Tuesday, October 30, 2007

Not Again!

They're buying us off. It is really that simple.

The Federal government has announced plans for $60 Billion in tax cuts:
Finance Minister Jim Flaherty has tabled a motion that calls for $60 billion in personal and corporate tax cuts over the next five years, including a further cut in the GST to five per cent, effective Jan. 1.
NOw I think that tax cuts are always a bad idea. THey always seem to end up benefiting the rich more than the poor. Take teh GST cut for example. Canadians like to hate the GST, have done so ever since it came in almost 20 years ago. It is an irritant. But on reflection I really support the GST. AS a consumption tax it means that those who consume the most pay the most--that means the people in higher income brackets pay the most. But of course that means that they also save the most with this cut.

If governements really want to alter the tax system to benefit low income Canadians I have some suggestions:
  • raise the basic personal exemption (note that they are doing this) -- this helps to raise the floor level income at which people start paying tax -- maybe teh poverty line is a good goal, you earn less than that you pay no income tax and get a much larger GST rebate
  • lower tax rates for lower income people (again this is part of the package)
  • makeit illegal for provincial welfare plans to claw back benefits such as the Child Care credit
  • raise the GST rebate to low income families

The government's own numbers for their proposal show that the higher your income the more you benefit from their plan -- by a factor of 3.

ANd please--lowering corporate tax rates? THat is a priority? THat generally increases corporate profits far more than it encourages job creation.

Mind you I also think the taxing of income trusts was a good thing, that a carbon tax is worth considering, and that a governmental surplus means that the government did not spend enough-not that they collected too much (and don't get me started on the EI surplus).


  1. Not surprisingly, a number of Stephen Harper's cabinet ministers, including Mr. Flaherty, are former members of Mike Harris's cabinet. In case you weren't in Ontario at the time (mid-late 1980s), Gordo, Mike Harris cut a swath of devastation through the province's social safety net that can be favourably compared to General Sherman's destructive path through Georgia in the US Civil War, or Hurricane Katrina's path through New Orleans more recently.

    His legacy lives on in many other ways. The punitive welfare rates, for example, stem directly from him.

  2. But remember Peter I came from the kingdom of Klein--who made Mike look organized and kind.

  3. You're not the sharpest knife in the drawer, eh? What's the one tax that every single Canadian pays? Now we're all paying less of it. More of the money that I earn, I get to keep, and use as I see fit. What an amazing concept. As you correctly noted, the poorest people (those that earn below the minimum taxable income) don't pay income tax. So, a cut in the GST is one of the only ways to affect their daily cash flow, and I don't see how that's a bad thing.

    Though, I can see the benefits of your world: give up all my money, the government would decide what I can buy with it, and presumably I should be happy. On carefull reflection though, I'm not sure I would be.

    And you're right. Harris was a tool. All he did was spend an additional tens of billions of dollars on education, reduce an $11B deficit left by the Rae NDPs, increase healthcare spending, and all the while lowering taxes. What an idiot.

  4. Come and see my Ontario Works students trying to make ends meet on a below-poverty income while trying to concentrate on studying to improve their literacy levels. You can tell them that they're lucky to be paying less GST on necessities of life they can't afford anyway. You can help them choose between paying their heating bill and eating, while you're at it.

  5. You said it, Peter. I totally agree, they're just buying off the public and laughing all the way to the bank.