Friday, January 16, 2009

How do you help Canada's most needy?

Besides the fact that it is January 16th, and Parliament resumes January 27th, and the Harper Government is still undecided on the economic moves they will make to help Canadians, the "Great Minds", seem to be focusing on personal tax cuts to help those who are most in need.

"We have to help the vulnerable and those affected most severely by the downturn. But you can't do that and leave the middle class to fend for itself. A program like that would not be successful," Harper said.

Finance Minister Jim Flaherty has said his budget would contain some form of tax cuts to spur spending.

But the final budget could depend upon the wishes of Liberal Leader Michael Ignatieff.

"There is a distinction between the kind of tax cuts that I favour, and the broader tax cuts that Harper and Flaherty are talking about," Ignatieff told reporters in Vancouver on Thursday. He said those tax cuts should be aimed at the "least fortunate."

Last week, Ignatieff said it's going to be very important to get stimulus into the Canadian economy fast.

"So we may be looking at tax cuts very quickly — tax cuts targeted at medium- and low-income [earners] to boost their purchasing power fast," he said.

In almost all cases I am in favor of tax cuts, but.. what taxes can they cut that would help the most vulnerable? If you are unemployed, an income tax cut isn't a great deal of help. In general, a further cut to GST isn't going to make great difference either. Unless they eliminate it altogether and there is little chance of that. So if their goal is in fact to stimulate spending and thus the economy overall, and to help the most vulnerable, what taxes could they be talking about that would achieve these things without further significant reduction of the Governments ability to fund the social net?

Something for Harper and Ignatieff to think about.

1. Low income earners have very little to no disposable income and do not engage in any significant amount of discretionary spending.

2. If you don't have a job, and even worse any EI benefits, what tax cuts are going to be of significant benefit?

3. If you cut income taxes for what politicians conceive as the middle class, isn't that going to result in even higher deficits or cuts to social spending ala Paul Martin?

4. When do you guys start pitching in and suffering a bit of the pain too, like ceasing and desisting with the PORK?


  1. The most vulnerable rent so the tax cut that would affect them largely is property taxes.

  2. I'm not sure what you mean. That is usually a municipal or provincial jurisdiction and paid by the property owner.

  3. Property tax is in the jurisdiction of each municipality. It is set annually on the basis of municipal budget requirements.

    Cutting property taxes would provide some relief to renters who, unbeknownst to most of them, contribute up to 20% of their monthly rent to the landlord's property taxes. Three problems, biggest first: making up the budget shortfall of municipalities; getting landlords to pass on the reduction to tenants; and slow cash distribution and economic effect.

    Fastest way would be a meaningful child allowance. No doubt this would result in some increase in beer and popcorn sales, but it would put money directly into the hands of those who need it most. It might offend Poppavox's screwed-fathers religion, but I could live with that.

  4. Apparently most of the Premiers aren't too hot on tax cuts either. I know they are thinking about their own budgets as well, but apparently are questioning the wisdom of it.


    "Harper told the closing news conference that the government is "looking at all options" on tax issues, but stressed that "it's important that the middle class of this country be part of an economic stimulus plan."

    But most premiers seemed unenthusiastic about the notion of tax cuts.

    Williams said he'd prefer to see more money to expand Employment Insurance - a view echoed by several other premiers.

    "Marginal tax cuts for people who have jobs I don't think will have as big an impact as significant support for workers who have lost their jobs," he said."

    Ontario lets taxpayers claim part of rent costs on their income tax return. Nothing like that in Atlantic Canada but I don't know about the ROC. Still, that is only once a year and it would take a while before it got to those in need. Something more direct would be helpful, but it couldn't rely on landlords.

  5. Herb
    "It might offend Poppavox's screwed-fathers religion, but I could live with that."
    Don`t be an asshole Herb, I`ve never promoted fathers rights, I`m a child rights advocate.
    It offends me that you can be so callous as to have no empathy for the current higher number of abused children than during the 50`s residential school shame.

  6. Tax cuts won't work. People won't spend the 'refund' in a downturn economy. It didn't work in the U.S. or U.K. so why do they think Canadians will behave differently?

    I wasn't in favour of the 2% GST and think that it should be reinstated to 7%. GST pays for our hospitals, higher learning, military, police services, foreign aide, social programs and debt. As a consumer 2% really doesn't make much of difference on whether I purchase a product or not. 7% isn't deciding factor either. Yes, I complain about taxes but I also complain about Canadian weather. I figure both are part of being a Canadian.

    If they really wanted help families they should have removed the tax altogether on children's clothing, books or over the counter medication.

    Having a foreign country build military hardware and that same country is holding the debt issuances? Yup, makes sense to me especially since the foreign country will earn a lot of income revenue because a lot of their population will be employed. Nice circular reasoning that I've come to expect from our politicians.