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Guest Blogpost: I read the budget and all I got was a lousy $166!

Foreword: Kuri wrote at her blog called “Thoughts Interrupted By Typos” for a couple of years, before deciding to take a break from blogging last year. She wrote primarily (but not exclusively) on feminist topics and issues, and from an NDP perspective.  Her guest blogpost today deals with her perspective on the Conservatives revamped Budget 2009. The opinions expressed by Kuri are not necessarily the opinions of Scott’s Diatribes.

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Hello, everyone in blog-land. Long time, no write. But since Scott has twisted my arm rationally and persuasively convinced me of the merits of blogging again on occasion, I’m writing now. [superemotions file=”icon_biggrin.gif” title=”Big Grin”]

So, my friend Mrs. Spit and I had a long, lunchtime conversation about the budget. This is one of the many topics that you will hear us loudly discussing over some knitting and pizza in our suits over a weekday, downtown lunchtime.  That’s, as they say, how we roll. You should read Mrs. Spit, because she’s a smart cookie and a good writer.

And Mrs. Spit being smart, had already figured out her tax savings and learned from the handy-dandy tax savings calculator that she will save a whooping $166 in taxes this year as a result of the budget. Another friend who lives in Toronto calculated $166, and I got this as well. All 3 of us are middle-class Canadian women. 2 of us are homeowners, 1 rents. 2 of us are married, 1 is single. None of us have children but 2 of us want them. We are average office-working people, but relatively unencumbered by financial responsibilities. In theory – and this is strongly suggested in the budget document itself – the carefree, discretionary spending of people like us is going to lift the economy out of recession and back into an era of never-ending jobs and raining money. (Like we were told it was like 6 months ago…) Mrs. Spit, myself and my Toronto friend could each take someone to an upscale restaurant and get decently tipsy. (However, I suspect that only I would order wine, leaving my two friends with some extra money to get a lunch as well the next day.) At most 2 meals – not really enough to hire an extra waitress yet.

The other reason Mrs. Spit is smart is because she noted that if the government were to take my $166, and my Toronto friend’s $166 and her $166 and her husband’s $166 and the collective $166s of our office colleagues and instead provide that relief to the low-income retail worker, that it could mean the difference between that retail worker having to choose retail because it’s the only work accessible by bus, or working at a much higher-paying infrastructure-y trade or construction job on the outskirts of the city. Those jobs often require their workers to have a car, but they will pay enough for that (former) retail worker to improve many other things in their life, and the car will also allow them to access cheaper goods, shop around for financial services and give them more to access public services in distant areas of the city.****

As the owner of an older house, the Home Renovation Tax Credit (HRTC) should, in theory, have me ramping up my spending on improvements. In fact, I’ll admit that I was pretty pumped when I first read about the HRTC. Then I read the fine print and was, er, not so pumped.

Indeed, with several projects on the go, I will probably spend more than $1,000 on home renovations before the deadline, after which I will get a 15% credit on any further expenditures. It may, over a couple of years, assuming the maximum amount I can normally afford, net me around $300 over 2 years. Will these savings be enough to get me to move up any projects? Probably not. Why? Because I already know I can only spend a certain amount on renovations, and they will therefore go slowly. In order to get the maximum amount of $1345, I would have to spend $10,000 before February 2010, in addition to all the regular costs I’m paying in maintaining my home. Given that I don’t have this amount of  extra money lying around, the ways to do this are: 1) remove money from retirement savings (not wise and would negate any tax benefit), 2) incur consumer debt using credit cards (the interest paid would be far, far higher than any tax savings and it would take me much longer to repay, and hurt my credit rating for years), 3) use a line of credit to pay for it (same consequences as a credit card, though less severe due to the lower rate). And what is the point of saving taxes if you’re going to be paying the same amount – or more – to the bank anyway? So while 4.6 million families may benefit from the HRTC, I’m very skeptical that anywhere near that amount will alter their buying decisions as a result of it, therefore stimulating the economy to be more active than it otherwise would have been.

So even when you accept that giving more money to middle-class cranks like me and my friends is the best way to further long-term economic activity, this budget falls short when it comes to the kind of savings that would propel any of us to alter our perceptions or our behaviour to create the turn-around the press releases and the documents claim.

Rather, the cheapest way to create jobs is probably the most direct way: create good, useful programs and hire people to deliver them. The government has been trying to do economic development with several regional agencies and partner organizations on the cheap for decades. They could be doing a lot more, if the operating funds were there.

****Bear in mind, I’m thinking specifically of my home city of Edmonton, whose transit system is woefully inadequate, but I belief this is the case in many other mid-sized cities across Canada. It is quite common to see job ads requiring applicants to have access to a vehicle.

15 comments to Guest Blogpost: I read the budget and all I got was a lousy $166!

  • kwittet

    It is funny watching opposing sides banter back and forth. I agree with some that $166 is F/A. But it is 166 i didnt have before. I see people who live on the “system” (social assitance) every day. If they want to give my 166 to those who need it the they better clean up THE CHEATERS in the system…and trust me..i see it every day…people who are working under the table..people who can do almost anything but when thier worker shows out comes the cane…odsp people who can work but mysteriously in the summer can fix boats and crawl all over them for cash, people with bad backs shovelling snow in the winter for cash.. Its a catch 22..they say they need extra and are willing to cheat to get it yet there are some who are honest. so if they nned more then catch the cheaters…cut them off..then there would be more for the ones who really need it..and maybee more for us who help them!!

  • Roll Tide

    It would be a boring blog if everyone agreed with one another, just a mutual admiration society.

  • It’s good to see bloggers returning after falling off the computer wagon.

  • Roll Tide

    ” it won’t make much difference”
    “It’s not just my $166 that needs redirecting Roll Tide, it’s everyone’s.Including yours, if you’re getting it.”

    BINGO!
    Liberals want to be compassionate with other peoples money.

    http://www.realclearpolitics.com/articles/2008/03/conservatives_more_liberal_giv.html
    Conservative donate more then Liberals. Conservative are compassionate where it counts, there own wallets.
    When I see Joe Biden donate an average of only 336 dollars a year to charity, it says volumes. I make a fraction of his salary and give over 10X per year.
    http://www.usatoday.com/news/politics/election2008/2008-09-12-biden-financial_N.htm

    Conservatives understand how wealth is produced, and how taxes stifle wealth production. Liberals are always looking at how to redistribute wealth instead of creating more of it. Remember, a job beats a government handout. Only the private sector can create productive wealth creating jobs.
    I will leave you with the words of a great president, Ronald Reagan, words that are so real in todays economy.

    “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

  • Kuri

    I find it interesting that none of the comments accusing me and my friend of whining or telling us to donate our tax savings are actually refuting my argument: that these breaks are too spread out and too thin to produce the kind of spending claimed and create the jobs the budget documents claim they will.

    I just might donate my tax savings, but it won’t make much difference. If mine and everyone else’s were redirected towards to those in most need, however, it could make a huge difference. It’s not just my $166 the needs redirecting Roll Tide, it’s everyone’s. Including yours, if you’re getting it.

    • Roll Tide is my semi-permanent Conservative apologist/troll on here, Kuri. If you’re expecting to reason with him, I suspect you’ll be disappointed, as you can probably see.

  • Roll Tide

    @MoS

    That is the option of the consumer, not the government.
    Remember, third world economies need us to buy their goods for them to survive.
    The left often fail to realize that the best thing we could do for them is to buy their goods. That helps them 100 times more then a handout. Buy America, Buy Canada is a recipe for a world depression. Read History! Ask any Economist, its only issue that unites the vast majority of them. Obama should take heed of the damage the Smoot Hawley Act inflicted. Leftists and rightists never learn. Listening to Biden on TV today defending “Buy American” sickens me. McCain warned Americans of this danger to deaf ears.
    .

    http://en.wikipedia.org/wiki/Smoot-Hawley_Tariff_Act

  • Roll Tide

    @mrs.spit

    Dear Mrs Spit:

    The government is letting you keep a little more of your money. If you do not want it, donate it back to the government, the united way, or better still you can give it to the low income retail worker, who also got a tax break (that the left ridiculed).

  • MoS

    Oh stop complaining. Take your $166 and go straight to Wal-Mart. It won’t be enough to buy an Indonesian TV but you will be able to pick up a Chinese-made toaster and a half-dozen of those Indian-made T-shirts. It won’t do squat for the Canadian economy but I’m sure it’ll be appreciated for its stimulus value to the Chinese and Indian economies.

  • Frankly Canadian

    I totally agree Mrs. Spit, I too will be hard pressed to find how this minuscule tax relief motivates me to spend any more than I would normally have. As to the renovations, again the cost of each project dictates when the shovel hits the ground, sort of speaking, fifteen percent does little to advance any of the projects start dates. In summary the advantages the recent budget offers are far from adequate to stimulate the average Canadian, the money probably would have been better spent helping the less fortunate who you know will be spending and not saving.

  • Ahem,

    It was Kuri complaining that the HRTC tax credit.

    But, If you read a bit more closely, I am suggesting that a)If the government is trying to have me stimulate the economy, my $13.86 isn’t going to cut it. And
    b) I’d rather they gave my money to my neighbour, who could use it to make a real difference.

    Not exactly sure how that was inconsistent.

  • Roll Tide

    Mrs. Spit is confused. She first complains her tax cut is too little, then she complains its too much (she has enough money)
    Regarding the HRTC. Same thing, initially exited, but then complains its too little (this time she doesnt have enough money).
    This reminds me of Paul Martin Jr. complaining that the GST cut was too little (“a couple of bucks on a toaster”). Then turns around and complains of the GST’s needed revenue.

    You cannot have it both ways. Mrs. Spit has lost credibility.

  • Am i the Toronto friend?!

    But yeah, what you said! I had posted previously that only a really significant tax cut would maybe get people spending – like adding up to an extra couple of hundred dollars on your paycheque every pay, but that was never going to happen. $166 just isn’t motivating me to go out and buy that extra TV for the bedroom…

  • And maybe a very sensible answer is to have the country’s single largest employer (the public service sector) and the third largest employer (the Canadian Forces)continue to hire, continue to be active in service delivery.

  • Oemissions

    This reminds me of other pay out schemes, scams.
    The BC $100 carbon tax credit. Ralph Kleins’Alberta giveaway,etc.
    Then there is OAS to Canadian seniors pulling in over $50,000 in income, and there are a great deal of these. And wealthy families are still getting some child tax benefit too.
    Fat Senators are getting fat salaries. At their age, don’t they have everything paid for already?
    And then there are all those heavy expense accounts for government officials: free food in expensive restaurants, free hotels, free airfare and a free car.
    Any common household knows how to fix their budget. Meanwhile, on my wage, a pound of butter is a LUXURY item.And yes, I take the bus, bike or HITCH a ride.

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