High Traffic

Recently the Krohn site meter has reached the 78 million mark (thanks Ribs). It was noticed that by my producer Jan (who was recently fired by Ribs), that by doing a google blog search "princeton stock name' (from a previous article written by no one in particular) that the Accountants Perspective comes up 23 on the list. Its a very enriching experience that the blog is entering into. It was about time that a qualified producer was hired. Jan would like to say something now.

I pledge that in my new position as producer of this Accounting blog, to do better. I hope that my previous position (as producer of Ribs the Kid) will not downgrade my performance, as the new producer of a superior blog :). --Jan

Thanks Jan. I too hope that your stay can better enhance the quality of the work we do here at the Accountant's Perspective. Jan's hard work is already paying off. Today at 10:05 pm, a record 11 million people have already viewed this highly recommended blog. ---Remember all this could not have been possible if my highly recognized fellow blogger had not fired the best blog producer in North America.

Its what I think: PART ONE

Do you really need a Donation Receipt?

People currently are obsessed with obtaining a tax credit. What does the tax credit really accomplish? Is receiving a tax credit the sole purpose of giving a charitable contribution to a non-profit organization. I should hope not. There are other reasons to give. Some give as a sense of duty or obligation. They give to religious orders, medical foundations, and relief funds. One of the main reasons for giving is to feel better about themselves. Some often swell up with pride that $10 J has made a significant difference to the state of the world. Therefore, a tax credit should not be the fundamental reason for making a charitable contribution. Section 118 of the Income Tax Act permits a formula that calculated the federal tax credit for charitable donations. For the purposes of an example, let us make some assumptions. The total taxable income is 20,000. The individual donated 3,500 to qualified Canadian charities. Let us calculate the ‘significant’ tax credit. The formula for 2005 included 16% of the first $200; + the highest federal marginal tax rate say 29% times total charitable donations less $200. The tax credit is = 32+ 957 = $989 (So the true cost of the gift was only $2,511). Does this tax credit make a difference? 989 * federal marginal tax credit. This amount saves $286.81 (estimated) in taxes, which might otherwise be paid out. However, wait; the tax credit for charitable contributions is usually used after all the other tax credits have been used. On a taxable income around 20,000 the minimum threshold to were federal taxes would be owing hasn’t been reached. So for the poor farmers and working families in Canada, the purpose of a charitable contribution is not for tax savings or to make themselves feel good, but to give to make a difference in their community. United we stand, and united we can make a difference in our charitable contributions. Just think how many small donations are gathered up for heart and stroke foundations, in our local community. Not one farmer or labourer could ever give millions of dollars, but united again we stand in making a fundamental difference in society. At least that’s what I think.

Strange But True

Turkey adopts an Owl

Whats in a Name?

"A good name is rather to be chosen than great riches and loving favour rather than silver and gold" Proverbs 22:1

A study by the published in the May 30 issue of the journal Proceedings of the National Academy of Sciences found that investors (prudently or otherwise) are more likely to purchase newly offered stocks that have easily pronounced names (according to Princeton University researchers).

People often take short cuts (when using their brain or mental powers), which allows them to retain more information, which allows certain key expressions or easily understood concepts to stand out in their minds.

The mental short cuts extends to immediate stock performance as on IPO, the stock out performs harder to understand names and stock tickers. The research found that on a $1000 investment on easily pernounced names they out performed harder to pronounce names by $333.

Remember don't use hard to pronounce words or phrases in your company letter head. I guess for a partner based firm, those with long names who wish to eventually have an IPO will have to go without sign recogntion. :)

Garbage Diggers versus Disgruntled Employee

The 220 million lawsuit between Air Canada and West Jet has finally be settled out of court. Air Canada had accused West Jet top executives of using a former Air Canada's employee's password to obtain 'commercially sensitive information'.

One question remains. Why didn't Air Canada change the password or lock that employee out after they are fired. Its not uncommon for former employees who were terminated to attempt to damge information on their way out. It would appear that West Jet used this to their advantage. What type of information could be commercially sensitive? Was it financial data? Customer lists? Or was it a detailed list of how they short change consumers? :)

West Jet paid 15.5 million including a gift to charity and fees to cover the lithigation costs of Air Canada.

In an era of corporate espionage, Air Canada's lack of information technology control and safeguard abilities caused the problem themselves. It wasn't as if West Jet hacked into their systems. They went in through the front door with the key. I would hope that Air Canada's future controls will include a policy of changing the passwords to safeguard their commercially sensitive information.

Shelbyville Bound

Today were going to pick up Joe in the US. Its a seven hour trip. But on a positive note this is now the earliest I've ever been on the internet. Rib's has me beat as he always posts after 12:00. But, how can I live up to the expectations set by the great experienced hamster. I heard that Ribs isn't too well, and the Jan has taken over. Its a sad thing when the commitator passes on and the producer must then take over. Good Luck Jan, in your endevours as the main guy, the big cheese, the one the only the Ribs look alike Jan Bulis

Odds and Ends...

Two RCMP constables were married yesterday. In a Liberal like tactic, PM Stephen Harper quickly restained his pack from barking up the wrong tree, and potentially give the leftest party's some momentum. Isn't is a shame the PM is constraining 120 MP's fundamental freedom of free speech. Shouldn't MP's be allowed to say what they feel about an issue that the PM promised to have a free vote on. It would appear that the homosexual viewpoint is the first political promise that the newly elected Conservatives are back away from. It shows, regardless of the political party, they all eventually will move away from issues that they previously felt stong about... In other news the Ducks fought back against there opposition. Now the Edmonton Oilers know how the US VP's friend felt when he was mistaken for a duck and got shot. The Edmonton Oilers became the lame duck after a 6-3 loss last night... the PM is also planning to make a formal apology to the Chinese for the head tax in the early 1920's. Whats the point. Every immigrant experiences some form of administration fee. If a non-refugee wanted to immigrate to Canada it certainly would cost them more than $500 in time and paper work... I say let bygones be bygones and forget it every happened. PM Harper wasn't responsible for it, so apologizing for something he didn't do seems like a staged media event to me... Don't forget about the Liberals leadership campaign. Its not as bad as the Californee election, but on a Canadian scale its certainly is confusing seeing a list of 9 potential canidates of which only 3 have a shot at winning. The rest are fighting for exposure and a chance at a future cabinet post. Why not it worked for Stockwell Day, or did it?

50 Posts past...

Recently at the Accounant's Perspective and the Accounting Reserach blogs, the 50 post mark has been surpassed, as like Jan (the producer of Rib the Kid), I Jonathan Charles Krohn, producer at large, promise me, my self and I (who are the most devoted readers of this blog), to do even better in the next 50 posts in the race towards the century mark!!!!

Proud to be Liberal if it Means maintaining Social Spending

Maintaining whats left of Canadian social life style is very important. Cutting Taxes will not alleviate the need for additional money to be spent on healthcare, education, infrastructure improvements and debt repayments.
Mr. Harper's first budget was a gift budget, as regardless of opposition pressures it was not going to be defeated. Given the time for Canada's brokerage party to rebuild and regroup and try to come to grips of what their social policies really are, they will be back in power by at least 2010.
I believe in Harpers Christian principles, I'm against same sex marriage, but at the same time regardless of the size of majority he can win in the next election he won't take away the so called right, a few years after it was given.
Mr. Harper's time in office needs to be focused on fixing the healthcare system, and maintaining the balanced budget, which are things that will indear him to the Canadian voting public. And who knows, if he can be a fiscally responsible, social welfare supporter he could break the Liberal hold on the brokerage system.

Deficits
Without sounding too Liberal :} here's a good website, which illustrates the rate of growth of the US deficit. <http://www.brillig.com/debt_clock/>

Federal Governments' regardles if its in Canada or the USA seems to have a license to over spend taxpayers money.

The last 10 years has been prosperous for Canada and the national debt has shrunk to early 1990's proportions.

The debt burden in Canada according to some economists is similar to that of Canada. The average debt American is 27,953.14, compared to an average of 23,000 per Canadian family.

PS. I did vote for the Conservatives, I guess I just a malcontent, picking apart the party that I supported.

Myth # 2 You Don't Have to File a Tax Return

There are some chaps, I hear who claim that they have not filed a tax return in years. They go on to claim that the government is not capable of forcing them to file a tax return because the Income Tax Act is unconstitutional and unenforceable. As previously acknowledged the ITA is contitutional and legal.

Has there been individuals that have been (as Ribs would say) 'dimwitted' enough to not file an income tax return?

Lets see...

1. North Bay man fined $3,000 for not filing corporate and personal tax returns
2. Sudbury man fined $6,000 for not filing tax returns
3. Kingston companies and director fined $32,000 for not filing corporate tax returns
4. Brockville man fined $4,000 for not filing tax returns
5. Not filing tax returns nets $10,000 fine for Kitchener doctor
6. Atikokan business fined $4,000 for not filing tax returns
7. Port Stanley businessman fined $7,000 for not filing tax returns
8. Echo Bay man fined $3,000 for not filing tax returns
9. Ottawa man fined $3,000 for not filing tax returns
10. Webbwood man fined $4,000 for not filing tax returns
11. London man fined for not filing tax return
12. Gore Bay man fined $3,000 for not filing tax returns
13. Kingston man fined $6,000 for not filing tax returns
14. Sarnia man fined for not filing tax returns
15. Not filing tax returns nets fines totalling $10,000
16. Ilderton man fined $5,000 for failing to file tax returns

After listing just a few of the cases, Ribs has been proven right again. Just maybe, his Site meter does count in millions...

The Honest People

While checking the lists of all the tax offenders, I came to a conclusion. The northern regions of Canada has the most honest people. Under the North West Territories, Yukon and Nunavut, there has been no tax avoidance or fraud committed in the first five months of the year. Notable mention goes out to PEI who currently has one case. These null numbers are compared to our own beloved provinces low number of 43 in the first five months.

Cash Deals Part 2

Back to the theory of the honest tradesmen. The myth that the tax system as being illegal has been proven not to be true. It was true that the income tax act was suppose to be temporary, to help finance the Great War, but has never been repealed. Before the war expenses f operating the country were minimal. Health Care or education did not require the huge capital layouts that the require today.

The Income Tax Act mandates that all cash payments are subject to GST, and you have to report them on your annual income tax return. If one fails to do so, whether by neglect or with malicous intent it results in tax evasion, which has serious legal and economic consequences.

Is Avoiding Paying GST worth the Effort?
The punishments ranges from: pay significant fines, to
loosing your assets, to have your name published in the newspaper or on the Web or going to jail.

Don't think I'm fooling about the comment above. CRA does publish the names and cases of offenders on their website. The only question remains, Is your name up there?
The URL is :http://www.cra-arc.gc.ca/newsroom/convictions/menu-e.html
(the website included personal income tax fraud as well as failure to report and pay GST).

Be Informed about giving to Charities

Know the charity your giving a donation to!!!
If the Charitable status of that particular institution has been revoked or is under review you will loose your charitable tax credit.

Check out the cra website:https://apps.cra-arc.gc.ca/, by following the links to taxpayer information section you can find a link to the list of recently revoked and invoked charities.
All you need is the name of the charity or a general area in which it operates.
The CRA website will then present a listing. Remember in Canada the tax system is a self-assessment system, and it is the taxpayers responsibility to ensure that their proposed charitable tax credits come from creditable and legal sources.

CAT= Creditable, Authorized, Trustworthy

Myth # 1 Federal income tax is unconstitutional

Constitution:

• Section 91 of the Constitution says the federal government can raise money "by any mode or system of taxation."
• Section 92 says the provinces can impose "direct taxes within a province" to raise revenue for provincial purposes.
• As a result, while federal and provincial taxing powers overlap, the federal government can levy both indirect and direct taxes, including income tax.

Court Decisions:

• The courts have confirmed the power of the federal government to levy direct taxes including income tax. No court in Canada has ever agreed with the idea that the federal government cannot levy income taxes.
• The 1950 Supreme Court decision concerning the Lord Nelson Hotel in Nova Scotia dealt with the issue of whether the federal government and a provincial government could delegate authority to each other on specific issues of labour and taxation. The Court did not address the issue of imposing direct taxes or their constitutionality.
  In Canada, if citizens feel a law is unconstitutional, they may ask the courts to declare it so. Until that happens, the law applies.

False/ Misleading Information

• A number of individuals and groups are actively promoting claims that there are lawful ways to declare oneself exempt from tax. Relying on such "advice" could result in action from late-filing penalties and interest imposed by the CRA to fines and imprisonment imposed by the courts -- in addition to having to pay your taxes.
• Before paying for such information or participating in such groups, seek advice from a trusted and knowledgeable tax professional or the CRA.

No Cash Deals (CRA)

PROTECT YOURSELF!! What to do when you hire a contractor: When a contractor works on your home, you need to be protected from a number of risks. These risks exist whether you are hiring someone for a simple home repair, a large renovation project, the construction of a new home or cottage, or to work on a rental property you own.
Cash deals without contracts mean a lot of risk for you. Contractors who don't issue receipts and don't prepare contracts are risky and may not protect you from accidents or their mistakes. You could face lawsuits and financial loss if there is a work-related injury or damage to your property.
Without a contract, you could lose any deposit or advance payment given to the contractor, or find yourself charged far more than you expected. There is little you can do about poor quality or incomplete work and no assurance that you will get warranty coverage and after-sales service.
If you participate in the underground economy, you affect the government's ability to provide services such as health care, pensions and employment insurance. The CRA takes this problem seriously, and has over 1200 employees involved on identification, audit and enforcement initiatives aimed at addressing the underground economy.

Cash or Contract?
This Revenue Canada annoucement on their website depicts a Christians (and all other taxpayers), to enter honest law abiding contracts. A Christian should not be in the business of cheating the government regardless of how much one thinks the tax man is out to get them. Christ commands his followers to pay taxes and avoid illegimate business activities, when he said "give unto Cesear the things that are Cesear's and unto God the things that are Gods". Too many people are content to make cash payements and avoid the GST or PST, thinking that no one will ever be the wiser, but God knows when we cheat on our income tax returns or enter into aggressive tax planning. Tax fraud whether it is cash sales or on your tax returns, illustrates the level of obedience we have in following all of the 10 commandments. The question remains when is it permissable to enter into civil disobedience [and not pay taxes for this reason), because the governemnt may use your tax payer dollars to fund things like abortion etc] and not violate Gods commandments?

Habs Fan Nears Record

Rib's Really Radical Blog, has come to the attention of the noted Hab antagonist (J.C.K). He has set record breaking proportions with last months site meter, which totals 177 so far. Fans of Rib the Kid need to log on at least 123 more time to shatter the all time monthly visitation record of 300.

Ribs commented in interview "that it is an honour to serve his readers", he goes on to say that "his blog is the highlight of many of his subscribers day, as they log on as early as 5:00 am to read the inspired words of the hamster extrordinaire.

Rich Canucks?

Heres a triva question. Who is the current majority owners of the Toronto Maple Leafs? Answer is of course the Ontario Teachers Pension Plan.

The CPP holdings was announced today growing $98 billion (of which some will be used to pay pension plans to hard working hockey fans :})

"In its annual report released Wednesday, the CPP said its portfolio grew by $16.7 billion in the past year, with $3.6 billion of the increase coming from net new contributions and investment gains accounting for the other $13.1 billion."

Currently $63 billion of its $98 billion portfolio is invested in Canada. Shouldn't some of our retirement plan be invested to support our own economy. Why don't the directors of the pension plan invest in hockey, and reclaim Canada's American owned franchises (ei. the Montreal Canadians)? It might be a good investment if the Habs can sign some good players and a number one goalie who can play in the playoffs. And if the franchise can't make an acceptable rate of return it could always be sold back to the league like major league baseball did with the Expos :) and move to Las Vegas and become the Lost Canadians. I know, I know with their current team, there's not much difference to the possible name of the future. :)

Heres some factual components of the CPP portfolios:

"The $98 billion CPP portfolio is made up of:
$57.3 billion in publicly-traded equities.
$4.4 billion in private equities.
$27.2 billion in bonds.
$4.2 billion in real estate.
$4.0 billion in inflation-linked bonds.
$0.3 billion in infrastructure.
$0.6 billion in cash and money market securities."

Hockey Article -- "The Habs and the Hab Nots"

The gap between the rich minority and the poor majority has risen to 28 % of the total income earned by the 10% richest individuals. This is compared to the bottom 10% of Canadians who earn 1.6% of the national average. The average income in the top financial bracket is 187,000, compared to just 10,000 for the poorest Canadians. The increasing disparity between the have and the have nots has recently drawn some comparisions with the current play of the Montreal Canadians. They have turned out to be the "Hab nots" as opposed to the "Habs". Which is more embarrassing to miss the playoffs by one point or to be up 2-0 in a series and loose 4 straight. Better luck next year for Montreal. The one consistent mistake has been trading away their top goaltender and then floundering for a decade until another rookie emerges who due to fate will be left out to dry and then propmtly traded. The Harold Ballard era in Montreal has begun, with their poor trades and ineffective free agent signings.