Saving tax better
than saving money

BUSINESS

HOW WOULD you like an early Christmas present? Here
is yet another benefit of reading the North Shore News — a
$9 gift that won’t cost you a cent but could save you dollars

for years to come.

For a phone call, you can
receive a free (love that word!)
copy of the current issue of The
Canadian Taxpayer. The 1! arti-
cles include:
© Year-end tax-planning tips.

e Ways to fund sabbaticals and
save tax at the same time.

eLuxury cars: careful planning
produces tax breaks.

t's an exclusive offer for
readers of this column. Naturally,
Richard De Boo Publishers hopes
many of those who reccive this free
copy will subscribe (at $225 for a
24-issue year). But there is no
obligation.

dollars
and sense

Michael Grenby
SS

So for your free copy, phone 1-
800-268-7625 between 5:30 a.m.
and 1:30 p.m.

The Canadian Taxpayer, an
eight-page newsletter, was started
(in 1979) and is edited by Arthur
Drache, a 50-year-old Ottawa tax
lawyer and columnist who has
authored/co-authored a dozen
books. A Queen’s Counsel, Drache
also teaches at Queen’s University
and lectures extensively.

“sA dollar of tax saved is worth
far more than a dollar earned,’’ he
said in an interview.

“If you earn $100 or even in-
crease your investment return by
$100, you still have to pay on that
extra income. But if you reduce the
tax you have to pay on those earn-
ings by $100, you get to keep all
$100."

Saving tax is better than simply
saving money, said Drache.

“If you decide not to go out for
dinner, you save the money — but
you give up the pleasure of eating
out,” he said.

“Tax, on the other hand, is a
non-discretionary expense. So
when you save tax, you don’t have
to sacrifice anything.’’

Drache said the two main tax-
saving techniques are deferral (typ-
ically through RRSP, RESP, pen-
sion plan, incorporation) and in-

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come-splitting (also through many
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cluding the spousal RRSP, split-
ting CPP and even having a high-
tax-bracket spouse buy a low-tax-
bracket: spouse’s jewelry to. shift
investment capital to the lower tax
bracket).

“Know the rules — but don’t be
timid,"’ Drache said.

“And move now for year-end

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tax planning. By this stage of the J VANCOUVER 5701 Granville St. at 41st Ave.
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rate guess about your 1989 tax bill
— and take steps to lessen the bite.
“Even if you only find you
should have done some planning
sooner, chat realization can pay off
if it motivates you to take some
steps now to save tax in the years
ahead.”
t asked Drache what he con-
See Tips
Page 32

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31 - Wednesday, November 8, 1989 - North Shore News