Ready to Start Paying Back $300 Billion Or So?

Our Federal deficit will be between $280 and $300 billion this year! The deficit is just what we’re short in spending versus income. No, it’s not like a credit card. That’s a cute political shot that’s just not close to being true but sounds nice and simple. But think of it as you spending more than your income. If it was $500 a month that’s a problem – but that can be solved. Then, overnight, it turns to being short $15,000 a month! When it’s 30x you’re no longer going to find some savings or being able to count on a cost of living raise. You’re starting to wonder if your 14-year old can hold a full-time job or whether you could live in your car…

And this isn’t an abstract problem that’s happening to a neighbour or friend. This is happening to you and me – we’re not just cosigners of this shortfall (and the debt that’ll hit a trillion dollars by the end of the years.) There’s only one group that owes it: You and me.

As a result, the government (this one or the next one) will need some huge extra income. Cutting a bit here and there will help but won’t get one-one hundredth of the money.

It’s a pretty safe bet that the GST will go up. That’s a big pot of money, but won’t make much of a dent. Tax increases? Maybe – but forget the political like that “we can just tax the rich.” It’s bullcrap. There are only 270,000 Canadians earning over a quarter million a year and their marginal tax rate is already over 50%.

Could it be that they’ll start taxing the sale of your home? Your principal residence sale profits aren’t taxed. But it’s a good bet the government will look at it and maybe float that as a “trial idea” within the next few years. Whether it may come to pass or not, start keeping all your receipts for home improvements. If you made $300,000 selling your home it’ll be a big help to have $60,000 in receipts to deduct from that profit before it’s taxed. If it doesn’t come to pass, you can throw the envelope out – but you can’t recreate the receipts a few years from now.

If you have any other ideas of where the government can find a huge untapped pot of funds, I’m sure the finance minister would love to hear from you. Every level of government has their hands so deeply in our pockets already, there just aren’t many places left…

I doubt there are many people who question the wisdom or necessity of the Federal Government help because of the Corona virus. However, a rainy day fund of savings when the economy was humming along would have been great. But just breaking even hasn’t been a priority for years. The next five years will be a huge rude awakening for taxpayers that didn’t care much over the past decade…

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