Still time to make sense of middle class tax cuts

A tax plan that offers no relief to more than half the country and only benefits those who are already wealthy would have seen Stephen Harper pilloried in the press and coffee shops across the nation, but will Justin Trudeau be given a free ride for doing just that?  It’s a question we are about to get an answer to since a study from the Parliamentary Budget Officer (PBO) confirms how critics indicated the ‘middle class’ tax break will really work.

During the brief debate in parliament before the New Year, New Democrats proposed an amendment that would have benefitted twice as many Canadians, but the new government voted that down.  Now that the PBO confirms that most Canadians won't receive any benefit whatsoever, will the government be willing to make changes? The study shows that the benefits of the Liberal plan mainly go to the top 30% of income earners with the most money going to the richest 10%. That includes those making $200,000 who will receive the maximum amount under the Liberal plan.

When the tables were turned and the government was in opposition, they took the word of the PBO as gospel truth.  It will be interesting to see how they handle their first bad report card from that office.  Canadians can only hope that they take the criticism to heart.  As I mentioned earlier, it is positive that the government is willing to look at inequity within the tax system, but it cannot be limited to measures that benefit the better off portion of the middle class only.

New Democrats saw the flaw in the plan and came up with a way to make it tackle inequity in a broader sense - and even that would have only scratched the surface of a much larger problem.  Now with inflation revving its engine and preparing to put a beating on household budgets in concert with an increasingly destabilized international market and a low dollar, we should all hope that the government doesn’t lean on negatives as excuses for inaction.

The cost of living is shooting through the roof. As I write this five heads of cauliflower cost more than a barrel of oil.  People respond to incentives and there is little in the way of incentive for healthy living when the cost of fruit and vegetable soar beyond the budget of lower income Canadians.  Add to that the fact that the low cost of crude oil, which is at the root of our declining economic fortunes, is not showing up for consumers at the pumps and it becomes clear that people who are scraping by are not getting any of the breaks at all.

The NDP amendment to the plan would have benefited twice as many Canadians and found money for working class and middle class Canadians who are pinching every penny these days.  The government should also consider our proposal to offset the revenues with a small increase to the corporate tax rate. A small increase maintains our competitive advantage and allows those entities benefitting from Canada to contribute a bit more to ensuring its well-being.  The good thing is that it's not too late for the government to do the right thing and implement the NDP's tax fairness proposal.