Income taxes going up - and spending, too

"Once all the hullabaloo about Finance Minister Wilson's April 27 budget died down (or was it an April 26 budget?), the pain of the budget papers began to sink in. Individuals and corporations will have to dig deeper and pay more taxes - and government will continue to dig deeper and spend more. The irony of the situation is that higher tax rates actually make flow-through shares more attractive as a tax-deferral investment - a bittersweet ""bravo"" for the mining industry.INTRODUCTIONFor the first time in Canadian history, a major budget address has taken two days to deliver. Of course, it's not a case of long-windedness, but rather a case of a hastily called press announcement on April 26 in response to a budget leak, followed by a formal budget speech on April 27.The general reaction of the business community to the budget was to the effect that the tax hikes are acceptable, but the government's failure to curb spending is less than acceptable. Mr. Wilson's reported response indicated that the government had never promised to cut spending, and that increased government spending would actually benefit the country. That age-old debate will doubtlessly continue for generations.In any event, three noteworthy components of the budget papers are:• Personal income tax rates increase effective July I, 1989;• A ""large corporations tax"" (in effect 'a corporate ""minimum tax"") is effective July I, 1989; and• Federal sales tax increases are effective from June 30, 1989, to be replaced by a national sales tax in 1991.A brief overview of these and other budget proposals follows."