Wednesday, November 26, 2014



Let me tell you two stories, one more a horror than a tale, before my argument that Canada would be a fairer tax regime if the feds, abetted in its errors by the provinces, actually compensated us fully for our health costs and charity contributions.
Several years ago, returning happily from a Florida vacation, I descended on April Fool's Day into three months of hell in two American and two Toronto hospitals. I described it in a Toronto Sun series and some blogs.
What I never detailed was that TIC Travel Insurance refused to pay $85,000 in charges from West Virginia hospitals, air ambulance, paramedics and specialists, including a $55 x-ray charge from some jerk who was the first to send collection agencies after me.
TIC never told me about the refusal, just the health ministry who told me five months later. When the case by TIC finally shredded (like the tissues I was billed for in the U.S. hospitals) due to the support of my doctors and an assault of my letters, I had been out of  hospital for six months and had learned to walk again.
As I consulted my doctors and lawyers, they warned me about writing too much about it in case I gave ammunition to TIC and indeed the entire industry which is notorious for welshing and bluffing.
 The only thing that comforted me during the ordeal was my assumption that I would have a hell of an income tax deduction. I must have been more delirious than I thought because as most of us know when we're not impriosned in hospital beds, I would have been lucky to recover $22,000 of the $85,000. Thanks to the dunderheads of the CRA and their federal masters.
It was several years before that when for a number of reasons, including a generous mood that uncharacteristically lasted,  I had one of those years where you end up donating far more to the United Way, cancer, heart, Salvation Army, churches, hospitals, marathons etc. than you realize.
 I have a freelance income, so for years I have gone to accountants for filing our income tax after I spend long evenings sifting and sorting and adding and hunting odd pieces of paper. Besides, the gobbledygook laughingly provided by the Canada Revenue Agency as a "helpful guide" becomes as obscure as my high school Latin whenever I leave the beaten track of calculations.
So that April I showed up at the accountant's and waited with pleased anticipation as he fingered his computer and calculator and even an adding machine to tell me how much more Mary and I would be  getting back.
 How dumb can you be in a country where politicians seize half of every dollar you earn.!
The gloomy result was that both of us owed thousands. I had forgotten, of course, that just like the percentage games with health care receipts, you only get a slice back of charity contributions.
 Of course the pols treat political donations more kindly and give a better break if  you're dumb enough to contribute, say, to the bloody socialists. But not to the Sally Ann which does more for the poor of Canada than the NDP.
Let me propose what you and I can do about this.
 For starters, no political contributions.
Second, we demand that for the self-employed and pensioners who pay their own health insurance premiums, we are allowed to deduct the full amount without any weasel percentages.
And while the feds are at it, complete reimbursement of dental charges. They are too high, a disgrace throughout the country. As a result,  insurance companies wiggle out of paying in full for every procedure or just don't pay at all.
Why should these changes be made?
Because it is in the interest of the country that as many people as possible have health insurance. For pensioners like me who continued the company plan, it is a large cost, in my case around $5,400 annually. That causes people to cancel the plans, which is not helpful or healthy for the country or for them.
Then there are all those dental bills that aren't covered, yet OHIP saves money whenever people avoid having a ruined mouth that pump poison into the system.
As for charitable giving, the present limits are a farce. The federal rules should be tough enough so that every charity must prove its public benefit beyond doubt. And when it does, surely then it is to the advantage of us all that it can get all the private donations possible to continue its beneficial work.
It doesn't happen now because the CRA is Scrooge 365 days a year. and not just on Christmas Eve.
I laugh whenever accountants,  CRA and business magazines remind us of the "wonderful" way we can avoid capital gains tax by donating the stock directly to the charity. So we don't have to pay the capital gains on half of the increase in the value of the stock. And we get a charity deduction for the full amount, what we paid to buy the stock plus the amount the stock increased.
Now if only that charity deduction was treated differently than all the others you get from the church or the United Way. But it isn't. So in the process of avoiding the capital gains, you also donate all the money you spent acquiring the stock. Good for the charity, and the CRA looks benevolent, but since charity donations are gutted by those percentage limits, you aren't as well off as you should be for your charity.
The lord helps those who help themselves is an expression that has reverberated through the ages. But in Canada, the CRA and its political masters are dumb enough - as the financial overlords of taxation - to interfere with those who want to help themselves, and others at the same time, when it comes to health and charity.
It is obvious that if we weren't cheated on the value of our contributions, premiums and payments, solid middle class Canucks would spend more in these areas.
That would be good for the people, good for the country, but not, apparently for the politicians and their collection agency.

1 comment:

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