Op-ed
Article by Revenue Minister John McCallum:
Revenue
Minister John McCallum Condemns Conservative Tax Hike
Stephen
Harper has admitted he will raise personal income taxes if he forms
government. This should give
Canadians cause for concern.
This
fall the Liberal government introduced a tax cut for low and middle income
Canadians. We reduced the lowest marginal rate to 15 per cent from 16 per
cent and increased the basic personal exemption by $500. The tax cuts are
retroactive to January 1, 2005, meaning Canadians will see these tax
changes this year.
Increasing
the basic personal exemption means hundreds of thousands of low-income
Canadians don’t have to pay tax this year.
Combined with lowering the lowest marginal tax rate, this means
Canadians will save over $5 billion in taxes this year.
But
if Mr. Harper is elected, he will reverse the Liberal income tax cuts.
To
be fair, Mr. Harper has also promised to provide tax relief.
But he has promised to do so by cutting the GST to 5 per cent from
7 per cent. This goes against
the conventional economic wisdom that cutting income taxes is better for
the economy than reducing consumption taxes. The only economist who
doesn’t agree on this point is the Conservative leader.
By
rolling back the Liberals’ income tax cuts, Mr. Harper is essentially
asking low and middle-income Canadians to write a cheque to the federal
government pay for a GST cut that will disproportionately benefit
wealthier Canadians who have higher disposable incomes.
A
GST cut is enjoyed most by those with the most money to spend, not to
those who are struggling to make ends meet.
Canadians would have to spend their own money in order to see any
benefit under the Conservative plan, and those who spend the most would
get the biggest savings.
In
contrast, the Liberal tax cut plan means real savings for people across
this country – particularly for low and middle-income Canadians. Quite
simply, our plan means working people will keep more of their pay cheques.
Our approach offers Canadians choice – it gives them the freedom to set
their own priorities.
Canadians
can use the money they save through the Liberal plan however they choose:
to pay their rent or mortgage, to save for their children’s education,
or for their own retirement, or on purchases.
Under the Liberal plan, you don’t have to spend to save money.
Mr.
Harper needs to come clean on his tax agenda. And Canadians should
take note - taking money out of the pockets of low and middle income
families to finance a GST cut that would provide the biggest benefit to
the wealthy is a taste of things to come under a Harper government.
There
must be a reason that Mr. Harper has chosen to raise income taxes for
Canadians. There must also be
a reason that, to date, the Conservatives haven’t provided a full
accounting of their campaign promises. These promises aren’t free – it
seems Mr. Harper will have to raise taxes to avoid threatening future
budget balance.
The
Liberal government has already implemented the first step of our plan –
increasing the amount that Canadians can earn tax-free and cutting the
lowest income tax rate, to benefit those who need it most. However, a
significant portion of our plan would be at risk under a Conservative
government – including tax cuts for the majority of middle income
Canadians.
Because of our strong fiscal
management over the past 12 years we are able to provide Canadians this
tax reduction plan, which will deliver more than $29 billion in personal
income tax relief for middle and lower-income Canadians over the current
year and the next five years. These measures will particularly benefit
those with low and modest incomes, immediately removing at least 500,000
lower-income Canadians from the tax rolls.
These measures build on $22
billion of tax reduction measures set out in Budget 2005 and the Liberal
government’s five-year 100-billion tax cut which wrapped up this year
– the largest tax cut in Canadian history.
