Saturday, January 07, 2006

All citizens need tax relief

According to the most recent statistics (pdf file), over a million children in Canada live below the poverty line. Of those, over 1/4 had at least one parent in the work force full time, but with employment that didn't bring them to the income tax cut off. The rest had parents who either worked all year, but only part-time, or were on some sort of social assistance. Either way, these parents were below the Low Income Cut Off -- meaning they would not pay income tax. Many of these children live in single parent families.

So -- over a million children live in families where no income tax is paid because they live below the Low-Income Cut Off --how will the Liberal tax policy benefit them?

It won't.

An income tax cut means nothing to people who don't make enough money to pay income tax.
Not making enough to pay income tax doesn't mean that families are not working. Many are. It simply means that their wages don't reach the poverty line due to things like lack of education, lack of training, or lack of Canadian experience or due to circumstances like location and job availability.

Do you only matter to the Liberals if you earn enough to pay income taxes?

A simple 1% cut in the GST will make a real difference to these families, where a 1% cut in the lowest tax bracket and an increase of the personal exemption won't.

So why should the working poor subsidize the those who live below the income tax cut off?

They won't.

A reduction in the GST will offset any minor benefit a worker would receive from the 1% cut to the income tax rate.

Poor families -- those below the income tax cut off and those in the lowest income tax bracket -- pay monthly bills. Their expenditures vary, depending on income, but most pay utilities, telephone etc. Lower income families who have the luxury of a car, have to pay insurance. Most renters pay some sort of rental insurance. Everyone needs clothing and boots. All are subject to GST.

It surprises me that Jack Layton and the NDP are against any tax cuts, but particularly the Conservative plan which will benefit their primary constituency -- children and families living in poverty.

Some conservatives lament that Harper's plan isn't conservative enough. My understanding of fiscal conservatism insofar as taxes go, is that money belongs in the pockets of the citizens, not in government coffers. The more money the people have to do with as they choose, the better for the economy. Although income tax cuts might spur investment, a cut in a consumption tax won't discourage it, so in that sense it's neutral. Conservatives should welcome any tax reduction, especially one that benefits all Canadians, not just those above the poverty line.

Over one million children live in families below the Low Income Cut Off. These people are citizens, too. Harper's plan enables them to share in tax relief. What has Paul Martin got against that?



TheTorontoTory said...

You did not include the blogroll, there is more code that you forgot and is very small, therefore I hope it will not be to much trouble to include it!

Canadi-anna said...

Oh, sorry. I'm not very good at that sort of stuff. I'll try again.

Jesse Gritter said...

Hi Anna. Excellent post. Those who don't pay income tax (the "poor") can't benefit from an income tax cut (because they're not paying income tax) but they will benefit from a Harper-Conservative GST cut.

TheTorontoTory said...

Send me an email when you do! Then I can add you to the blogroll, hopefully tonight!

Peter Thurley said...

"A simple 1% cut in the GST will make a real difference to these families, where a 1% cut in the lowest tax bracket and an increase of the personal exemption won't."

The reason that this isn't true is because the GST is simply not felt by those who are low income earners. Yeah, it is there, and we know it it, but the GST cuts are most beneficial to the rich. Think about it. You have to buy the necessities of life. Yes, the 1% would help. But now think of the larger purchases that these low income earners cannot even think about. A car. A house. A big screen TV. A vacation. Going out for a nice dinner, where you spend $200 between dinner, drinks and dancing. Thats where the GST is felt. It is not felt on the $50 grocery bill. It is not felt on the small purchases. At the end of the day, a cut in the GST provides the most benefits to the rich. Yes, I agree, it benefits the poor, but not nearly to the same extent or to the same noticability as it affects the rich. When you think of 6% as opposed to 7%, who gives a rip when it comes to the necessities of life. However that 1% makes a difference when it comes to the big things that only the middle class and the rich can afford to enjoy. It is not so much that the poor are opposed to the GST being cut. The reason why it doesn't make sense is because it provides the most benefits those who don't need the tax cut. At the end of the day, it does nothing to ease the concerns of the poor.

I recall reading an article at the CBC a couple of days ago about the fact that the conservative plan would repeal the tax cuts to the lower class that the Martin government has offered. It would keep the tax cuts to the upper class, but it would, once again, screw the lower class right up the bum. Now I, like Layton, am against any tax cuts, but if we think logically, I think it makes the most sense that those who might use tax cuts are those who can't really afford to pay taxes. As i pointed out above, the cut to the GST will go unnoticed by the poor and working class. So who wins? Well, of course, it is the rich. That makes me mad. In fact, that often makes me cry.

As for why Jack Layton and the NDP do now want any tax cuts - Social programs cost money to run. We believe that social programs provide great benefits to all Canadians, and especially the poor. Taxes provide all Canadians with the opportunity to provide for those who need it the most. The fact is that the Conservative plan may minorly benefit the people you claim = the poor and children living in poverty. However, when you take into account the extreme benefits to the rich, there will be less money in the coffers to pay for the social programs that NDP'ers see as necessary to help with poverty issues. At the end of the day, there is no benefit to the poor, as social programs are stripped of funding, public healthcare takes an even bigger beating, and the poor are given cash in their pockets and told to fend for themselves. I'm sorry, but that does not provide benefits for the poor. It only alienates them and fosters resentment against the government. resentment because they feel abandoned in favour of the rich.

The way I see it, a government is to be judged by how it treats its least advantaged. Should there be a Conservative government, I fear that canada would be given a very poor grade, as there are very few Conservative policies which give a notocable benefit to the least advantaged, and there are many Conservatove policies which, in the long run, will only hurt the least advantaged.

My apologies for a long comment, but I must fundamentally disagree with you with respect to the benefit of the GST tax cut for the least advantaged Canadians.

Canadi-anna said...

Peter -- all the people who keep saying this won't help poor families, don't live in poor families.
You know what? I do. I'm the sole provider in a poor family.
Don't tell me that when I'm buying winter boots and coats for my four kids (two teens, two preteens) that even 1% won't make a difference.
And all those bills . . . it makes a difference. I don't have savings to draw on, my bills are paid week to week month to month. A few dollars difference either way means having to hold back on paying something or being able to pay outright and not pay late fees.
It's always the single people talking for families and the rich deciding what the poor need.
I'm the head of a low income household. I think I know what my family needs.
We have social programs and Harper hasn't talk of cutting them.
I don't usually speak up for policy simply because it affects me, but I see this as policy that affects a lot of people like me - -- the people Jack Layton thinks he speaks for.
I respectfully submit that all the uni-types who think 'social programmes' are the panecea - sometimes paying your bills on time is the cure all -- not some government organized scheme.
Some of us would prefer to live with as little government intrusion as possible. It doesn't stop the others from participating in the programmes that exist.
If Harper cuts GST there will still be food banks, there will still be shelters, there will still be family services but maybe instead of having some agency do things for me -- maybe I want to do as much as I can on my own.
Why does that strike people as odd?

Peter Thurley said...

"all the people who keep saying this won't help poor families, don't live in poor families."

I grew up in a family where my father currently grosses $20,000/yr. I have five younger sisters. My mother is a stay at home mother. At one point, when I was about 17 years old, my father grossed $18,000. I had sisters aged 16, 15, 13, 10 and 7. I can recall eating potatoes and bread crusts for my two meals a day (if I was lucky), walking to school with one pair of jeans, and watching as my father and mother cried themselves to sleep every night, wondering where the next dollar was going to come from. Yes, I come from a poor family. My father, who does not have a high school education, was never given the tools for success. Being dyslexic in a time where dyslexia was unknown, he dropped out and did menial labour. When he wanted to do something about it, when he wanted to go back to school to get his GED, he was unable, because, after all, he is the sole provider for the family.

"I respectfully submit that all the uni-types who think 'social programmes' are the panecea - sometimes paying your bills on time is the cure all -- not some government organized scheme."

I would respectfully submit that many of us uni-types (facing a debt load of close to $40,000) have come from situations where we see how social programmes would have helped. It is hard to pay the bill on time when you have no money to pay the bill with. And then the conservative types tell me my father and men like him are lazy and need to get off their ass and get a job. pft.

I remember my mother crying when the government cut child support cheques. She relied on that money to put food on our table. I remember my father pacing the hall as he bemoaned the fact that welfare was becoming increasingly sparse and that the money provided by the government was still not enough - and my father was working. I remember getting my first job, using some of the funds from that to help put food on the table. Believe it or not, some of us uni-types have been through shit and have lived in poverty and have seen, firsthand, how increased social spending would have made our parents job more bearable and resulted in fewer nights spent listening to their mother sob herself to sleep.

When faced with that kind of scenario, a reduction of 1% in the GST does jack-shit.

"Some of us would prefer to live with as little government intrusion as possible. It doesn't stop the others from participating in the programmes that exist."

If you cut taxes, what suffers? Perhaps Harper has not talked of gutting social programmes - but I think that one glance at Mr. Bush and his dedication to tax cuts should serve as an example or what happens when there are tax cuts. The social programmes suffer. Where do Canadians think these taz cuts are going to come from? Yes, thats right. Social programmes. Given the fact that these types of fundamentally programmes are absent from the Conservative agenda (for philosophical reasons), it is not surprising that these programmes would suffer.

Once again, my apologies for a long comment, but I kinda took it personally, even though I know it was not meant to be taken personally.

Peter Thurley said...

sorry, the word 'fundamentally' in the second to last paragraph is superfluous and should not be there.

eugene plawiuk said...

If cutting the GST will help those working poor who pay no taxes, then why not just eliminate it for the greatest good. This of course is a rhetorical question.

Canadi-anna said...

Eugene - it's too bad that it's rhetorical.
Peter -- Duelling sob stories ,>
I'm sorry if you thought I meant you personally when I said uni-types -- I actually meant Jack Layton. He always strikes me as the campus activist.
Your family's struggles are not dissimilar to my own in the sense that they dealt with their situation on their own. What other programmes could they benefit from that don't already exist?
Your suggestion that Harper would cut any social programmes belies the fact that a Conservative in Canada has far less maneouverability than a Liberal, or a Republican in the US for that matter. Harper would be committing political suicide should he touch anything like that.
Besides, the federal government isn't responsible for most social programmes (Child Tax Benefit and Supplement are two I can think of) but most come under provincial jusidiction. Harper is the one who wants to address the fiscal imbalance which gives the provinces more money to deal with all areas within their purview.
Martin says there is no fiscal imbalance and I think Jack Layton would prefer if he held the purse strings because I don't think the NDP trusts anyone with their own money.
Peter, as minor as the benefits would be, a GST cut isn't going to hurt anyone. And no one is going to miss the minor income tax rate cut Harper doesn't plan to keep in place (remember, this is something that no one has felt yet, it was brought in as a last minute election goody).

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