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Weekend Reading – April 27, 2007

Time again for the weekend link fest to other insightful articles/videos around the web:

..our deadline is April 30 but the deadline for filing in the U.S. is April 15,” …self employed taxpayers are not required to file returns until June 15. However, if you are self employed and do owe the government money you are required to pay the balance owing by the April 30 deadline..

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FT About the author: FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.

{ 11 comments… add one }
  • Monty Loree April 28, 2007, 11:41 am

    The Average Canadian Family Spends more on Taxes than the Necessities of Life

    That’s crazy…
    The Federal Gov’t should pay down the debt so that Canadians don’t pay so much tax.

    Personal Finance rules hold the same for big governments.

  • David April 28, 2007, 2:00 pm

    Actually, Monty, Personal Finance rules do not hold the same for big governments, any more than they do for business.

    Debt for government is an investment in our future, and while I agree that it needs to be repaid, there must be balance. The population of Canada has repeatedly made this issue clear, that debt repayment at the cost of necessary infrastructure is not acceptable. Even in Alberta, the government is having to re-invest in infrastructure that was abandoned during the Klein reign. Given the current costs of construction throughout Alberta today, you can imagine the cost to taxpayers this delay has caused.

    You should also consider the source of the CBC report. The Fraser Institute is well known for it’s far right leaning political posturing. In this instance, they chose a period specifically to try and create outrage — our national medicare system was instituted in 1967. Prior to that, those who could afford healthcare did, those who could not, did without. This benefit, now comprises a huge portion of our annual taxes. I, for one, am very satisfied to pay my share of taxes to support such initiatives.

  • Monty Loree April 28, 2007, 2:41 pm

    If a government has a surplus of income, they should pay down the debt… Plain and simple. Keep the same services, but pay down the debt.

    I can’t stand it when the country owes $450 billion, or what ever the current number is..

    Our country gets weaker as we become more indebted to other nations.

    Case in point… the U.S. owes China ALOT of money. I don’t think the chinese are going to be very forgiving if the U.S. should default on payment.

    Being indebted takes a person / country out of control. I like being in control.

    IMO… :)

  • David April 28, 2007, 3:13 pm

    Monty said: “has a surplus of income, they should pay down the debt… Plain and simple.”

    Just like most consumers do…….

    Don’t forget that to a certain extent, today’s debt is paid with tomorrow’s cheaper dollars.

    I think our current federal debt is about $15,000 each.

  • Monty Loree April 28, 2007, 3:19 pm

    David:

    I think our current federal debt is about $15,000 each.

    In contrast, I heard a documentary a few months back that stated many / most chinese People are strong savers because they don’t have a social net to fall back on.

    These people NEED to save money as it’s the only way to sustain themselves. The chinese people have a high savings rate.

    Whereas Canadians have a low savings rate and are in debt federally , provincially and municipally, not to mention personally.

    The Chinese have a poorer lifestyle but, have cash in the bank and little debt.

    Canadians have a much grander life style but are debt ridden and cash poor.

    Which is better?

  • Warren April 29, 2007, 12:51 pm

    Monty,

    The Canadian lifestyle is. You don’t live forever. By no means do I support debt, but look at the US-China comparison as an example:

    The US consumer has a giant house, car, plasma, TV, and debt. The Chinese citizen manufactures these consumer items cheaply and is compensated with US money, and a country (US) that owes them more $$. Who is happier here? Its easy to see how it all came about.

    Also, regarding paying down the Canadian debt, we’ve been doing it on a regular basis for some time now, 10 years maybe? Here’s my problem: as a young person, why should all of my taxes go to paying down debt created by my parents generation and those previous? I want to see some of my tax dollars at work for me, so although fiscal responsibility is important, everything needs to be done in balance.

  • David April 29, 2007, 1:43 pm

    Warren,
    I believe the early years of debt were created during the Trudeau era, that of the early Boomers. If the financial pundits are accurate, the taxes on the wealth transfer from the Boomers as they deflate their accumulated assets to the Bust & Echo generations should pay a lot of the debt. I, like you, hope that the beneficiaries of the debt are the ones to pay it, but also realize that we, too, have benefited from those expenses.

  • Monty Loree April 29, 2007, 3:52 pm

    Hey Warren, David,
    Quote:
    Here’s my problem: as a young person, why should all of my taxes go to paying down debt created by my parents generation and those previous?

    Warren:
    What would you do if the law stated that you had to assume the debts of your parents? Your parents go out and spend $500k on a house, car, boat, cottage, and all of the electronic gadgets.

    Their logic is: “Well, we won’t have to pay for it, we’ll get Warren to pay for it.”

    You would be paying for your parents debt for the rest of your life. You wouldn’t have alot of money to spend on your own life.

    That’s kind of what the Federal debt is like.

    My parents generation (as well as mine) bought into the consumeristic mentality. Buy now, pay later. Now we’re having to pay for that under educated point of view.

    What I am saying is, let’s stop the bleeding here and now so that future generations won’t be bankrupted by our current behaviour.

    The “what about me” philosophy is what got us into this problem in the first place.

    What I’m trying to propose is that we start paying down the debt even more aggressively so that we can leave our children with less to 0 debt.

    In my opinion, that would be a better legacy than $489 billion in debt.

    Debt is a relatively new topic and is something that is going to have be learned the hard way, It will probably take a few generations to learn this lesson.

  • Warren May 1, 2007, 9:42 am

    Monty,

    I think we can agree to disagree. I’d love to see no federal debt in my lifetime, but not at the expense of my quality of living. I’m satisfied to pay it slowly, have its value eroade gradually (through inflation). Frankly if it never increases, I’m happy.

  • Monty Loree May 1, 2007, 11:40 am

    My final thought on this thread,

    Warren,
    I understand your logic completely. When I was in my twenties I thought like you.

    I look at it like this.
    When you’re twenty, carrying a 50 lb weight on your back is easy. You’ve got energy and good muscle form.

    After carrying the weight around for 20+ years, you get really tired of carrying it and because of age, have trouble supporting it.

    Debt is the same way. It’s fun while you’re young, but it gets increasingly more cumbersome as you get older. After you get to a certain age debt can be debilitating.

    Enjoy debt now while you’re young :)

  • David May 1, 2007, 12:12 pm

    Monty said: “Warren:
    What would you do if the law stated that you had to assume the debts of your parents? Your parents go out and spend $500k on a house, car, boat, cottage, and all of the electronic gadgets.”

    So, let’s change it a bit. Your parents have a business in which they have invested, and either have a sizeable loan or shareholders. This family business is doing very well, and over the years has paid for all your family’s necessities, has paid for your education, given you summer jobs, learning opportunities, a permanent job, and now, as the ‘old man’ is ready to retire, you learn that all the while he has been grooming you in preparation for taking over the family business. With this opportunity, he is also going to transfer the outstanding loans to you.

    You have the education, knowledge, experience and interest to operate this company, and believe it will be as finincally successful for you as your parents.

    DO YOU ACCEPT THE DEBT?

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