Refundable tax credits
Most tax credits in Canada are non-refundable: If they bring your income tax balance below 0, you do not get a refund. A refundable credit is a tax credit that pays a refund even if your income, and thus tax bill, is too small to be larger than the credit.
The 2016 Canadian Budget: refundable child tax credit
The recent budget includes a fairly generous refundable tax credit.
It has an associated 2 tier linear clawback tax rate. The liberal government and other prominent politicians have characterized this as a form of basic inccome. Normally, targetted clawbacks violate basic income principles, but this program is pretty good in that the clawback/tax only starts at $30k income, and there is a somewhat gradual cutoff at relatively high income rates.
Liberal Pronouncements on deserving, less deserving and undeserving Canadians
- There was no call for a pilot study or social research prior to implementing this refundable tax credit, to determine who deserved what amounts the most, or determine economic consequences .
- Non parents are undeserving of aid. Parents with fewer children are less deserving.
- The kink in the curve from $30k to $70k income is regressive, and insists that lower middle class income parents are less deserving than higher income Canadians. (they deserve a higher clawback rate)
- Highest income parents do not deserve to pay for any part of the program (get 0 benefit, but don't have a negative benefit/tax)
- A straight line can be drawn from the 0 benefit point and $6400 benefit point, and it would perfectly overlap the benefits from $70k to $185k income. Thus, the cost of increasing the benefit to the deserving under $30k income parents is entirely borne by punishing parents earning $30-70k.
- A different straight line that is steeper but provides a higher benefit at 0 income could have been drawn, and therefore, low income Canadians are fundamentally less deserving for not having a straight line benefit.
- One such straight line would cross the old conservative program (dotted line) at 28k income and $120k income. It would cost less than the Liberal program, but provide more for everyone under $120k income (compared to dotted line), and more than the proposed for every parent earning under $18k income.
- That line could be shifted up with the same slope (clawback tax rate) until its cost is identical to the proposed program, and would result in even higher basic child benefit, and even greater benefit to those earning under $20k and $70k.
The inescapable conclusion is that the Liberal government loves parents more than Conservatives, but has a special deep love for parents with incomes between $18-30k and $70-140k, and special deep contempt for parents with income below $18k, between $30-70k, and over $140k.
The value of progressive child benefits
From the perspective that raising children is a gift to society and necessary for its future prosperity, it is justifiable to offer progressive or flat tax benefits to support such choices. Yet every kink in the above curve that decreases in slope is a regressive kink placing more tax burdens on lower income groups below the kink. Their claimed goal of eliminating child poverty is insincere if they fail to understand that parents with income below $0-25k need more help than those with income of $30k. A perfectly straight curve (flat tax) better achieves poverty elimination, and doesn't demand an explanation for why the Canadian government hates people in the extra punished groups.
Does the Canadian government hate single Canadians aged 18-65?
Its not the case that this group does not receive tax credits and programs, and so just because they are outcast from some programs is not an expression of hatred from their government. CPP is a direct benefit to the contributor. OAS promises to one day free you from the slavery-equivalent-life-pressures you must experience until 65. EI, disability, welfare, housing assistance, and labour laws (minimum wage, overtime) are fundamental acknowledgements that dystopian slavery pressures must be count