Wednesday, September 10, 2008

What the deal is about the kid money

In response to a random question that 1337hax0r raised about Tom Brodbeck's column, re the Liberal's promise to double the so-called "universal child care allowance", I offer this musing.

The issue is not about child care. It's not about child poverty either. And throwing $1200 at the problem then taxing it back at a rate of anywhere between 15 and 50 percent (depending on one's bracket) is not a way to address the problem. This is in fact a regurgitation of one of the principles of Social Credit -- except it's not creating new money (which Bill Aberhart tried to do in the 1930s in Alberta but which was declared unconstitutional) but rather redistributing money that already exists and in an entirely inefficient way. It also had the effect of making the Canada Revenue Agency create a who new database and a new address list, when the one that existed for the Canada Child Tax Benefit (CCTB) would have more than served the purpose.

But let's suppose it was about child care and / or child poverty.

If the money had been added to the base amount of the existing Child Tax Credit which as it existed before 2006 offered upwards of $3500 per year per child, a successful strategy to reduce child poverty, then it would have served an additional purpose -- getting closer to the threshold anti-poverty groups say is needed to lift children out of poverty. Giving parents new money only to take some or all of it back with a stick is senseless.

And let's suppose it was about child care. Can anyone get full-time child care for a kid for a hundred bucks a month? Only province where that's possible is in Québec, that is if you can get a space.

As I've noted before, the Con money is not only taxable, it's non indexed which means it loses its value over time. The real allowance money on the other hand is tax free. If the Cons wanted to ensure that every parent got the money they wanted to hand out, all they would have to do is announce a floor on the CCTB that no parent of a child under seven would get less than $100 per month in 2006 dollars. But I guess it's better to make things simple on the outside while making it way more complicated for bureaucrats who have to cut not just one check for most parents but two. Most provinces and territories top up their allowances into the federal CCTB amount to save on paperwork. The fact the Cons refused to do so, instead having two separate amounts, is itself a disgrace for a party that claims to be on the side of the environment!

Note too, in creating the separate child tax money which is taxed back, they also eliminated the young child supplement for the poorest families. The Liberals want to put it back (an extra 30 bucks a month or so on top of the double). You don't hear the Cons explaining why they took the milk money away, do you?

I'm not sure whether the Liberals intend the doubled money they propose to be tax free or taxable -- but the fact is they are offering more, way more. Right now the Conservatives are not. It's not an admission the Liberals were wrong. It's acknowledging parents need help in these tough times. If incidentally it gets the money that kids really need closer to what parents really need, that's not the Conservatives' problem.

And in any case, the fact remains the same: Couples should have the choice about whether to have one or two parents working and $100 per month isn't enough to allow for that. Single parents definitely need access to affordable child care, and $100 per month certainly isn't enough to do that.

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