Canadian Families taking turn for worse
Anyone who knows people and their spendthrift ways, knows once a debt is reduced and money is left over, little of the money goes to pay down the debt, instead it is spent by those unclear on the concept of saving money.
The self imposed debt ridden masses who look to the government for relief from their own destructive spending habits need a wake up call, something Opportunistic Opposition Politicians will surely and historically fail to deliver further miring those into further debt in the hopes the Elected Government will deliver.
My Final Thought
Government tax incentives and tax cuts provide temporary relief to some, yet tax cuts mean other programs others rely on will suffer a shortfall, either HealthCare, Investment, Jobs, Social Programs, City budgets, Policiing or infrastructure etc. That is a No Brainer that some fail to realise when they see that meager few dollars as a savings boon for themselves.
A disturbing report released this week confirms what too many families already know.
We're drowning in debt.
Many Canadians are juggling such high levels of debt that a job loss could push them over the edge, says a report for the Vanier Institute for the Family,
The good news is that, because of labour shortages, hourly wage gains have outpaced price increases for the second year in a row, according to the report, titled The Current State of Canadian Family Finances.
While household incomes may be rising, debt has risen seven times faster since 1990 -- to an average total of more than $80,000 per household.
That's equal to a record 131% of household incomes.
Spending increased at three times the rate of earnings in the same time frame.
While our net worth has increased 18% since 2000, largely due to rising real estate values, we're saving a lot less. Most households banked $1,000 in savings last year compared to an average of $7,500 in 1990.
While this report likely won't surprise many families struggling to keep up, at least we know we're not in it alone.
Misery loves company, but that's not much consolation for the almost 50% of Canadian families that couldn't make ends meet in 2005, according to the report.
Even less consoling is the lack of meaningful relief offered by our political leaders. They're well aware of these challenges, but haven't exactly rushed to the aid of Canadian families by cutting our taxation load.
Federally, Finance Minister Jim Flaherty is warning not to expect significant tax relief in the budget his government will bring down Feb. 26.
In the fall, the Conservatives cut the GST and reversed the personal income tax increase they enacted in 2006. An individual's average income tax bill will fall by $223 for the 2007 tax year. A new child tax credit will save families with two children between $800 and $900 a year.
Yet, as the Canadian Taxpayers Federation takes pains to point out, more needs to be done to ease this country's heavy tax load. While families struggle to keep pace, Canadians suffer the highest personal income tax burden of all the G7 nations.
Provincially, cutting our tax burden has taken a back seat to spending for politicians trying to woo our votes.
After an initial round of spending announcements so blatant even the politicians making the promises appeared embarrassed, the election debate is shifting to saving for the future.
That's a welcome change of focus. Record resource revenues may cover current runaway spending, but taxpayers will be left holding the tab if the government fails to adequately save for future economic downturns.
The Progressive Conservatives say they will phase out health-care premiums over four years, saving the average family about $22 this year. Proposed tax cuts for families and seniors are a good start, but so inscrutable, Premier Ed Stelmach rarely mentions them during his speeches.
The Liberals promise to abolish health-care premiums in one fell swoop, but their commitment to lower taxation appears to ride on milking maximum royalty income into a long-term resource-revenue savings plan.
The NDP promises lots of help for families, but in the form of new spending programs, rather than tax cuts.
Only the Wildrose Alliance, which currently holds only one seat, is offering significant tax relief, but it's unlikely they'll have to deliver on such promises.
A recent Canadian Taxpayers Federation poll found 65% of respondents felt federal personal income taxes are too high and 57% deem the tax system unfair.
With a federal election potentially looming and a provincial one currently being hotly contested, there is no better time to push for tax relief.
Families buried under a mountain of debt deserve a break.