The Ontario government’s latest effort to slash taxes for low- and moderate-income investors who hold stocks that pay dividends is all booster and no payload, according to one financial planner.
“To me, it’s a little more fluff than benefit,” says financial planner Doug McCaw, managing director of Stonegate Private Council. “On paper it may look good, but who is it actually going to help.”
The tax break - announced by Finance Minister Charles Sousa Thursday during an economic update outlining how the province will eliminate an $11.7 billion deficit by 2017-18 - will save shareholders, including about 300,000 seniors, an average of $145 annually, reported the Canadian Press. Investors exempt from paying the Ontario’s income surtax, which applies to those earning incomes above $70,000, will benefit from the measure.
Though reducing taxes is never a bad thing, McCaw says, he questions the motivation behind the Liberal’s move and feels the decision could be discriminatory against higher-income earners who won't be able to take advantage of the tax relief. In fact, about 100,000 of them will be paying more to offset the increased tax credits to others, according to reports. (Continued on Page 2.)