benefit would be issued to the estate at a rate of 100% disability.  If a single soldier is killed instantly, then no Death Benefit is issued, period.  A 100% Disability Benefit is exactly the same amount as the Death Benefit, but only one of these scenarios generates a benefit – dependent upon when the veteran dies.  Doesn’t sound quite so equal.  I can see why there are arguments that the Death Benefit should be paid to the Estate, not to the survivor.”

Other documents, dated after the charter’s implementation, showed veterans groups were concerned about the exclusion of single soldiers from the payment, but Veterans Affairs placated them by saying it was prepared to “explore any gaps or omissions” and to “make changes to the (New Veterans Charter) to the extent possible.”

Comments from Veteran Affairs Canada -“Although other family members, such as parents, also suffer from the loss due to the sudden death of the Canadian Forces member, they do not face the same financial impacts as the spouse/common-law partner and/or dependent children of the Canadian Forces member,” Janice Summerby, a spokeswoman for Veterans Affairs Canada, said in an email statement to the Star.

Summerby added that single soldiers can choose to take out life insurance and make payable, for example, to his or her parents or estate. That kind of insurance can only be obtained through the Service Income Security Insurance Plan (SISIP) Long Term Disability, a government-directed insurance program for the Canadian Forces.  But the Royal Canadian Legion, representing 340,000 members across the country, said the one-time death benefit is clearly meant to cover pain and suffering, not economic loss, which is covered other benefit packages.

“It is one of the deficiencies that we identified in the new Veterans’ Charter . . . that it is a discriminatory practice that married members receive a death benefit but single members don’t receive a death benefit. The Legion believes that all Canadian forces members killed (in the line of duty) … be granted a death benefit,” Andrea Siew, of the Royal Canadian Legion in Ottawa, told the Star.

Siew said the death benefit is not about financial compensation for the loss of income, “it is an award payment for the non-economic loss associated with pain and suffering. It is very clear in the legislation it’s about that.”

FINANCIAL DISCRIMINATION OF 9/11 SINGLE VICTIMS

From “What Is the Life of a Single Person Worth?” from ‘Singled Out, How Singles Are Stereotyped, Stigmatized and Ignored, and Still Live Happily Ever After’ by Bella DePaulo, Ph.D., St. Martin’s Griffin, New York, 2006,  page 228 (SingledOutHIGHLIGHTS)

“After the terrorist attacks of September 11, 2001, the U.S. government created a  fund to compensate the families of the victims.  Compensation was calculated separately for each victim, based in part on projected lifetime earnings and other sources of money. In addition, each family was was paid a standard $250,000 for pain and suffering.  The final component was an extra $50,000 for spouses and for each child.  According to these calculations, the lives of single victims are automatically worth less than those of married victims.  The $50,000 that would go to a married victim’s spouse would not go to any living person who cared about the victim who was single.

The Victim Compensation Fund declared in cold, hard numbers that in contemporary American society, the life of a single person is worth less than the life of someone who is married.  That’s only one of the reasons I find it interesting.  The fund also makes another set of values unusually clear.  A relationship with a spouse is considered worthier than any other adult relationship, including even ties to parents or siblings.  Said the mother of one of the 9/11 victims, “When they did this formula, why didn’t they consider the parents?  My daughter-in-law was married for five years.  We had Jonathan for 35 years”

The person in charge of the excruciating task of assigning a dollar value to victims’ lives, attorney Kenneth Feinberg, had second thoughts about the matter after the job was completed.  In the book he wrote about his experiences, he concludes that if Congress ever decides to create such a fund again, all victims should be valued equally”.

CONCLUSION:

From examination of these two cases, it is apparent that even in this era of enlightenment where discrimination is supposed to be recognized and eliminated, financial discrimination of singles is as rampant as it ever was decades ago.

Observations include the following:

  • Financial discrimination of singles continues even when they are deceased.  The financial lives of deceased singles are viewed to be worth less than married or common-law deceased persons.
  • Blatant manipulation of marital status done by Veteran Affairs just to avoid legal ramifications is a violation of the law and human rights of singles.
  • There is a clear legal process to follow in the distribution of financial assets of singles and married or common-law families.  For singles, distribution is determined by wills and estates; for married or common-law families, distribution is determined by spousal and child dependents first, then parents and siblings in accordance with wills, estate and pre-nuptial agreements, so why would Veterans Affairs try to usurp this legal process?
  • In the 9/11 victims article, the following statement is in the eye of the beholder and can be viewed from different angles:  Said the mother of one of the 9/11 victims, “When they did this formula, why didn’t they consider the parents?  My daughter-in-law was married for five years.  We had Jonathan for 35 years.”  First, when children marry, the proper thing for parents to do is to give up their parental rights and allow their children to become their own family units with their own rights, so why should parents feel they are entitled to victim’s benefits over the spouse and children dependents of the victim? Second, as stated above there is a clear legal process for determining who will receive benefits.  Spouses and children take first priority followed by parents and siblings further down if spouse and children are all deceased as determined by law.
  • Kenneth Feinberg, had second thoughts about the matter after the 9/11 job was completed and concluded that if Congress ever decides to create such a fund again, all victims should be valued equally.  (Just a little too late, don’t you think)!
  • It should be very clear how important wills are to prevent possible infighting that can occur over death benefits.
  • All deceased persons deserve the same death benefits regardless of marital status.

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice.)

INCOME SPRINKLING PROMOTES FINANCIAL DISCRIMINATION OF SINGLE MARITAL STATUS ENTREPRENEURS

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INCOME SPRINKLING PROMOTES FINANCIAL DISCRIMINATION OF SINGLE MARITAL STATUS ENTREPRENEURS

(These thoughts are purely the blunt, no nonsense personal opinions of the author about financial fairness and discrimination and are not intended to provide personal or financial advice.)

Opening statement:  Here we go again, yet another financial program that financially discriminates against singles.  Most singles, especially those who are not entrepreneurs, would not be aware that married entrepreneurs with and without children are able to do this type of tax manipulation.  The article “What the new ‘income sprinkling’ rules mean for tax planning” has been reproduced in its entirety to educate the reader on what ‘income sprinkling’ is all about.  “Income Sprinkling’ has been added as an example to Marital Manna Benefits and Marital Privileging section outlined in the feature post of this blog SIX REASONS WHY MARRIED/COUPLED PEOPLE ARE ABLE TO ACHIEVE MORE FINANCIAL POWER (WEALTH) THAN SINGLES (financial-power)

WHAT IS INCOME SPRINKLING?

“What the new ‘income sprinkling’ rules mean for tax planning” by Jamie Golombek (new-income-sprinkling-rules)

Small business owners, including incorporated professionals such as doctors, lawyers, accountants and others, will likely face a higher tax bill in the years ahead as a result of (Liberal) Finance Minister announcement this week targeting several common, and until now, perfectly legal, tax strategies used in conjunction with private corporations.

The strategies under attack can be categorized into three main areas: income sprinkling, earning passive investment income in a corporation and converting a corporation’s ordinary income into tax-preferred capital gains.

Among these changes, it’s the first one — income sprinkling — which is perhaps deemed the most offensive of the three and the one that will likely have the broadest financial impact on small business owners and incorporated professionals.

While there are various legal and government-sanctioned forms of income splitting, the most common one being the splitting of pension income or RRIF withdrawals (after age 65) with a spouse or partner, the Finance Minister chose the term “income sprinkling” rather than income splitting to describe how some families use private corporations to sprinkle income among family members. In a typical example, dividends that would have been received by the primary owner/manager of the private corporation, say, mom or dad, would instead be paid to the spouse, partner or kids of the primary shareholder, who are often in lower tax brackets than the primary owner/manager and thus the family’s total tax bill would be reduced.

This result stems from the fact that Canada taxes us on an individual basis, rather than as a family unit and imposes progressively higher tax rates on each individual, such that the higher your personal income, the higher your rate of tax. Canada also allows each individual a basic personal amount (equal to $11,635 in 2017) which effectively allows every Canadian to receive at least the first $11,635 tax-free.

Private corporations can pay dividends to family members who, if they have no other income, can use their basic personal amounts to shield such income from tax. For example, in Ontario, an individual with no other source of income could receive about $51,000 in eligible dividends without paying a cent of federal or provincial tax. In many corporate structures, it’s typical for the common shares to held by a family trust in which the spouse and the kids of the owner/manager are the beneficiaries and the trustee has discretion as to which beneficiary receives dividends each year and how much each receives.

As the government noted in its discussion document, “The income distributed to the family member may exceed what would have been expected, having regard to the family member’s labour and capital contributions to the business, in arrangements involving arm’s-length investors.”

Of course not all private corporations are engaged in income sprinkling as it typically only provides meaningful benefits when the family member that receives the “sprinkled” income is either in a lower tax bracket than the owner/manager or has tax deductions or credits, including the basic personal amount or tuition carryforwards, which otherwise would go unused.

In addition, the tax savings achieved through an income sprinkling plan must be material enough to justify both the initial and ongoing transaction costs associated with most income sprinkling arrangements, which often involve the setup and maintenance of a discretionary family trust and in some cases, multiple classes of shares.

When it comes to income sprinkling of salary income, the current tax rules are quite strict in that the Income Tax Act only permits “reasonable” amounts to be deducted from the corporation’s income when salary or management fees are paid to employees, including family members. This rule is meant to prevent a parent who owns a corporation from paying his spouse or child an annual salary when he or she doesn’t actually perform any work or provide services to the business.

When it comes to dividends, however, there is no reasonableness test in that anyone who owns share of the corporation may receive dividends. There is, however, a special tax known as the “kiddie tax” which came into place in 1999, to prevent income splitting with minor children (i.e. kids under the age of 18). Prior to this tax, known formally as “tax on split income” (TOSI), it was quite common for private companies to pay tens of thousands of dollars in dividends to toddlers, which would effectively be received tax-free as the kids would use their basic personal amount to shelter this income from tax.

The TOSI regime killed this planning nearly two decades ago by subjecting dividends from private company shares paid to minor kids to top, highest-rate taxation and denying the use of personal tax credits (other than the dividend tax credit) to shelter such amounts.

However, as the government noted, the current TOSI rules do not fully respond to income sprinkling involving adult family members. In its paper, the government took a close look at the age of individuals who reported non-eligible dividends on their tax returns. (Non-eligible dividends are generally dividends paid on private company shares from income eligible for the small business rate.) The government found that in each year reviewed, the amount of non-eligible dividends reported by those aged 18-21 exceeded both the amounts earned by the 22-25 and 26-29 age groups. As the government wrote, “this anomaly in the distribution suggests the presence of dividend sprinkling, because the tax benefits of income sprinkling are higher, on average, when adult children of high-income filers are younger and have lower income.”

As a result, this week the government announced proposed changes, to be effective in 2018, to extend the TOSI to certain adult individuals. Under the proposed new rules, an adult family member will be expected to contribute to the business, either in labour or capital, in order to be exempt from the TOSI on income received. In other words, the amount received by such adult family members must be “reasonable.” There is a stricter test for 18-24 year olds. In a nutshell, if the amount isn’t reasonable, then a top rate of tax will apply, putting an end to current strategy of dividend sprinkling among non-involved family members.

OPINION LETTER SUBMITTED BY AUTHOR TO MAJOR LOCAL NEWSPAPER – NOT PUBLISHED

Tax fairness proposals always stir up hornet nests for tax manipulators.

Fact check:  married or partnered persons with and without children have financial power to gift money to spousal RRSP, loan money to spouse at CRA 1% rate, contribute to and compound RRSP and TFSAs times two and pension split while singles never married or partnered, no kids get nothing comparable.  Plus incorporated married/partnered entrepreneurs can ‘income sprinkle’ to avoid taxes.

Journalists like the one who published “Big government has small business in its sights” malign unions, but incorporated business persons may have spouses who are union employees.  Union employees cannot tax manipulate.

Since singles in their financial circle are basically financially responsible to themselves (no spouse, no children),‘Income sprinkling’ is of likely of little benefit to single marital status entrepreneurs so they will pay more tax.  Tax fairness needs to be ensured regardless of marital status and how income is earned.

COMMENTS

Financial discrimination example of singles before retirement – Income sprinkling as outlined above.  Excerpt from above article states:  ‘The government found that in each year reviewed, the amount of non-eligible dividends reported by those aged 18-21 exceeded both the amounts earned by the 22-25 and 26-29 age groups. As the government wrote, “this anomaly in the distribution suggests the presence of dividend sprinkling, because the tax benefits of income sprinkling are higher, on average, when adult children of high-income filers are younger and have lower income.” ‘

Financial discrimination example of singles after retirement – Various legal and government-sanctioned forms of income splitting, the most common one being the splitting of pension income (family-tax-credits) or RRIF withdrawals (after age 65) with a spouse or partner leave singles (never married, no children and divorced) out of the financial equation.

When governments regardless of political party bring in unfair tax programs, and then later try to eliminate or change them to promote financial fairness, this is usually meant by profound resistance especially by those who benefit most from the programs (most likely wealthy since they benefit most from tax manipulation).

It is also interesting to note the various comments columnists and opinion writers have submitted on income sprinkling issue.  One columnist went so far as to say that this should be taken on as a feminist issue since the spouse, more likely to be female, supports their partner.  This author responded to the columnist by letter stating that if she wants to play the feminist card, then singles would like to play the ‘singlism’ card, since singles likely do not benefit at all from ‘income sprinkling’.

It is the opinion of this author the Finance Minister in this case was actually doing the right thing by levelling the financial playing field for ‘income sprinkling’.  The final outcome of this financial policy is yet to be determined.

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice.)

POOR ALWAYS PLACED AT A DISADVANTAGE

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POOR ALWAYS PLACED

(These thoughts are purely the blunt, no nonsense personal opinions of the author about financial fairness and discrimination and are not intended to provide personal or financial advice.)

The columnist’s opinion letter prompted the author to submit an opinion letter to a major local newspaper which was published.  Due to space and time constraints the last statement of the author’s opinion letter can be interpreted in several ways.  The conclusion discusses these interpretations.

COLUMNIST’S OPINION LETTER PUBLISHED IN MAJOR LOCAL NEWSPAPER

RE: Government hypocritical on minimum wage, Oct. 2. (hypocrisy)

‘What sort of person could possibly begrudge someone getting a raise when they only make 12 lousy bucks an hour?

Probably someone who’s been hanging onto the coattails of the deep thinkers over at the Fraser Institute, or maybe ingratiating themselves with those tall foreheads inhabiting the C.D. Howe playpen. Such folks talk as though the blood drained from their thin veins a long time since.

Nope, here in Calgary, on this glorious fall morning, some fine people will be starting work with an extra spring in their collective step, knowing a nice $1.40-an-hour raise is coming, with the minimum wage jacked up to $13.60, alongside the promise it’ll hit $15 in another year.

I wish them well and, honestly, a veritable pox on those who’d deny them otherwise.

Of course, some small-business owners might decide they can’t afford this new, higher wage, so instead, they’ll work extra unpaid shifts themselves and maybe cut some poor soul from the payroll altogether. No blame should be levied there, either. Walk a mile in those shoes.

Oh, then there are those big, international corporations – the McDonald’s and Amazons of this increasingly global and heartless world. The more the cost of labour goes up, then the more bottom-line reasons to invest in robots and automation. Such reactions are inevitable – on a worldwide scale, it’s why we don’t produce much of our electronic gadgets, clothes or food because someone, somewhere, does it much cheaper, and the price we’re willing to pay supersedes patriotism everytime and everywhere.

Countless economic studies – conducted, of course, by those who’ve never seen a minimum wage pay packet since mommy and daddy shelled out for that first go-round of college – have never successfully nailed the effect of such ordained raises on subsequent employment. Usually, the conclusions mirror the political viewpoint of the group paying for the study.

Let’s face it: any relevant data here in Calgary to be gleaned in the upcoming 12 months after this latest increase would be washed away in the wake of a jump to $70 in the price of a barrel of oil. There are too many factors involved, so politicians merrily fill the gap…..

…..Politicians love spouting one-sided rhetoric. Take Alberta’s NDP Labour Minister who’s pushing this minimum wage strategy.

“Through talking to economists, business people, low wage workers and other stakeholders, we’ve come to the decision all hard-working Albertans deserve enough to support themselves.”

Hypocrite is what I say to her and all the rest of the dreary clan on both the provincial and federal stage. Because if $13 bucks an hour is not a living wage – and I wouldn’t argue otherwise – then why do these people steal from those poor souls making such a pittance?

They call it taxation. On the federal level, you start paying tax at about $12,000 a year. So, assuming you make a paltry $13 an hour and work 40 each week, your annual income is about $27,000 a year. Oh yes, Ottawa wants its sweet pound of that sad flesh.

Now the NDP Labour Minister and her saintly crew aren’t quite as grasping, to be fair, but once $15 an hour is reached, then the yearly sum will be over $30,000 and a third will be subject to provincial income tax.

So what sort of person gets up on a platform with flunkies to the right and hangers-on to the left and proceeds to lecture everyone about how the lower paid need a living wage and then takes part of such an increase and pockets it themselves? After all, where does a politician’s salary come from if not from tax revenue?

What sort of person? A politician, that’s who.’

BLOG AUTHOR’S OPINION LETTER PUBLISHED IN A MAJOR LOCAL NEWSPAPER

The columnist calls the NDP Labour Minister hypocritical for pushing the minimum wage strategy.  He states government through taxation steal from those poor souls making such a pittance.

Fact check:  when the almighty Alberta Conservatives (financial-discrimination-based-on-minimum-wage-controversy) brought in the flat income tax, they raised the provincial tax from 8% to 10% for the lowest income level.  The poor never had an Alberta Advantage.

Fact check:  those with low lifetime income will have a pittance of CPP pension retirement pillar (canada-pension-plan) because CPP contributions are based on wage levels.

Politicians, corporations and the wealthy always win because they pull the financial purse strings.

CONCLUSION

Because of time and space constraints the last statement  ‘Politicians, corporations and the wealthy always win because they pull the financial purse strings’ would likely leave the reader thinking this blog author was agreeing with the columnist regarding taxation, minimum wage, and NDP hypocrisy.  The columnist fails to mention the Alberta NDP also replaced the Conservative Party flat tax with a progressive tax system while increasing the minimum wage.

It is the opinion of this author that the Alberta Conservative Party when implementing the flat tax placed low income persons at a financial disadvantage while benefitting the wealthy more.  The Alberta NDP has, in fact, done the right thing by replacing the 10% flat tax with a progressive tax and at the same time increasing the minimum wage incrementally to $15 per hour.  The poor will receive an increase in income (impact-on-cpp-enhancements) at same time the wealthy will pay more tax.  By increasing the minimum wage for the poor and tax for the wealthy, the unfair financial spread between the two groups is narrowed.

ALBERTA PROGRESSIVE TAX  2017 IMPLEMENTED BY ALBERTA NDP PARTY

  • First $126,625 10%
  • >$126,625 to $151,950 12%
  • >$151,950 to $202,600 13%
  • >$202,600 up to $303,900 14%
  • >$303,900 15%

CANADIAN FEDERAL PROGRESSIVE TAX 2017

  • 15% on the first $45,916 of taxable income, +
  • 20.5% on the next $45,915 of taxable income (on the portion of taxable income over $45,916 up to $91,831), +
  • 26% on the next $50,522 of taxable income (on the portion of taxable income over $91,831 up to $142,353), +
  • 29% on the next $60,447 of taxable income (on the portion of taxable income over $142,353 up to $202,800), +
  • 33% of taxable income over $202,800

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice.)

HOUSING ALWAYS A BIGGER LOSS FOR THE POOR

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HOUSING ALWAYS A BIGGER LOSS FOR THE POOR

(These thoughts are purely the blunt, no nonsense personal opinions of the author about financial fairness and discrimination and are not intended to provide personal or financial advice.)

(This blog post addresses how hypocritical and unfair housing is at the expense of the poor and to the benefit of the wealthy.  Midfield Park and the British apartment fire are two examples used here.

Midfield Park is a 48 year old mobile home park with crumbling sewer infrastructure.  As of August 2, 2014, the park had 306 residents in total, of which 104 were seniors and 7 were veterans.  The plan to close the park has been ongoing for more than 10 years. Initially plans included relocation and building a new park, but  plans for a new park were not realized.  Many residents did upgrades to their properties over the years which $10,000 doesn’t even begin to cover.  By the way, residents didn’t just include families, they included families and individuals (singles).

Many opinion letters were received from readers reiterating how poor always lose out.  Also, generosity has been shown to immigrants, refugees and illegal asylum arrivals to Canada.  Same dignity and respect needs to be shown to long time residents of Midfield Park who have paid their taxes, raised their families while taking care of their properties.

The third example is about DIY/Renovation/Real Estate TV programs – added Oct. 1, 2017.)

MIDFIELD PARK

MIDFIELD PARK mess would never happen to  the wealthy-handling of the Midfield Park a case of utter hypocrisy. Don Braid, Sept. 27, 2017 Calgary Herald (braid).  (Reproduced here in shortened format).

The Midfield  Park evictions are starting to look like trailer-park cleansing.  These people – 183 families – are being treated very differently than well-to-do folks who find themselves in the way of city plans and projects.

The Midfield families get $10,000 for agreeing to ship out, plus up to $10,000 in moving expenses.  There’s no compensation for lost value in mobile homes or other assets.

City council basically concludes that the family residences of these people are worthless.

The city provides counselling and moving assistance.  A lot of effort has gone into it.

But the compensation is an insult to low-income people who already struggle.  The city wouldn’t dare do this to an established middle-class neighbourhood, no matter how awful the sewer pipes.

About 150 families have already moved on.  It would be ironic if after all this grief – three years of it – the courts conclude that the city had no right to evict them in the first place.

This week a judge suspended the final closing, set for Sept. 30, until a hearing set for Nov. 22.

The delay until after the Oct. 16 (city) election should not stop Midfield Park from being a powerful election issue.

Here’s a question for every candidate – should the city cheap out on these victims because they live in, say, Mount Royal or Mayfair?

A case from 2006-07 shows the utter hypocrisy of what’s going on in Midfield Park.

The city was building the Elbow Drive-Glenmore Trail interchange, at the time a hugely expensive mega project valued at $110 million.

Land had to be trimmed from the north side of Glenmore adjacent to Elbow Drive…..The project would eat away at the buffer between Glenmore and affluent neighbourhoods such as Bel Aire and Mayfair.

From this point, please note both the similarities between this situation and Midfield Park.

The plans were suddenly changed for the Elbow-Glenmore interchange.  The project would infringe more closely on homes than previously expected.  This infuriated residents who decided to stay based on the original design.

Midfield Park plans shifted, too — much more radically.  The residents were first promised  a complete replacement homestead, and then the city cancelled it.

The Bel-Aire and Mayfair homes were still perfectly viable.  There was no need to expropriate or evict.

What the city did next astonishes me to  this day.

Councillors approved the borrowing of $13 million to buy homes at market value, with the hope of selling them later at a profit.

They did this even though a couple of residents were still able to sell homes for nearly $1 million, because the market was soaring at the  time

Effectively, the residents were insured against big losses even though the city had no obligation to help them.  Bel-Aire and Mayfair are lovely neighbourhoods to this day.

Midfield Park, by extreme contrast, will cease to exist.

And yet, the compensation is pitiful.  No family can recreate a similar home life in a new place for $20,000.

The city has offered nothing beyond the bare minimum that might stand up in court.  It certainly hasn’t borrowed money to buy mobile homes at fair value

The city insists that Midfield has to close because of decrepit utilities…..The mayor points out the long notice given to residents and the city’s many efforts to relocate people to “a safe, decent place to live”.  

All that may be so.  But in your mind, please move this scene to, say, iconic Prospect Avenue  in Mount Royal.

The city suddenly says to residents, “darn, your sewer pipes  are going to explode so we have to shut down the whole street forever”.

“You’ll have to move, but we’ve got a nice package for you – $10,000 cash, and another $10,000 in moving expenses.”

Unimaginable?  Of course.

But this is no fantasy in Midfield Park, where  the full weight of city government falls on people without wealth or influence.  It’s a true civic shame.

LONDON, ENGLAND APARTMENT FIRE

(The comments of a British politician says it all about the London apartment fire tragedy. This apartment was in midst of some of  the wealthiest residents of London).

Labour Shadow Chancellor John McDonald said the Grenfell victims were the result of politics.

“The decision not to build homes and to view housing as only for financial speculation rather than for meeting a basic human need made by politicians over decades murdered these families”.  (From The Associated Press, with files from Postmedia News).

DIY/RENOVATION/REAL ESTATE TV PROGRAMS

For all the Canadian and American DIY, renovation and real estate programs on television, it is interesting how most of them have primarily married or partnered participants.  Singles participants are in the minority.  Why is that?  Is it possibly because singles don’t have the finances do the DIY, renovations and buy the real estate at same level as married or partnered participants?

It is also interesting how Canadian and American programs require single marital status participants to have another person by their side in the programs.  Singles get along very well by being independent, taking care of themselves and yet these programs insist on having another person attached as an appendage to the single participant. Why is that?  Is it because singles are thought to be less interesting or unable to carry a conversation?

Two British programs that are a breath of fresh air are “The House that £100K built” and “The £100K house:  Tricks of the Trade”.  These programs actually have single marital status participants without a second person by their side and many the participants don’t have a whole lot of money for their renovations, some are as low as £7,000.

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice.)

RESPONSE TO CONSERVATIVE, PROGRESSIVE THOUGHT OPINION LETTERS

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RESPONSE TO CONSERVATIVE, PROGRESSIVE THOUGHT OPINION LETTERS

(These thoughts are purely the blunt, no nonsense personal opinions of the author about financial fairness and discrimination and are not intended to provide personal or financial advice.)

The following post is in reply to two response letters to first August 2, 2017 (why-conservatives-and-progressives-think-the-way-they-think) letter published in a local newspaper .  The two response letters appear at the end of this blog post.  This reply letter was published in local newspaper in abbreviated format on August 16, 2017.

BLOG AUTHOR’S RESPONSE LETTER-August 16,2017

Two response letters on blog author’s August 2, 2017 letter on conservative versus progressive thought only perpetuates bafflegab where imbalance between the two results in wealthy conservative types or anarchists ruling the universe.

One example of inequality of Canadian values is housing.  One condo development in housing complex includes 1 bed, 1 bath, 1 patio 552 sq. ft. micro-condo with starting price of $299,900 or $543 per sq. ft.  Three bed, 2.5 bath, 2 patios, 2 and 3 story 1830 sq. ft. condos in same complex are priced from $649,900 to $749,900 or $355 to $409 per sq. ft.  Ultra-deluxe model master bedroom suite covers entire third 600 sq. ft. floor. Third bedroom is bigger than total square footage of $299,900 condo and sells for $150 to $200 less per square foot for two-thirds more space.  Where is the critical thinking of ripple effects where owners (most likely to be singles) of micro-condos have to proportionately pay more house taxes, education taxes, mortgage interest, insurance and real estate fees on less house and likely less take home pay for their biggest lifetime expense?

Vancouver 100-square-foot apartments rent for $570 a month (again most likely to be occupied by singles).  Renters in the 50 units share 11 bathrooms and laundry facilities over the four floors (approximately 12 units and 3 bathrooms per floor)..

Which of you conservatives who spout family values as a personal issue believes your daughter should go traipsing outside of her apartment to use bathroom in middle of the night?  Which of you believes it is humane to stick anyone into a 100 square foot or smaller units (90 square foot units in Vancouver) plus charge excessive rents?   Who makes the decisions behind loan-shark or pay day loan type pricing where financial targeting of the most vulnerable occurs?  It is private enterprise, land developers and cities (government) that make these decisions, not unions.  Where does conservative bafflegab of neighbor helping neighbor, personal discipline, caring, responsibility and respect as stated in one of the letters fit into these decisions?

Free market enterprise and private businesses under the guise of ‘it is what the market can bear’ purposefully ‘rob’ from the poor to pay themselves and to ensure Wall Street ideology is maintained, used and controlled by lobbyists and wealthy who benefit most from Wall Street.  The act of making disadvantaged pay more for less housing and reducing apartments to the size of jail cells (as just one example) (empty-house-speculator-syndrome) has now normalized these scenarios to where it becomes acceptable to do this.  It becomes acceptable to first make singles and poor families pay more and then to (or at same time) offer them charity when there is nothing left for private enterprise to financially extract from them. The charity logic offered in one of the letters completely turns upside down the financial principles where everyone should be able to live on their incomes first and then charity kicks when these incomes fail.

Families (parents), governments, society, corporations, businesses to date have failed to provide support and responsibility that is needed to ensure all Canadian citizens are able to financially take care of themselves without financial parental aid, inheritances of wealthy parents and without bias of gender, race, marital status or income level.  Many Canadians are fed up with the infighting of politicians and the Trumpian corporate and family greed of the wealthy where wealthy always pay less and get more and never pay their fair share.

There are only so many words one can submit for opinion letters so there was no space to mention moderate or balanced positions.  The original newspaper letter was expanded in blog post by stating:  “It also should be said that extremes on either side whether conservative or progressive can have dire consequences.  Far right conservatism can lead to authoritarian governance and far left progressiveness can lead to communism type governance where freedoms are taken away under guise of all persons are equal.  It also is wrong for governments to hand out tax credits without looking at assets and wealth so that wealthy get tax credits or financial loopholes they don’t need (tax free savings accounts with no limits, OAS Clawbacks that don’t work, and pension income splitting implemented by the Conservatives and perpetuated by the Liberals selective-democratic-socialism).  It is all about balance!”  Where is the balance?

You want me to get to know you as a conservative.  How about getting to know me as a person without making me pay more while getting less?

(end of blog post)

 

READER LETTER #1-August 9, 2017

This is written in response to August 2 letter.  Initially I was with the contributor about how conservatives tend to lean towards the stern father archetype and progressives towards the nurturing mother archetype.  But almost right away the writer does not lay out the positions and instead appeals to emotion as opposed to the intellect.

Conservatives want structure and order so they tend to be wary of rapid change and prefer it to happen slowly.  Progressives are more creative and prefer rapid change as a lack of change causes them to fear society is stagnating.  The extreme of these positions is totalitarianism and anarchy respectively, so in a healthy democracy it is not one or the other, but a combination of the two.

Yet the writer does not make this point and instead goes on about how compassionate progressives are, but you have to look at the words carefully.  Using the government to affect change is not compassionate, you are merely using the cudgel of the state to force people to form to your ideology.  There is no agreement no consensus, merely coercion.

At the end of the day, you have to ask what is the role of the government?  Are they there to  provide a framework to engage in mutual cooperation with their fellow human being or is the government there to regulate the lives of their subjects?

READER LETTER #2-August 9, 2017

The writer of August 2 letter has no idea how conservatives think.  Nearly everything you expound in your letter (including from Professor George Lakoff) is pure drivel. Perhaps you should take some time to really understand what conservatives hold to. Here is just a few examples of what conservatives believe in:

Wealth is created through personal initiative, ingenuity, risk taking and sacrifice, not governments.  In fact almost of of these attributes are either absent in government or discouraged (particularly in public service unions).

Great strides in most facets of our society, industry, medicine, technology and science have not come as a result of government initiatives but individual and private pursuits. Think Microsoft, resource development, telecommunications, transportation, agriculture and the internet.

Conservatives believe the free enterprise marketplace promotes diversity, rewards achievement and hard work and fosters the widest choice of ideas.  On the other hand big government represents monopoly, increasing regulations, and the narrowing of ideas and choice.  It often disparages success in private life and business and its very mantra is to force compliance and uniformity.

Conservatives consider big government as wasteful and often corrupt since career politicians have little regard or understanding of the hard work and sacrifice necessary to create wealth and then seek to confiscate and distribute more of it to get personal credit, secure votes and retain power.  Conservatives believe when they build something through hard work, sacrifice and ingenuity, it not only helps their family but the community as well through jobs, taxes and other contributions.  Conservatives know that fair pay retains valuable employees, but for a business to remain viable this has to be balanced with maintaining competitive prices and services to the public.

Conservatives believe true charity and caring towards others is a personal  issue. Unless it comes from the heart and is voluntary it is not genuine.  Using government to take more from some and create entitlements has nothing to  do with empathy, caring or being charitable.  Bureaucracies are incapable of caring.  Genuine charity and and caring only happens with neighbor helping neighbor directly person to person or collectively through voluntary charities and service organizations.  Conservatives understand that government safety nets are needed at critical times, but when they become entrenched and permanent they lead to dependency and undermines personal initiative and self-fulfillment, and so often politicians cannot resist the temptation to use such programs to garner more power, control and votes.

Conservatives believe values are taught in the family not through government programs or policies.  Personal discipline, caring, responsibility and respect must start in the home.  Conservatives do not believe that society’s moral values and conscience derives from government and therefore social engineering or social agendas should not be imposed on anyone by the government.

Please forget your perceived misguided views of conservatives and get to know one.

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice.)

WHY CONSERVATIVES AND PROGRESSIVES THINK THE WAY THEY THINK

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WHY CONSERVATIVES AND PROGRESSIVES THINK THE WAY THEY THINK

(These thoughts are purely the blunt, no nonsense personal opinions of the author about financial fairness and discrimination and are not intended to provide personal or financial advice).

The following blog post is based on George Lakoff’s research on moral politics.  It is impossible to outline all of his findings here, so it is worthwhile to read more of his research for a fuller picture of his findings.  The words in this blog post are primarily taken from the two source materials.  Words in italics are those of the blog author.   (This blog post was published in a local  newspaper in 600 word abbreviated format as submissions to newspaper are restricted to a certain number of words).  Updated August 9, 2017.

Why conservatives and progressives think the way they think

Thank goodness for local newspaper opinion letters of past few weeks highlighting why Conservatives message and Unite the Right in Alberta are failures for social democracy!

To understand conservatives and progressives George Lakoff, retired Professor of Cognitive Science and Linguistics, in ‘Understanding Trump’ (understanding-trump) and ‘Your brain on Trump’ by Jennie Josephson (transcript-george-lakoff) states “politics needs to be understood metaphorically in family terms since we are all first governed by our families and so we grow up understanding governing institutions in terms of family governance.   Family defines the self-definitions of people and people don’t vote against their self-definition.   Based on life and family circumstances neural circuitry in the brain follows two common forms of family life.  One is ‘strict father family’ (conservative) and the other ‘nurturant parent family’ (progressive).  All politics is moral.  Voters vote their moral values.  To vote against their moral values means rejection of self.

‘Strict father’ brain circuitry believes authority is justified by morality hierarchy in which those who have traditionally dominated should dominate, for example, rich above poor (increasing corporate/family wealth with no increase in minimum wage), Western Culture above other cultures, men above women, white above non whites, Christians above non Christians, straights above gays, corporate outsourcing or privatization for the sake of profit above unions, etc.  In conservative politics poor are seen as lazy and undeserving, while rich deserve their wealth (as evidenced by almost zero affordable housing during forty year Alberta Conservative oil boom reign sung to the tune of it is what the market can bear mentality). Responsibility is taken to be personal responsibility, not social responsibility.

Poor conservatives vote against their material interests, because they’re voting for their worldview. And the reason for it is that their moral worldview defines who they are. They are not going to vote against their own definition of who they are.”

Another type of dominance to add to the list is married above singles.  Singles are often invisible in the family definition and excluded in financial formulas (what-is-the-point)

“Conservatives see taxation, not as investment in publicly provided resources for all citizens but, as government taking their earnings (their private property) and giving it through government programs to those who don’t  deserve it.  They always want to cut taxes and cut public resources.  They fail to recognize that many public resources begin with business and that they themselves benefit from tax dollars used for public good in public roads, schools, hospitals, police, courts for business cases, the criminal justice system, sewers, water, electricity, Wall Street which is utilized most by the wealthy, etc.

They want to go back to ‘old time’ values as in “the Alberta I grew up in” and “Make America great again”.  They fail to realize it is impossible to go back, for example, to oil boom days when Britain and France and auto manufacturers are moving towards electric only cars.

Re conservative and progressive brain circuitry, Lakoff states “there is no middle in politics, but most people are not just all one or the other.  They are what he calls bi-conceptual or moderates.  Most conservatives have some progressive views and, likewise, most progressives have some conservative views.  And there are people who are both conservative and progressive, but one view is usually stronger than the other. How can they both reside in the same brain at the same time?  Both are characterized in the brain by neural circuitry.  They are linked by a commonplace circuit:  mutual inhibition.  When one is turned on the other is turned off; when one is strengthened, the other is weakened.  The more conservative views (Trump) are discussed in the media, the more they are activated and the stronger they get; both in the minds of hardcore conservatives and in the minds of progressive conservatives.”  (The three political parties in Canada – progressive conservative, liberal and new democrat also changes the political picture.)

“Far right conservative politicians may want to turn on the minor view in the other person and USA conservatives have figured out how to do this.  In fact, they set up leadership sessions to train leaders who want to be conservative to think and talk conservative.” What is really scary is that Lakoff says a fact that is set in the neural circuitry of the brain can be changed in less than a tenth of second.  Trump as a perfect salesman has learned how he can take the mind off of important facts.

Lakoff states that “conservative and progressive views often determine which college they are likely to attend.  Conservatives are likely to take business courses which means they will take marketing courses which teach them how to maximize marketing.  There’s a good chance they will study cognitive science, that is, how people really think and how to market things by advertising. So they know people think using frames and metaphors and narratives and images and emotions and so on. Progressives interested in politics are more likely to take political science, law, public policy, economic theory, not business, and therefore, they learn a different way of thinking.  They likely are not going to study either cognitive science or neuroscience.  Once a worldview is established and become fixed in a  lot of very complex circuits in the brain, the worldview becomes natural and automatic.”  (One professor after reading Lakoff’s research has added a cognitive science course to the curriculum).

According to Lakoff, “research has shown conservatives tend to reason with direct causation while progressives have easier time reasoning with systemic causation.  Examples of direct causation are Trump’s ‘immigrants are flooding in from Mexico so build a wall’ or cure for gun violence is to have a gun ready to directly shoot the shooter.  Those who think climate change is a hoax likely base this on direct causation.  Systemic causation in global warming explains why global warming over the Pacific can produce huge snowstorms in Washington DC:  masses of highly energized water molecules evaporate over the Pacific, blow to the Northeast and over the North Pole and come down in winter over the East coast and parts of the Midwest as masses of snow.  Systemic causation has chains of direct causes, interacting causes, feedback loops, and probabilistic causes, often combined.   Direct causation is easy to understand, and appears to represented in the grammars of all languages around the world.  Systemic causation is more complex and is not represented in the grammar of any language.  It just has to be learned”.

How do conservatives get their message across?

How do far right Conservatives get their message across?  Lakoff gives ten examples of unconscious brain mechanisms (98 per cent of thought is unconscious).  Some examples are repetition (we are going to win, win, win so much).  Then there is framing like ‘Crooked Hillary’, and repeating well-known examples over and over again like shootings by Muslims, Africans-Americans and Latinos.  In his tweets, salesman Trump uses preemptive framing, diversion or deflection, attack the messenger and trial balloons (test public reaction to nuclear arms escalation).

Lakoff states that even if Trump had lost the election, he will have changed the brains of millions of Americans, with future consequences.  This is why it is important that people know the mechanisms used to transmit Big Lies and to stick them into people’s brains without their awareness.  It is a form of mind control.

How to fight far right conservative ideology

So, how can we fight far right conservative ideology?  As stated by Lakoff responsibility rests with ordinary citizens recognizing unconscious brain mechanisms used to spread their message.  Then, recognize that it does not help to repeat false conservative claims and rebut them with facts.  Instead, go positive.  Use positive truthful framing in terms of public good to undermine claims to the contrary.  Use facts to support positively-framed truth with repetition.  Say it over and over again.   The best resistance is positive persistence.  Talk about the public, the people, public servants and good government.  And take back freedom.  Public resources provide for freedom in private enterprise and in private life.

Don’t go negative.  Keep out of nasty exchanges and attacks.  One can speak powerfully without shouting.

Rebuttal needs to start with values, not policies and facts and numbers. PROGRESSIVES ARE THE MAJORITY (in USA) so let’s make our values clear. Progressive thought is built on empathy, on citizens caring about other citizens and working through government to provide public resources for all, both businesses and individuals.  Values come first, facts and policies follow in the service of values.  Facts and policies matter, but they always support values”.  (The Democrats lost the election to Trump because their message was wrong).

From George Lakoff’s ‘Ten Points for Democracy Activists’ (condensed) (ten)

  • Understand the basic issues (see online: ‘a minority president why the polls failed and what the majority can do’)
  • Know the difference between framing and propaganda:  frames are mental structures in thought; every thought uses frames.  Frames, in themselves, are unavoidable and neutral.  Honest framing is the use of frames you believe in and are truthful.
  • Hold conservatives accountable (focus on Republican actions-minimize publicizing Trump – his image, his name, his tweets)
  • Focus attention on substance, not sideshows:  positively and strongly reframe Trump’s preemptive framing 
  • Focus on democracy and freedom (in government by, for and of the people, there is, or should be, no distinction between the public and government.  Government’s focus should be on empathy, transparency and freedom and opportunity)
  • Be careful not to spread fake news
  • Understand the brain’s politics:  All ideas are physical, embodied in neural circuitry.  The more the circuitry is activated, the stronger the circuitry gets and the more deeply the ideas are held. (Use real facts to filter out alternative facts).
  • Remember progressives are a powerful majority
  • Be positive:  frame all issues from a progressive moral viewpoint.  Take the viewpoint of the public good, of the impoverished and the weak, and of preservation
  • Join the Citizens’ Communication Network

Conclusion

Whether or not readers agree with Lakoff’s reasoning for conservative versus progressive differences is in the eye of the beholder.  However, it behooves all of us to fight dangerous Big Lies leading to authoritarian conservative governance.

This is only a small insight into what George Lakoff has to say about moral politics.  It also should be said that extremes on either side whether conservative or progressive can have dire consequences.  Far right conservatism can lead to authoritarian governance and far left progressiveness can lead to communism type governance where freedoms are taken away under guise of all persons are equal.  It also is wrong for governments to hand out numerous tax credits without looking at assets and wealth so that wealthy get tax credits and financial loopholes they don’t need.  It is all about balance!

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice).

‘EMPTY HOUSE SPECULATOR’ SYNDROME EQUALS THEFT AND UNETHICAL INVESTING

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‘EMPTY HOUSE SPECULATOR’ SYNDROME EQUALS THEFT AND UNETHICAL INVESTING

(These thoughts are purely the blunt, no nonsense personal opinions of the author about financial fairness and discrimination and are not intended to provide personal or financial advice.) Post updated June 28, 2017.

Garry Marr’s Financial Post May 8, 2017 article “Spectre of empty houses haunts Canada’s two most expensive housing markets” (expensive) states that in Toronto ‘some believe vacant homes exist on a widespread basis, bought up by a stream of investors so consumed by speculation – or just a safe place to park their money – that they can’t even bother to rent out their properties in markets where the going rate can easily top $3 per square foot…..data seems to indicate there were as ‘many as 66,000 vacant units in Toronto in 2016 equivalent to 5.6 per cent of the city’s total stock of 1.2 million private dwelling units’.  If one calculates this based on a family of four one could guess that about 16,500 families are missing out on Toronto housing.  But wait, the article goes on to say that of the empty homes, 90 per cent are condos or apartments. If condos and apartments are more likely to be bought/rented by singles and poor families, then this would mean singles and poor families are more likely to be hurt by the empty units and Toronto housing crises.

Matt Levin’s Los Angeles Daily News May 13, 2017  ‘Amid state housing crisis, why 2 out of 5 millennials still live at home’ (millennials) article states ‘State lawmakers have introduced more than 130 bills this legislative session to try to solve California’s housing affordability crisis, proposing everything from 150 square-foot apartments to a $3 billion affordable housing bond’.  ‘Nearly a decade removed from the depths of the Great Recession, a staggering 38 percent of California’s 18 to 34-year-olds still live with their parents, according to U.S. Census data. That’s roughly 3.6 million people stuck at home.  If “unlaunched” California millennials formed their own state, they would be entitled to more electoral votes than Connecticut, Iowa or Utah.  If they formed their own city, it would be the third largest in the country’.  California’s population is slightly larger than Canada’s population.

‘Huge demand for tiny rental units in Vancouver’, by Bruce Constatineau in 2014 (rental) talks about  a 100-square-foot unit for $570 a month and there’s a waiting list of people wanting to rent other units when they become available.  In another development there are units as small as 90 square feet where each unit contains a tiny sink and fridge (no cooking facilities and windows?).. Renters in the 50 units share 11 bathrooms, and there are laundry facilities on each of the four floors.  Apparently  the mini-sized apartments attract a wide range of renters — from ages 19 to 56 — who want to live on their own with a downtown Vancouver address.  Budget-minded renters…..can find similar-sized or even smaller cubbyholes downtown for anywhere between $400 and $600 a month.  It is further stated than In order to make them affordable, they need to be very small, condensed units with shared washrooms. That’s just a fact of life.  Really?  The pictures of these units speak a thousand words.

Edmonton, Alberta is also considering construction of 100 square foot units.

Empty house speculator syndrome is equivalent to unethical investing and theft since the empty units have been taken off the market and are not available for occupancy.  Ethical investing excludes chocolate companies that use child labor. Children are taught it is wrong to ‘take candy from babies’, shoplifters are jailed for minor thefts and yet it appears to be okay for speculators to ‘steal’ housing all within legal limits of the law.  The present housing market is based on greed.  Greed begets greed and greed trumps family values.  In housing singles are worth less than other members of the family unit.  The bar has now been reset to a new low where it is okay for them to live in spaces equivalent in size to two jail cells (average jail cell is 45 square feet and provides ‘free’ accommodation and meals, but you can’t leave).

The complete disregard of the housing crisis is heightened by Dr. Ben Carson, head of the Department of Housing and Urban Development USA, who states poverty is a “state of mind” and Trumpian politics which rob the poor to pay the rich.  Liberals and Conservatives in Canada are no different.  The housing crisis is not a “state of mind”, but rather has been brought on by inadequate rules and regulations on housing, failure to increase the minimum wage to a living wage and the upper middle classes and wealthy paying less and getting more for housing and tax loopholes.

Housing is a basic human right as determined internationally in the “Universal International Declaration of Human Rights” and “International Covenant on Economic, Social and Cultural Rights” and is one of the principles of Maslow’s Hierarchy of need. In Canada there appears to be no shame in robbing singles, poor families and indigenous people of their housing.  Housing investors, politicians and families need to take a look in the mirror and reset their moral and ethical compasses to ‘true North’ re housing crisis.

LESSONS THAT SHOULD/COULD BE LEARNED

Where are the parents of millennials?  How can they allow the housing crisis and their children to be housed in 90 square foot units and smaller?  Where are the family values for housing?

Where are the governments, politicians and city counsels that have allowed the housing crisis to take over and last so long?  Where are the rules and regulations to prevent the building of ridiculously small units with price gouging rents?

Why do singles, who are more likely to live in small spaces, always have to pay more per square foot, sometimes outrageously so ($570 for 100 square foot unit)?  The upside-down pricing of housing (affordable-housing) where the smaller the space, the higher the price is per square foot needs to stop.  Doubling the price on rent equals pure greed and unethical investing.  Why do the upper middle class and wealthy pay so much less per square foot for their housing?  The estimate for the amount of house taxes, etc. that is collected by not making the wealthy pay their fair share per square foot must be astounding.

How do occupants of these small spaces learn life lessons, such as cooking for themselves, buying food and managing finances?

The minimum wage needs to be raised to an indexed living wage (cause-and-effect-of-financial-policies).  Building affordable housing will not solve the problem if the minimum wage is not raised.

Humane principles-there are many humane associations and principles related to animals, so where are the humane principles for humans re housing – 100 sq. ft. at $570 rent is not humane.

Where are the rules and regulations on how small a space can be developed, such as a minimum of 350 square feet, so at least there can be a bathroom and cooking facilities within the unit?  Surely, there must be point where it is is not financially feasible for developers to develop small units with minimum square footage in relation to the cost of building the unit and also provides dignity to occupants of these units.

Alberta Health Minimum Housing and Health Standards (Housing-Minimum) – the following condensed excerpt provides information on some Alberta standards for housing.

Space for Sleeping purposes (overcrowding): The owner of a housing premises shall not permit it to become or remain overcrowded. (a) A housing premises shall be deemed to be overcrowded if: (i) a bedroom in it has less than 3m2 (32ft2)of total floor area and 5.6m3 (197ft3) of air space for each adult sleeping in the bedroom, (ii) in the case of a dormitory, the sleeping area in the dormitory has less than 4.6m2 (49.5ft2) of floor space and 8.5 m3 (300ft3) of air space for each adult sleeping in the sleeping area, or (iii) a habitable room in it that is not a bedroom but is used for sleeping purposes in combination with any other use has less than 9.5m2 (102ft2) of floor space and 21.4m3 (756ft3) of air space for each adult sleeping in the habitable room. (b) For the purposes of calculating this section, a person who is more than 1 year of age but not more than 10 years of age shall be considered as a July 20, 1999 9 Revised June 30, 2012 Alberta Health Minimum Housing and Health Standards © 1999–2012 Government of Alberta 1/2(one half) adult and a person who is more than 10 years of age shall be considered as 1 adult; (c) This section does not apply to a hotel/motel.

Food Preparation Facilities:  (a) Every housing premises shall be provided with a food preparation area, which includes: (i) a kitchen sink that is supplied with potable hot and cold water and suitably sized to allow preparation of food, washing utensils and any other cleaning operation; and (ii) cupboards or other facilities suitable for the storage of food; and (iii) a counter or table used for food preparation which shall be of sound construction and furnished with surfaces that are easily cleaned; and (iv) a stove and a refrigerator that are maintained in a safe and proper operating condition. The refrigerator shall be capable of maintaining a temperature of 4 degrees C. (400F). (b) Shared Kitchen Facilities Occupants of a housing premises with more than one dwelling may share food preparation facilities provided that: (i) the food preparation facilities are located in a common kitchen room, (ii) the occupants have access to the common kitchen room from a public corridor without going outside the building, (iii) the common kitchen room is located on the same floor as, or on the next storey up or down from the floor on which the dwelling unit is located, July 20, 1999 10 Revised June 30, 2012 Alberta Health Minimum Housing and Health Standards © 1999–2012 Government of Alberta (iv) the food preparation facilities shall not serve more than eight persons, and (v) the refrigerator shall provide a minimum volume of two cubic feet of storage for each intended occupant.

Washroom Facilities:  Except where exempt by regulation, every housing premises shall be provided with plumbing fixtures of an approved type consisting of at least a flush toilet, a wash basin, and a bathtub or shower. (a) The washbasins and bathtub or shower shall be supplied with potable hot and cold running water. (b) The wash basin should be in the same room as the flush toilet or in close proximity to the door leading directly into the room containing the flush toilet. (c) All rooms containing a flush toilet and/or bathtub or shower shall be provided with natural or mechanical ventilation. Shared Washrooms (d) Occupants of a housing premises with more than one dwelling unit may share a flush toilet, wash basin and bathtub or shower provided that: (i) the occupants have access to the washroom facility without going through another dwelling or outside of the building; and (ii) the facility is located on the same floor as, or on the next storey up or down from the floor on which the suite is located; and (iii) each group of plumbing fixtures (toilet, washbasin, bathtub or shower) shall not serve more than eight persons.

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice.)

AFFORDABLE HOUSING CRISIS BASED ON PURE UNADULTERATED GREED OF FORCING SINGLES AND POOR FAMILIES TO PAY MORE FOR HOUSING

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AFFORDABLE HOUSING CRISIS BASED ON PURE UNADULTERATED GREED OF FORCING SINGLES AND POOR FAMILIES TO PAY MORE FOR HOUSING

(These thoughts are purely the blunt, no nonsense personal opinions of the author about financial fairness and discrimination and are not intended to provide personal or financial advice.)

This blog has published several posts on affordable housing  and psychological impact (housing).  How can we not talk about it yet again?  This post shows how much of the housing crisis is based on pure greed and the greedy appear to have no shame.  They do not seem to care that housing is a basic human right (as determined internationally in the “Universal International Declaration of Human Rights” and “International Covenant on Economic, Social and Cultural Rights”) and is one of the principles of Maslow’s Hierarchy of need. There also appears to be no shame that singles are more likely to have to pay more per square foot for their housing purchase or rent than for any other member of the family unit.  Poor families are less able to purchase detached housing so are forced to purchase or rent condos or apartments, many of which are not ideally suited to families. Besides purchase or rent (rent-or-own), what other options are there except to sleep in vehicles, couch-surf or live in homeless shelters?

The Calgary Herald May 8, 2017 article “Nobody’s Home” by Garry Marr further magnifies the plight of the housing industry in Canada much of which appears to be totally based on greed.  The article states that in Toronto ‘some believe vacant homes exist on a widespread basis, bought up by a stream of investors so consumed by speculation – or just a safe place to park their money – that they can’t even bother to rent out their properties in markets where the going rate can easily top $3 per square foot…..data seems to indicate there were as ‘many as 66,000 vacant units in Toronto in 2016.  That’s equivalent to 5.6 per cent of the city’s total stock of 1.2 million private dwelling units’.  If one calculates this based on a family of four one could guess that this means about 16,500 families are missing out on Toronto housing.  But wait, the article goes on to say that of the empty homes, 90 per cent were condos or apartments.  If one assumes that condos and apartments are more likely to be bought/rented by singles and poor families, then this would mean singles and poor families are more likely to be hurt by the empty units and Toronto housing crises.  Just what are cities and towns and developers going to do with the fact that singles and poor families are the biggest losers in Canada’s housing crises?

How do speculators manage to purchase housing with, for example, $20,000 down payment, $1,200 mortgage payment and $200 house taxes per month and keep the place empty while maintaining another residence to live in (they have to live somewhere)?  These people must be very wealthy and quite greedy to not care about those at the bottom of the property ladder?

Maclean’s Magazine May, 2017 article ‘Through the Roof’ by Joe Castaldo (archive.macleans) shows landlord greed when rent is doubled from $1,200 to $2,400 for a one bedroom apartment in the Toronto’s The Bridge Condo.  Sales for The Bridge condo complex (the-bridge) over last 12 months shows smallest one bedroom 449 sq. ft.condos sold for $224,000 or $498 per sq. ft.; sales price of average size one bedroom 521 sq. ft was $313,104 or $600 per sq. ft, and largest one bedroom 569 sq. ft. was $405,500 or $711 per sq. ft.  Two bedroom plus den 740 sq.ft. condos sold for $360,000 or $486 per sq. ft. (figures do not include parking and storage fees). The largest two bedrooms plus den condos sold for basically same price per square foot as the smallest one bedroom condos.  The pure unadulterated greed continues to force singles who are more likely to own/rent one bedroom condos to pay more per square foot for the smallest spaces with ripple effect of them paying more house taxes, mortgage interest and real estate fees on less space and more likely less income and biggest lifetime expense (upside-down-housing).

Singles are told to ‘go live with someone’ if they are having housing problems.  So, in this case, what are singles to do except ‘couch surf’/share one bedroom with someone they may not know well?  Renters also are likely forced to move every few years when landlords do renovations and/or raise rent on their dwellings.

Story of single mother with son – son still lives at home, mother helped him purchase a dwelling which he rents out because he would like to financially get ahead.  Moral of this story, single mother likely has jeopardized her ability to save for retirement by helping her son especially if the housing market crashes and both her and her son are left having to pay mortgage worth more than the house. Because this is her child, she has done this out of love for her son.  As most parents seem to do when their kids are still living at home, he is likely not paying her anything for rent or food.  Juxtaposition is that son is renting out this dwelling at market value to some Joe Shmoe who cannot afford to buy something, but has to rent.  To the mother and the son, they don’t see this person(s) as the child of someone else (part of the family unit), so it is okay to ‘sucker punch’ this person(s) with rent at or above market value.  Greed begets greed and greed trumps family values.

Financial Post April 28, 2017 ‘LePage warns of housing ‘market whiplash’ article by Garry Marr (market) states ‘concerns that government is going to slap more rules on the housing market, particularly aimed at Toronto’s residential section, appear to be growing among the real estate industry.  Royal LePage joined the chorus of those advising that Ottawa and its provincial counterparts should tread cautiously before considering everything from rent control to a tax on foreign investors.  “An unfortunate side-effect of heavy-handed government regulatory intervention is that we risk whiplash,” Phil Soper, chief executive and president of LePage, said in a statement.’…..Data from the Toronto Real Estate Board this month showed prices in Canada’s largest city were up 33 per cent in March from a year ago.’ (The inaction by politicians, developers and real estate companies will only worsen the housing crisis).

Los Angeles Daily News May 13, 2017  ‘Amid state housing crisis, why 2 out of 5 millennials still live at home’ article by Matt Levin (why-2-out-of-5-millennials-still-live-at-home) articulates ‘State lawmakers have introduced more than 130 bills this legislative session to try to solve California’s housing affordability crisis, proposing everything from 150 square-foot apartments to a $3 billion affordable housing bond.’ (Oh yes, that is what single millennials deserve – to live in 150 square feet that includes kitchen, bedroom and bathroom all in one space which is the equivalent to the size of the bedroom that person lived in as a child)…..Nearly a decade removed from the depths of the Great Recession, a staggering 38 percent of California’s 18 to 34-year-olds still live with their parents, according to U.S. Census data. That’s roughly 3.6 million people stuck at home. Think of it this way: If “unlaunched” California millennials formed their own state, they would be entitled to more electoral votes than Connecticut, Iowa or Utah. If they formed their own city, it would be the third largest in the country’.  (The rest of the article is a very good read on why millennials are being forced to live at home with their parents including low wages).

CONCLUSION

There is appears to be no willingness in Canada on the part of politicians, developers, real estate companies and families to deal with the housing crisis except to apply band-aid solutions or to take no action at all.  How many more times can it be said that until housing greed is resolved by taking ethical and moral responsibility and until the minimum wage is changed to an indexed living wage, the housing crisis will continue to worsen?

(This blog is of a general nature about financial discrimination of individuals/singles.  It is not intended to provide personal or financial advice.)