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The Huron Expositor, 1976-03-18, Page 15are specifically geared to the export market will be forced to cut back operations, which would further increase unemployment in the Province. • $1,400 greater?' Becauses the Federal Government allows taxpayers to deduct, from federal tax payable, 5% of the cost of most new farm machinery or Talk with our FBDB allayment Services Officer who helps small btisinesses help themselves. If you're wondering whether-there's a federal gbverrimpnt program that can assist your business, contact our Management Services Officer who will • tell you what federal programs may suit your needs and put you in touch with the appropriate Offices For Your Area Call W.-.1. Reynolds at 271-5650 (Stratford) or write to: • Federal Business Development Bank 1032 Ontario Street, Stratford, Ontario NSA 6Z3. FEbERAL BUS/NESS DEVELOPMENT BANK GLMFNf SEIVICTS For YoOr ComMercial, Residential ' or Form Wiring , (Free Estimates) • Contact &D Electric' dintervante. Seaforth Also For ASHERS, DRIERS, RANGES] and RIGERATION REPAIRS 6 days 3 after 5:30 pm D M APPLIANCE 1W DOMESTIC REF Phone: 527-06 527-150. (By H. G. Norry) , Area Ce-ordinator Ontario Ministry of Agriculture and food P'rth Dpring the next few weeks, millions of Canadians will be filling out income tax returns for 1975. Most of these will till out their forms approximately correct: Some others will cheat the government and some will cheat themselves. My observations are that farmers who cheat themselves are often those with lower than average incomes. This is logical. A taxpayer who is paying several thousand dollars in tax is more apt to make use of tax-saving techniques than one who is paying little or no tax, Profes- sional tax filers who service small farm accounts often are unable to give personal attention to every return. Those who tile their own retutns are sometimes unaware of opportunities. How can a farmer spot places where changes should be made? , As a beginning look at page 4 of the Income Tax Return. lithe Net Income (line 41) is not at least $1,400 greater than the total of all exemptions and deductions (line 48 plus li 59), the taxpayer is probably cheating himself. True, he will not be paying tax this year but he'may be' missing an opportunity to keep taxes low in some future year. Why $1,400 greater than exemptions and ..deductions? Because there is no. tax on the first, $1,400 of ,taxable income. However, if taxable income is $1,410, there is $63.60 of tax. A consideiation for some is the fact board, as k s H „lea when there is no taxable income, • • thatmn Oan.dH.wl.iPfe.. payments are nil . is $1,000 or less for a single and partial when taxable income • t o. reconsider rates person, 'or $2,000 or leSs for a Junior Farmers play wins Jack's Jottings Energ .A performance of Thornton Wilder's play "The Happy Jour- ney to Trenton and Camden" which was put together by, Seaforth 4H club members in less than a month won Merit 'a third prize at the provincial Junior Farmer drama festival in Fergus last weekend, THE HAPPY JOURNEY — Seaforth Junior Farmers won third prize in a provincial drama festival last week with their performance of The Happy Journeys Their version was done without props and included an imaginary house and car and.a lot of pantomiming from the actors. In a performance for local people last week at SDHS are, from left Gerry O'Reilly, stage martager, Catharine Anne Lane and Casey Van Bake!, runner up for best actor. In the back seat of the "car" was Vanda Storey and Kevin Kale.who received best ac tress and actor nominations. (Staff Photo) Vanda Storey, Caroline, were nominated for best actor and actress awards. Casey was runner up. Others • in 'the cast were Catherine Anne Lane as Ma Kirkby and Joanne Swart as her daughter Beulah. Gerry O'Reilly Was stage manager. Ministry of Agriculture suggests Then why do we say at dst ax cuts for farmer rig.*.voloN'Ese(341.1:0R,. 19z ARLS 14ROSSE„ Complete SerVici • jangitart, 'Doig and Co. Chartered Accountants Resident Partner ARTHUR'W. READ 268 Main St., Exeter Bus. 235-0120 Res. 238=807'5 IT'S NEW.. IT'S HERE NOW! Pnivimi ( „ exclusive, more precise way to feed -- - sankal * '14a carefully formulated re ion that baby pigs, They get more energy and PRIMER lowers your cost of gain while I pig starter producing more uniform litters. And our research shows little or no scouring. Baby pigs really like those tasty, easy-to-eat mini-pellets, lob' The ProvirnVi' Precision Baby Pig Feeding Program featuring PRIMER 1 Baby Pig Pre-Starter and PRIMER 2 Pig Starter is Mere now! Stop in today for all the details. The greatest breakthrough in baby pig nutrition in over 25 years. After extensive research and feeding trials, Proirimk.i, brings you an I FEEUNG PR 0-)Am , pre-staffer PRIMER baby pig Provlmi * (By Jack Riddell, M.P.P.) At the beginning of. February the Ontario Energy Board submitted to the Provincial Minister of Energy• a report on Ontario Hydro's bulk Power rates for 1976: The Board wants Ontario Hydro to reconsider their -.habitual growth ethic, because this "traditional 'approach to power systern planning is, no longer appropriate in North America," This report is actually the second of two parts of the Board's submission to the Province on Hydro's requiest for rate increases this year, The first _part, released last fall, said that Hydro needed a 27% increase in rates this year to maintain its position. However, this 'proposed increase was subsequently 'cut to 22%. • In the second report the energy, Board discusses in some, depth Hydro's procedures and policies, drawing attention to the fact that although development plans have been reduced, future • service to customers has not been . jeopardized in any way., Further cuts and deferments have been announced since the Energy -Board • prepared this report, however, although possible effeceri future customer service hay r not been assessed. ' North American electric utilities have in the past assumed that all electrical demands 'must he met, and generous reserves maintained, in order to prevent possible interruption of service. To date they have bee-n able to raise capital easily and pass on all their costs, while lower unit costs" •fer larger projects have favoured building over-capacity. However, * the economic situation has changed; galloping inflation, high interest rates, rising fuel costs and the need to switch to costly • nuclear generation have' all be contributing factors to this • change. • The Energy Board states categorically that Hydro's,plan to spend more than $14 billion on capital development from 1975 to 1980 is too much for Ontario consumers to accept. During that -period the cost of new generating , capacity would more than double to something like $742 a kilowatt - after two clecaoes of stable costs. The Board called Hydro's margin of reliability , in generating capacity excessive. Two years ago it had urged that Hydro reduce its reserves and depend more on other utilities' reserves and now reiterates this statement. The Board considers Hydro should develop a pattern of wholesale rates "to m inimize wasteful uses Of energy". . "It shoulcralso ensurathat customers who create the need for additional generating capacity should pay their full share of the costs. At present, Hydro has one. rate for demand - the peak rate at which the customers draws power • and one for energy - the volume pf power draft over the year. Adjustn{ents arc made to reflect the needs of individual wholesale customers. The Board considers that Hydro should set a range of wholesale ;' rates and stop apparently a giving 'some customers special treatment. • The Energy Board' has not recommended another Task Force Hydro inquiry, nor has it recommended an examination of future electricity needs for the Province,. as this responsibility has been, given to the royal Commission on Electric Power Planning. The Board does recommend a series of public hearings by itself and any - appropriate inquiries by other agencies, which will examine, among -other matters, the efficiency and 'productivity' of the organization,, the validity Pt medium-term, system expansion plans in terms of realistically required re-Serves and eponomic investment choices the financial policy in • generdl and pricing policy in particular; the economic and social role Ontario Hydro does and should play in the Province and the environmental impact and social costs of Ontario Hydro. Recently Ontario Hydro announced that it intends to trim some $5 billion from, its ten-year expansion programme, which will involve cancellation of Large capital intensive projects, although this reduction is, for the most part, a question of deferrals. However, --this $5 billion only represents 1S.7th of Hydro's planned expansion programme of $35 billion, based on their own demand projections into the 1980s. The proposed expansion programme would generate a reserve capacity of 39% in 1976 and a reserve capacity of some 30°/a by 1981. The Ontario Energy Board has stated 'that the "reserve margins,at least to 1981, h appen to be unusually high", and have recommended that Ontario Hydro take "immediate steps to redete its generating reserve margin". A Select Committee of the Legislature' has been studying Hydro's proposed•i•ate increases. which would have actually doubled price's to the consumer in the next three years. These, increases cannot be regarded as the inevitable result of rising costs or inflation, and are, for the most party' necessary to finance. Hydro's expansion programme, the magnitude of which is incompatible with recent studies . in the United States which indicate that projections of future demands can be very substan- tially reduced by a sensible, programme of conservation, without affecting our standard of living. While domestic consumers 'will be seriously affected by Hydro's excessive rate increases, the inflationary effects , will - undoubtedly seriously damage the economy of the &Aire Province. Production costs will be forced upWards for all Ontario Manufacturers, and severe `demands will be placed on capital - markets, , with the, resultant escalation of interest rates. The competitive 'position - of otir • manufacturing industries which buildings purchased or construe-, led after June 23, 1975. This, deduction is made on page 1 of the form after calculations made 'on page 4. Since this investment tax credit is deducted from federal taxes, 'and/since federal ' taxes are low compared to provincial taxes if taxable income is $1,400 to about $2,000 and high after that, a person eligible for investment-tax credit may choose to saee his investment tax credit for another year if his income is low. In other words, he may.try to hold taxable income below $1,490 if' possible and, if this is not possible, push it up to at least $2,000 avoiding the $1,400 to $2.000 range. What *do we mean "hold it down" or "push it. up"? ISn't it true that income is either there or not there? Yes, income is either there or not there but farmers have means of increasing or decreasing taxable income, some of which are: (1) Livestock Inventory - This is the best tax averagipg' tool farmers ever had, but it must be started, in a year of low income or loss. A livestock farmer can add' to his 'income for the, previous year any amount that he wishes providing it is no greater than the value of livestock on hand. The same amount is an expense for the following year. Thus a farmer who had a jow income or a loss can make_ it appear that he had an income equal to his exemptions plus, $1,400 simply by adding the desired amount to his income. (2) Reducing Basic Herd - Basic herds cannot be increased but they can be decreased by up to 10% in any year. If a basic herd animal is worth $500, a reduction of'bnc animal will result in a $500 reduction in taxable income. Reducing taxable income from' $1,400 to $900 will result in no tax saving at all since there is no tax in either case. Reducing taxable income from $1,900 to $1,400 will result in, tt, saving $185 since fa'xable income is pushed below the $1,400 barrier. 'Reducing taxable income from $3,000 to $2,500'results in a saving of $131; from $5,000 to $4,500 in a saving of $137; and from $10,000 to $9,500 in a sac ing of al 03. (3) Claitning Capital Cost Allowance= taxpayers can claim Capital Cost Allowance (C.C.A.) up to certain maximurn limits but they do not have to claim any. It i$ heartbreaking to see a tax return made; or to see a return where assets being depreciated under Part XVII have been switched to Part XI. If a taxpayer is not planning to claim on all assets, he should'make maximum • claims on Part XVII assets and little or none on Part XI assets. (4) Registered Retirement Savings Plan - Taxable income can be lowered if money is invested in an R.R.S.P. For some this is an excellent idea. For others it is not. A person who is borrowing money at 20% interest ' should use, his money to retire debt. (5) Registered Home Ownership Savings Plan - This is not available to . a person who owns his own home but it is wonderful for young .people who plan to buy a home within a few years. A farmer's son on a Viable farm should receive a share of farm income sufficiently high so that he can make maximum' use of this. This means income up to about $4,300 which is $.1,878 (basic) plus $100 (charitable) plus $1:400 or less plus $1,000. (67) Wages to Family Members - If family members are productively employed, they . should be paid for their efforts even if they 'are required to use the money to buy their oavn clothes. A good annual wage range is $1,300 to $1,900. If • wages are over $2,000 the child becomes an employee rather than . a dependent and monthly deductions for all purposes are required. A wage range of $2,060 to $2,500 is therefore usually avoided. There are ways of legally minimizing taxes other than by earning very little 'money. The suggestions 'above are examples, Avoiding the payment of income tax' is not a good long-term goal. it is far better to increase profits so thaSsmore taxes are required, However, when income is low, farmers -Should consider building up cushions that might prove useful when incomes" improve. Seven counties from across the province competed in the festival. Mime was an important part of the play, directed by Don Melady, who.-won an honourable mention for his choice of the play. Cast members Casey Van Bakel as Pa, Kevin Kale as Arthur and M „,, . Massey Fergustm1 A INCOME TAX PREPARED FaiIners — Businessmen — Individuals — At Reasonable Rates Ronnenberg Insurance Agency Open in Brussels — Tuesday and Friday Only — Ph.'887-6663 Monkton Office Open Monday to. Saturday Noon Phone 347-2241 — Ariy. Time. Phone Early for Appointment and Avoid the Rush Day 887,9269 t isle, 444411444MA stitstit Lim ited14? oval/able inventories until April 30th, 4976 We've got other brand•new bargains in stock at unbelievably low prices. s..t; MODEL. YOU CAN NOW SAVE M.F. 235 Tractor $400 M.F. 255 Tractor $400 M.F. 30 Backhoe Lodder $900 M.F. 711 B Skid Steer Loader $400 RPACMGSGGNSSSERM MACM() Bring this ad in and check all the savings during our Check these savings on new . MP farm tractors under 80 pto horsepower; plus industrial machines! Boyes Farm Supply 527-1257 Seaforth, Ontario