In the wake of Stephen Harper's government announcing $1 billion in spending cuts, primarily aimed at disenfranchising people who might actually be critical of the CPoC, we find Finance Minister Flaherty musing about "further tax cuts".
The "tax cuts" that took effect in June this year were relatively small (1% GST cut, for example), and only really have a measurable effect on large purchases.
However, what most people overlook is the fact that "tax cuts" seldom materially benefit the average or low income earners - especially when implemented using the neo-Con "one size fits all" approach. If your individual income isn't in the low six figures, a 1% tax cut isn't a whole lot of anything, especially when it's spread across each paycheque.
In taking a page from their US neo-Con leaders currently in Washington, the CPoC is creating a taxation environment where the wealthiest of Canadians will pay less taxes, and the gap will further squeeze middle income Canadians down lower.
This is a government, that like Ralph Klein's in Alberta, fails to grasp the fundamental notion that governing a nation is about much more than the nation's fiscal balance sheet. It's also about the country's social balance sheet - how do we care for our seniors, bring people out of the margins of society and into the mainstream, care for the ill and so on.
As a footnote - there is some thought that the cuts announced ealrier won't affect CPoC support significantly. I can only hope that outside of Alberta, they're horribly wrong. (Alberta keeps re-electing Rob Anders and Jason Kenney - I don't have high hopes for change there just yet)
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3 comments:
Wow, a Reganite trickle downer. The problem with the trickle down theory is that the rich didn't get that way by spending money. Further, by not lowering taxes on the bottom end of the income scale, the poor, who don't have a lot of money to begin with, have even less. The economic benefit is primarily to those who don't need any more benefit, as the rest get the crumbs. This is typical of neo-con thinking, that the poor have too much money and the rich not enough.
Further, what jobs are really created? More minimum wage jobs that don't provide enough money to live on. Given that the Tories increased the tax burden on these jobs it really kills any benefit from trickle down.
JN
www.evilscientist.ca
The problem with cutting GST is that it is a consumption tax - the lower end of the wage scale who spend their entire paycheque have no choice if they pay the tax or not; however the higher salary range had the option to save or to splurge - who gets hit hardest with a consumption tax?
Companies, when they decrease GST amounts, have to incur expenses - print new forms, change over computer systems... and since they are benevolent, they won't pass these costs on to the end consumer - yes? So how does this help save Mr. Common Man (TM) $$?
Wouldn't we be better off keeping the tax and instead investing/spending it on something that is a little bit more important? We hear an awful lot about education, health care, child care... and very little of what hits the news indicates that our government is providing the social supports that would be beneficial to society. (And yes, I do acknoweldge that not all of these costs are federal, but we mustn't discount transfer payments, etc.
Just yesterday, I heard on CBC that the new Alberta Children's hospital has opened with only four of their operating rooms open... and someone being interviewed on the radio suggested that it was a GOOD thing to have waiting lists, as it indicated a healthy system of health care. Hello? How does it do a patient one iota of good to wait for necessary surgery? Sure, it might mean that you have a steady flow of patients into surgery, and the room doesn't run the risk of ever sitting idle, but I have a problem when a propsporous province suggests that waiting for OR space is beneficial. (http://www.cbc.ca/canada/calgary/story/2006/09/27/ambulances-hospital.html)
Ah, but it's all part of the big picture... isn't it? Death and taxes.
"The problem with the trickle down theory is that the rich didn't get that way by spending money."
Obviously you have never had any wealth of any sort! The rich get that way in one of two ways, inheritence or aggressively spending in order to, possibly, make a large dividend.
When wealth has become a reality and the individual has attained some kind of comfort, they must follow these wonderful things called "budgets". These budgets state that we want to make this many dollars this year. When a surplus is achieved we can spend that money on either hiring a new employee or replenishing equipment or office furniture etc...
When we hire an employee the job creation is obvious; however, what occurs when we purchase the other items? Do you think that this in turn allows for others to hire new employees to assist in manufacturing or shipping these items to our plave of business?
It really does not take that much logic to think of how lower taxes benefits all of society. It also does not take that much logic to figure out how Canada does not take on new social programs very efficiently. We have a tendency to build huge industries where very little money actually gets back to the people. Do a little investigation on any of the social programs currently in place in Canada and you will be shocked at what you find.
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