Monday, October 29, 2007

My suggestions for tax cuts

Looks like Jim Flaherty is going to try to shove another 1% cut in the GST whether Canadians want it or not. Well many do want it, but the reality is it simply is the wrong headed approach to putting money back into the pocketbooks of Canadians. Here's how I'd cut taxes instead:

1) What I've said before and will say again: Transfer the taxable Harper bucks into tax free money and add it to the base amount of the Canada Child Tax Credit. Instantly you'll take several hundred thousand families off the tax rolls on a net basis. Then increase the base amount to a maximum of $5000 per child under seven (and $3500 for seven to eighteen) over four years. Several hundred thousand more families off the rolls. Those who actually work for a living.
2) Give low income seniors an equal reward that wealthier seniors got. If those with pensions got an extra $1000 tax free, then it's only fair poorer seniors who live off the Guaranteed Income Supplement get an extra $1000 per year too.
3) Eliminate the marriage penalty, entirely. Equalizing the spousal amounts was a good thing, but it should go one step further to the true meaning of making single income and dual income families equal -- as well as single parents. This should be phased in over four or five years.
4) The Working Income Supplement should be ramped up to give lower income people a real tax break -- not a six pack per week.
5) Charitable contributions should get the same tax break as political contributions. Any excess should result in a direct refund.
6) The "fitness" tax credit should be extended to include kids training in the performing arts. We need people who can think, not just be thugs on the ice rink. (Like Todd Bertuzzi, for instance.) Québec has taken this approach for its provincial taxes; it should be a national policy too.
7) Finally, broad based tax cuts over and above this should be funded through interest savings. Such cuts should go to increasing the basic exemption over and above what indexing would call for. The debt to GDP ratio is down to 36% but it needs to get down to 25% before one can even think about percentage rate cuts -- let alone a cut in the GST.

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