Thanks for all your support!

Hi everyone,

Thank you very much for all your support during these past two and a half months with the competition. It was a fun ride while it lasted. Unfortunately, I will not be progressing to the next round of the competition.

My sincerest thanks once more,

Tani

Response to Jeremy Dias

This post is in response to a video question from Jeremy Dias (video at the bottom).

Hi Jeremy,

Thank you for your questions. You brought up some very valid points, that I will do my best to address one by one here.

First, adjusting the guaranteed annual income payment dependent on location. There are several reasons I am opposed to this. One, it makes the system a lot more complex and takes away from the idea that the $7500 is not need-based. You would need to set up an administrative board to oversee the different payment levels. Furthermore, even within Toronto for example, there would have to be adjustments, because living right downtown costs more than living just a few kilometres away. Secondly, it’s unnecessary. The $7500 is not designed to be a livable income, but rather, when combined with minimal work effort, it should become a livable income (that’s why I have said that disability assistance and similar programs should be kept). Areas with higher costs of living tend to have better access to jobs. In Northern Ontario for example, yes it’s easier to live off $7500, but it’s also harder to find well-paying year-round work, so the two factors balance out. I don’t want to go into great detail here, but this system would also work especially well in the Atlantic Provinces. The Maritimes have a lot of season employment and the current system of welfare and EI creates a quite a few problems. This guaranteed income would bring a lot more financial stability to people living in the area.

Second, you mentioned the fact that the 24% is too high for low income earners. I have addressed this issue before with other candidates, and in my community video. Basically, the $7500 (which is a fixed sum) and the 24% in the other direction work against each other to create a proportional tax system that’s proportional at all levels of income. To a low income earner, getting $7500 from the government far outweighs paying an income tax rate of 24% (in fact for everyone earning less than $31 250 of income, the $7500 payment is more than their tax burden at 24%). The reason why I chose to not have a graduated system is because of simplicity, better forecasts of revenue generation and compliance. For both of these points that I just made, I would direct you to my community event video, where I explain these in a slightly different way (at 2:07 – the progressive aspect, 3:42 – flat taxes).

Third, on foreign aid. Here’s where we seem to completely agree, but I may have been a bit unclear in my initial video. My idea was not to send them Canadian goods, but Canadian machinery. So, instead of us sending them corn for example, we would send them machinery to help them develop a sustainable agriculture industry. I don’t think I need to convince you on the benefits of this, cause it seems to be exactly what you are saying as well. I’m glad we agree!

Hope that addressed your concerns,

Tani

Jeremy’s Original Video Question

Response to Emmy Marshall-Hill

This post is in response to Emmy Marshall-Hill’s question regarding my claims of a simpler tax system (original video question at the bottom).

Hi Emmy,

Thank you for your question. To clarify my claims: the current system has 5 different brackets, at irregular and arbitrary intervals. There are exemptions and deductibles and credits. I’d like to direct you to the Government of Canada website on the federal tax rates. You’ll see a complex tax chart, which has you use different columns depending on your income and you need to carry over numbers. A certain amount of tax is collected from paycheques, based on government estimates of your income, but obviously those are never fully accurate, so people have to file stressful 4-page long returns during ‘tax season’. The negative income tax captures into a neat system all the deductibles and credits, and collects 24% directly from paycheques. That’s what I mean by my plan being simple. With one easy calculation, we can have a tax system that is fair and progressive, and better able to address the needs of low income earners.

Hope that answers your question,

Tani

Original question:

Response to Video Question 2

This is my response to CBC’s question: How would you address the crisis in the automotive industry (video below). In my opinion this simplifies to another question: Should the government bail out the big three. My short answer to this question is no. And there are several reasons for that. First off, the automotive industry, as it pertains to the big three of Chrysler, Ford and GM is unsustainable. These companies have deep-rooted problems due to poor management and a bailout now would only push off their inevitable bankruptcy. Experts are predicting that if the $14 billion package in the US makes its way to the companies, even with additional help from the Canadian government, it would give them a maximum of 2 additional years before more financial help is needed. In order to avoid this, a complete structural change is needed, towards a more sustainable and environmentally friendly business model. The companies offered no such change to the U.S. congressional committee. Furthermore, experts agree that our economy is in transition, towards the knowledge industry. In the future, most of our well-paying jobs will be in this sector of the economy, not manufacturing. Also, a recent statistic showed there were no major net losses in manufacturing jobs in the last month, because while Ford and GM were laying off workers, Toyota and Honda were hiring in almost matching numbers. So, if in the short run autoworkers are switching companies and in the long run our jobs will be in a different industry altogether, then there is far less of a need to spend billions of dollars of tax money to push off the inevitable for a few months to two years. If the government has to get involved in our current economic situation, it must help to create the jobs of the future, which will be greener and in our developing knowledge industry. Thank you.

Response to Shilo Davis

Hey Shilo,

Thanks for the comments. Your concerns are certainly valid. I have addressed a few already and will clear up the rest when I release more detailed videos (the first of which should be up by the end of the week).

It seems you and I have a similar perspective on cutting taxes for the lower and middle class. I propose funding this by making modest cuts, and getting rid of the credit system (which is complex and discriminatory). I hesitate to support your system of deeper cuts offset by increases in the higher brackets. A recent study found that in Quebec, the highest earners pay about 59% (average, not marginal) of their income in taxes (federal/provincial income, sales taxes, municipal, excise, etc). Therefore, I don’t think it would be fair to burden them further, pushing them over 60%.

I’m just curious about your vision for the Senate. I stress the word vision here because I believe any reform on the Senate should be taken with a clear objective in mind. You said you want senators to serve a maximum of 8 years. What do you hope to accomplish? Do you see the Senate as a sober second thought, like it was designed? Or do you see it as just a different body from the House of Commons? I’ve heard ‘8 years’ being floated around, and I was just wondering what your particular motivation behind it was.

Thanks again,

Tani

Response to Mr. Timothy Favelle

YouTube has a strict limit on the character count, and rather than stretch this over a long series of comment posts, I’ve decided to answer here.

Hi Tim,

I think you’re misunderstanding my proposal. I have responded to similar claims by Mr. Patrick Zaph, but I will summarise a few key points. Let’s compare post-tax incomes between the current system and my proposal to see that my proposal helps the poor far more than the wealthy.

Currently, the exemption is $9600. Under my proposal, the income level of 0% tax is $31 250. In fact, if you earn less than that, you end up with more money than what you get from work. After $31 250 you start paying a positive tax rate that slowly picks up and taxes the highest income earners at the near full 24% outlined. It is also important to note, that high income earners currently only pay 29% on just the taxable income above $123 184, and qualify for a lot of the exemptions that I will be eliminating to pay for the broad tax cut.

Also, your claim that my plan will force people to work longer and destroy family life is actually the opposite of what will happen. Unlike the current welfare system, my proposal actually helps people who work part time to improve their standard of living. It will allow single parents to work moderate hours, and still spend time with their kids.

Your concerns on Canadians who can’t work are very valid. In my video, I stated that my tax will replace the current welfare system. However, we currently have seperate programs for disability assistance, and other special needs. These will be kept in place. It would be cruel and unjust to eliminate these.

I thank you for your interest in my tax proposal. If you still have any questions, I’ll be glad to answer them. However, I would please ask that before future questions, you take a few seconds to compare a person’s post-tax income in the currect system vs my proposal.

Tani

Answers to Mr. Zaph’s questions

This post is in response to a video as well as a discussion thread put up by Mr. Zaph. I will be putting up a more comprehensive explanation of my negative income tax idea soon. I merely wanted to clarify a few things, in case anyone else was having the same questions.

To start things off, the $7500 is non-taxable. If we wanted to get picky about it, then I could give $9868.42 a year and tax that at 24% and we’d be back to square one.

Also, the tax is much more of a relief for lower income earners than higher income earners.

Mr. Zaph brings up that under the current system, at incomes under $9600 you do not pay income tax. Under my proposal, the point where the amount of tax you pay equals the amount of tax you receive (i.e. you pay $7500 in taxes and get $7500 from the government) is achieved at $31 250. That means that all Canadians making less than that amount will actually end up with more money than they earn from work (hence the term: negative income tax). People making more than that will pay a positive tax rate, that self-adjusts to be progressive, taxing the highest earners at near the full 24%.

Mr. Zaph claims that I am cutting the tax rate by 5% for high income earners. High income earners only pay a tax rate of 29% on taxable income over $123 184. For income below that, they are paying 0% on the first $9600, 15% on the next $37 885, …

Mr. Zaph also states that the government would have to give out a lot of money (that it currently does not have) under this proposal. The key to consider here is the net change. If a person saves $1 000 dollars a year under the new system (gets $7500 from the government, but pays $6500 more in taxes), the net cost to the government is only $1000, not $7500.* So there is no need to cancel everything the government does to implement this policy. It is simply not that expensive.

The last point that I want to touch on from Mr. Zaph’s critique is the costs of simply administering the system. This system should be cheaper than the current one for several reasons:
1) There is no need for agencies reviewing people’s welfare applications.
2) The tax return system will be a lot simpler and ideally would be unnecessary as 24% can be deducted from paycheques automatically, without a need for adjustments in April.

I hope this cleared up a few things. I will be releasing a fully-detailed video soon.

*If you look at the original proposals of a negative income tax, it explains why this is happening. The original design is that there are 2 taxes, a negative percentage rate and a positive one, and as you earned more money, the negative rate became phased out. The effect is the exact same as the more modern implementation, except that the idea of a cheque and solely a positive rate is simpler to understand and requires fewer formulas.

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