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Tax Relief Goes To Pot
Pubdate: Thu, 24 Feb 2005
Source: Toronto Star (CN ON)
Copyright: 2005 The Toronto Star
Contact: http://www.thestar.com/
Details: http://www.mapinc.org/media/456
Author: Jim Daw
Bookmark: http://www.mapinc.org/mmjcn.htm (Cannabis - Medicinal - Canada)
TAX RELIEF GOES TO POT
OTTAWA - Canadians will get tax relief to buy marijuana, gold and
jewellery and for world travel under yesterday's proposed federal budget.
That might make Ralph Goodale sound like the coolest finance minister
ever. But, in terms of broad-based tax relief, he's doing next to
nothing to help folks pay their bills.
Most tax goodies are targeted at the disabled and seriously ill,
high-income retirement savers, parents adopting children from abroad,
air travellers and emergency workers, including paramedics.
The budget documents are so square they spell wacky tobacco
"marihuana," which would never have resulted in the nickname Mary Jane.
Marijuana bought for medical purposes from Health Canada or a
designated grower will be eligible for the 16 per cent medical
expenses tax credit, which kicks in after your annual medical expenses
exceed 3 per cent of net income or $1,844. Other new eligible expenses
for 2005 will be the cost to buy and operate phototherapy equipment
for skin disorders like psoriasis and the cost to operate an oxygen
concentrator.
Gold bullion will become an eligible tax-deductible investment for
retirement savings plans, which will save gold bugs the cost of buying
the precious metal through a mutual fund.
Jewellery made in, or imported to, Canada will be cheaper thanks to a
gradual phase-out of a 10 per cent excise tax on manufacturers. The
tax will fall by 2 percentage points this year and future years until
it's gone in 2009.
Air travellers will get slight relief from cuts in the Security Charge
($2 on round-trip flights in Canada, $1.50 for U.S. flights, and $3
for other international travel). Parents will get a 16 per cent tax
credit for flights and other expenses up to $10,000 related to
adopting a child abroad under a new adoption-expense tax credit
starting this year.
In another targeted tax measure, Goodale is proposing to increase the
maximum amount that high-income earners can contribute to a registered
retirement savings plan or pension plan.
The RRSP contribution limit still will be $16,500 this year and
$18,000 next, which would prohibit tax-deductible contributions on
income greater than $100,000. Goodale proposes to raise the limit by
$1,000 each year to $22,000 by 2010 for RRSPs and 2009 for
money-purchase pension plans.
Comparable changes for pension plans would expand tax-supported
retirement savings to those with incomes up to $122,200. Another
change would allow all those employed in public safety occupations to
negotiate larger pensions with fewer years of work than other pension
plan members. One quasi-tax measure -- the elimination of a 30 per cent
foreign content limit in RRSPs-- could actually increase future tax
revenue if additional foreign investments produce higher returns for
retirement savers.
Finally, the budget proposes a number of minor tax changes to help
people with disabilities and their caregivers.
The disability tax credit will be expanded to include a larger group
with cognitive difficulties, several restrictions that combine to
restrict activities of daily living or conditions like Type I diabetes
requiring more than 14 hours of therapy more than three days per week.
Expenses eligible for the disability support deduction will be
expanded to include job coaching, reading services, deaf-blind
intervening services, Bliss symbols boards, Braille note takers,
page-turners, and software for the blind and learning disabled.
A refundable medical expense supplement, available for those moving
off welfare, would be increased by 30 per cent to $750 in 2005. The
maximum medical expense that a caregiver may claim for medical and
disability-related expenses for a dependent relative will be doubled
to $10,000.
Laurel Rothman, national co-ordinator of the national coalition on
child and family poverty, Campaign 2000, said the budget did not do
enough for the poor.
"We were very disappointed not to see any action on affordable housing
for the 750,000 households paying more than 50 per cent of their
income for rent. On the tax side, the $1,200 increase in the personal
exemption will be expensive ($3.5 billion by 2009) and yet it will do
very little for low-income people.
"If we want to help low and modest-income families, we would want to
increase the child tax benefit to a maximum of $4,900 (and) increase
the GST tax credit."
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MAP posted-by: Derek