W'I FÉÉPES! WlimNESDAY, FEBRUARY7,! 1990, PAGE, 19 AX TIME TAX TIME TAX TIME TAX IME TAX TIME TAX TIME TA More for ail On average, Canadians worked for government just over half the year in 1989 and kept less than'half of what they made for themselves, accord- ing to Vancouver's Fraser In- stitute. "Tax freedom day," when the tax bill was paid for the year, was calculated to have oc- curred on July 3, on average. This year things will be worse, as the taxmen's grip tightens across the land, the think-tank group believes. As for 1991, it's best not to think about how late in the year it will be when the total tax bill is paid if the Goods and Services Tax actually happens as scheduled on Jan.1, 1991. than taxi Fraser director Michael Walker says, "Since 1961, tax freedom day has moved from May 4 to July 3, and so taxation has become a much more sig- nificant economic phenomenon in that period." Calculated sînce mid-'70s The institute began calculat- ing the individual tax burden in the mid-1970s, when run- away inflation was the main topic of debate. Walker said it soon became clear government spending far outstripped the rate of inflation. "We want people to be aware of the extent to which they are responsible for the generosity that periodically govemments haIft bIll year's announce. Wre never going to deal with the expenditure side of government, which is the main problem, unless people become aware ofwhat the costs of that spending are." If Canadiaps actually had to pay all their taxes - from in- come, sales and property taxes to umport duties and medical levies - on tax freedom day, they'd beless tolerant of'expen- sive government programs, Walker said. As it is, the average Canadian already pays 50.2 per cent of income in a vast array of hid- den and direct taxes - some 51 different categories ineluded in the Fraser tax freedom day cal- culation. Deposit Insurance protects your $ Given several fin'ancial fail- ures in recentyears, it'salways reassuring to know your deposits*are fully protected. Most'deposits in financial in- stitutions are in fact protected. But not all. So it makes eminent good sense to check out the status of your hard- earned dollars in case some- thing goes wrong where they live. The main protective agency is the Canada Deposit Insurance Corp. (CDIC), the federal govemment agency set up to insure certain deposits held by member institutions. They in- clude all banks and all trust and loan companies chartered federally. In addition, provin- cially incorporated trust and loan companies may apply to join CIDC or the Quebec Deposit Insurance Board and many, but not all, have done so. Not all types of deposits are covered. Specifically, only those available on demand or within five years are protected and stocks, bonds, mortgages, mutual funds and foreign deposits are NOT covered. Each insured account is covered to a maximum of $60,000 but you can increase the coverage by spreading the funds among several accounts in other names - that of your spouse and/or a joint account. But if that's not enough, you'il have to transfer some funds to another institution entirely, not another branch of the same institution. $60,000 llmft Includes Insurance Remember · too that the $60,000 limit includes interest, so ifit puts the account over the top, the excess isn't covered. You should alsobe aware that not all RRSPs and RRIFs are covered - only those at in- sured institutions. So an RRSP containing mutual funds isn't covered because mutual funds are insurable. Likewise, RRSPs bought through life in- surance companies aren't in- sured because these companies can't be CDIC or QDIB mem- bers. When an insured institution takes your money for an unin sured investment, it must stamp the paperwork with a notice to say so. But beware - this rule doesn't apply to companies that are only affiliated with an insured firm. You can see the danger of con- fusion and misunderstanding because such companies often have similar names and logos as their parents. Other types of institutions such as credit unions, caisses populaires and provincial co- operatives are regulated by the provinces and each province has deposit protection require- ments of its own in place. But you should certainly check these out before you commit funds. For more information on provincial deposit insurance and different stabilization funds, contact the government department concerned. Or con- tact the CDIC at Box 2340, Sta- tion D, 320 Queen St. W, Ot- tawa, Ont. KIP 5W5 1-800- 267-1999. |Net worth calculation helps you chart Just as every business has a balance sheet, every in- dividual, or at least every family, should have a net worth statement - a list of all assets and liabilities to show how much the house- hold is worth. , There are several good prac- tical reasons for knowing where you stand. First, you can make better use of your income and maintain better control of expenditures as you have a clear idea ofwliat you own and what you owe. Secondly, knowing what's left over after deducting cur- rent liabilities provides a strong incentive to save and as you see your net worth in- crease, you'll be encouraged financial i to help it grow more. Knowledge of your net worth is also an essential component of all financial planning. How else can you judge what to set aside for buying a home, to pay for children's education, to es- tablish your own business, to plan investments and to look ahead to retirement years? A net worth statement is also needed for estate plan- ning. Everyone needs a will and to know what's going to be left befure deciding how the estate is to be broken up. Futhermore, if you borrnw cash or arrange a mortgage, you'll have to give the lender an accurate and up-to-date account of existing assets and progress liabilities. How much you have will govern how much you can borrow. Then in the future, you should plan to update your net worth statement annual- ly. In the process, it's not ab- solutely essential to obtain reappraisals of valuable per- sonal property each year. But it probably makes sense to have jewelry, art and anti- ques looked at by an expert every three years. Your bank or trust company will probably have a folder to give you pointers on how to calculate net worth. Your local credit union also has an excellent little free guide, in- cluding a sample form, in the "Financial Fitness" series. work yments Furthermore, no one escapes, Walker said. Even Albertans, who have no provincial sales tax, paid $1,863 in federal sales taxes on averaze in 1988. Walker said. "The reality is that the under- ground economy, which we es- timate to have grown in leaps and bounds in recent years, is in part a reflection of the tax bill" because people avoided taxes by working for unre- corded cash payments or bar- tering services, Walker said. He estimated such under- ground business has grown to $80 billion from nearly zero in the 1950s and in the future, "creeping taxation may funda- mentally change the way Canadians do.business." "Let me help you choose the RRSP that's right for you. • All options available • Competitive rates • Transfers accepted RRSPloans HERB TRAN 725-6564 The Mutuai Group Facng Tomorrow Togetner bcensea Mw ooCaaMutuat Lis aofC8nadLMumainvestcainc.. NWOm ooihe Mutuai Grouo THE 1989 TAX YEAR IS THE LAST YEAR TO ROLL OVER CANADA PENSION PLAN AND OLD AGE SECURITY INTO YOUR RRSP. WE OFFER YEAR ROUND SERVICE For your personal • INCOME TAX & confidential • BOOKKEEPING appointment • FINANCIAI cail 430-1166. STATEMENTS MON. - SAT 9:30-5:00 EVENINGS BY APPT. 965 DUNDAS ST. W., Suite 205 West Lynde Plaza AMPLE PARKING Your "RS"'P Short-Changin! Your Future? In the latest year, Trimark Canadian Fund investors eamed Ltes» 3 &- 1;yVir perfcpmtince c Novt-x.einher0191wa.u oe.pectîvelv. Oi cour.e. past performance is. noL necesarilv indicative of future fresultN. *2291%, TRIMOAK FAMILY OF MUTUAL FUNDS TPA INVESTMENT PLANNING CENTRE 122 Athol Street Whitby: 666-0896 - ----~---- - -- - ---, i Q Please contact me with information on TRIMARK RRSP's Name Address 1 City Postal Code i Phone Number (___ MaITo & INVESTMENT PLANNING INC. 122 St Whitby, Ontario. L1NY9 666--8. ýffl 1