Tuesday, March 20, 2007

Taxes, the Poor, and the Federal Budget

Maybe it's because it's tax season, but I find myself unexcited about the budget, although you'd think going through all my receipts would get me more interested in how the government is going to relieve my burden. They introduced an interesting benefit for low-income workers in order to get people off of welfare and into low-paying jobs, and although I believe this is a step in the right direction, I'm not sure it's the right step -- partly because of the loss of benefits once someone comes off welfare -- and it doesn't help me at all. I can't work; I live on the largesse of others and my savings; and I still pay taxes. Go figure. A Toronto MetBlog reader once pointed out that the disabled are by the nature of their health difficulties unable to speak up en masse (and maybe don't vote?) and that's why politicians ignore us. Still, I am truly puzzled by how Canadians and their politicians can proclaim themselves a compassionate people, better human beings than Americans, yet pay disability benefits so low one cannot see the unreachable poverty line, even with binoculars, and have resisted implementing legislation similar to the American Disabilities Act.

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Instead politicians muse about little things like eliminating ATM fees for the poor. Big whoop. When NDP Leader Jack Layton first talked about ATM fees, I thought he was talking about the onerous service charges banks levy against us. Once upon a time, banks made their money by charging more interest on loans than on savings. The differential was their income. Then they made bad loans and introduced service charges. People were upset. The charges grew in amount and number. People grumbled. Banks introduced packages and minimum balances, the latter as a way for customers to avoid service charges altogether (minimum balances mean the bank knows that they have that cash for sure to lend out to somebody else). And they introduced ATMs as a cheaper alternative to tellers. Bank profits ballooned, and the charges keep on growing, as well as on occasion the minimum balance.

So Layton's answer is to eliminate ATM fees for non-clients. That's like swatting a horse fly with a hair. Finance Minister Jim Flaherty got on the band wagon until he met with the big banks; then it was well, we'll eliminate it for the poor only, meaning one more test to prove income, or lack of, for us poor folk. But I'm certainly not going to do a means test just to get a tiny break on using somebody else's ATM machines. I've already done it for myself by using only my bank's ATMs. And it ain't that difficult. I changed banks to one with numerous and convenient ATMs. According to what I've heard though, not many people use this method when their bank starts gouging them too much or putting constant holds on one's funds or being inconvenient. But then I'm a bit anal when it comes to my money.

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I have a relative whom one could say is almost a right-wing nut. One day he came out with the statement that there should be a minimum income, below which no-one pays tax, and that minimum should be $20,000. After I recovered from the shock, I thought about that. It's an interesting idea. It would eliminate a heck of a lot of paperwork for one, and it would stop all the politicians, even NDP ones, from throwing sops at us to keep us quiet. I could live modestly but well on $20k, certainly with much more financial independence than I am now. And I wouldn't have to worry every April whether I'll have to cough up some money to RevCan, how much, and where will it come from, although with my huge tax-deductible medical expenses I don't know why I worry.

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So maybe tax season is the reason I'm not that excited about the budget.

2 comments:

nancy (aka money coach) said...

Hi there talk-talk-talk :) Just discovered and bookmarked your blog. I'm a kindred spirit, I think, in Vancouver. I was particularly interested in your post for two reasons: here in Vancouver, I've done a lot of work with people on disability about basic money stuff (how do you effectively manage your money when sometimes you're manic and believe the world's your oyster, and other times you simply don't have the energy it takes to care, at all, about money?). I hope you'll blog more about that kind of stuff.
Also, regarding banks - have you thought about joining a credit union rather than a Big Bank? Usually you can use all credit unions atm's at no charge. If you're really comfortable with online banking, Citizens Bank of Canada is kinda "ING meets Credit Union". (full disclosure: I work there part-time. but only because I genuinely believe it's doing better for people than the big 5).
Anyway, hope you'll post more on this particular topic. I'm really interested in your experience.

talk talk talk said...

Thanks for bookmarking my blog! I've thought about switching banks but at this point, I'm just not up to it. That is a good question about how someone with bipolar manages their money. It's hard enough for healthy people with a steady income, never mind someone behind the eight ball.

I tend to blog about what gets me going in that moment. But I'll keep your comments in mind!