Well, the elections is over and of course there are mixed feelings. For those whose party won they are ready to move forward with any of their personal issues that the government has an effect on. For those whose party didn’t win they now have to contemplate on whether they have to shift gears with their personal financial planning.
It all started with the Ontario budget being challenged by the opposing parties, but in the end it now seems that this budget is going to move forward as Kathleen Wynn has indicated. So now as a Ontario tax payer what effect does this have on you in regards to your tax obligations?
The crux of the budget is to build economic growth. This is going to take money so does this mean that you will be required to boost your contributions by way of tax dollars? The money has got to come from somewhere if the Liberals are going to institute a balanced budget by 2017/18 and spruce up the infrastructure according to plan.
It would seem that the plan is to only increase taxes on high income earners. Who will specifically come into that classification will remain to be seen. Tax increases will also hit the aviation industry as well as the tobacco industry.
So on the surface this would appear to be good news for the average tax payer. However, don’t forget that whenever tax increases hit a specific industry that cost is going to roll down to their target markets. If you happen to be a business traveller or avid flier then you may end up paying more for your air passage. For those smokers left they will be paying more for their habit. Then if construction companies are no longer allowed to claim their fuel tax exemption, what are the chances that construction costs to to the consumer won’t increase?
Often when looking at a budget and proposed tax hikes, we look at it on the surface and if it doesn’t appear to affect us on a direct level then we become somewhat smug and relieved that we dodged the tax bullet. What we forget about are the indirect effects.
The final outcome should be adopting the attitude that no matter what party is in Government taxes will always exist, and we will always have to pay our way. The best methods for an Ontario tax payer to implement would be smart tax planning and being pro-active in how to put yourself in a solid financial position not only for the present but for the future.
