Taxpayers Losing Control Of Earnings, Savings Through Tax Erosion

The Department of Finance has launched its budget consultations to protect the Canadian economy, and it is important for Canadians to participate, says best-selling author Evelyn Jacks, Founder and President of The Knowledge Bureau, who has submitted several recommendations to government. You can participate in two ways, by contacting the Department of Finance website or by answering our poll questions over the next few weeks.

ìThe time is ripe to reverse the ìdouble troubleî Canadians faced in 2008,î says Mrs Jacks, a best-selling author who has just published her 42^nd book, Master Your Taxes. ìTaxes now eat up almost 21% of average household budgets*, and even worse, Canadians are losing more and more control over the first dollars they earn as withholdings of deductions at source increase. If stimulation is required to keep a significant recession at bay, governments need to look seriously at tax erosion as a significant barrier for both consumers and savers.î

According to the Canada Revenue Agency, average refunds reached a record $1440 in 2007. ìAt approximately $120 a month, this represents a significant loss of control of personal funds to pay for consumer needs, let alone personal or retirement savings, which everyone knows have been seriously eroded by the financial meltdown of the past several months,î says Mrs. Jacks. ìThe problem with increasing tax burdens, however, is that they are harder to identify, because governments continue to over deduct taxes at source, thereby using your money first.î

And that trend is poised to continue into 2009, says Mrs. Jacks. ìWe know that premiums payable into the Canada Pension Plan (CPP) and Employment Insurance (EI) rise 3.4% and 2.9% respectively over 2008 levels. Even with an increase in the Basic Personal Amount to $10,100, Canadians who earn more than $42,000 will end up in a net loss position again in 2009.î

Canadians need to take a hard look at their largest eroder of wealthóthe taxes they payóby taking three actions in early 2009: ìFirst, participate with your suggestions in the pre-budget consultations by visiting the Finance Canada website: http://www.fin.gc.ca/fin-eng.asp. Second, don't do it alone: learn how to take back control of the money you earn by asking better questions of your tax and financial advisors. Third, find out more specifically how to shave off tax dollars payable by digging for deductions and tax credits, filing returns as a family, participating in RRSP and TFSA savings opportunities and refusing to overpay governments with tax withholdings.

Taxes continue to be the largest expense item for Canadians, despite ìtax-cutsî announced by various levels of governments. Statistics Canada confirmed in their report on family expenditures, released just before Christmas, that taxes, which increased of 6% over the year before to an average of $14,450 per household, consumed almost 21% of household budgets, costing average Canadian families more than housing and increased more significantly than the cost of living.

Evelyn Jacks is one of Canada's most prolific international authors, speakers, educational publisher and an award-winning entrepreneur, having written 42 books, including the new Master Your Taxes, and the annual Essential Tax Facts series (annual editions in 2005 to 2009), published by The Knowledge Bureau.

The Knowledge Bureau is a national post-secondary educational institute specializing in tax and personal finance courses and certificate training for professionals who practice real wealth management services for their clients.

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Marion Trapp at 1-866-953-4769 or by email: marion@knowledgebureau.com