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?
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?
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?