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).