It’s never too early to start drafting Budget 2004
Ottawa - Tuesday, March 4, 2003 - by: Walter Robinson, Federal Director, Canadian Taxpayers Federation
runaway	Many Canadians would simply like to forget Budget 2003 given its runaway program spending and reliance on optimistic economic growth projections. It seems they have found company in federal Finance Minister John Manley.
tax gap	Less than 48 hours after bringing down his ‘bigger government is better government’ budget — the likes of which we haven’t seen since the days of Trudeau — Mr. Manley was telling a Toronto business audience that our growing tax gap vis-à-vis the United States warranted attention.
spending binge	While pundits have questioned the consistency — not to mention the motivations — of the Finance Minister in this apparent course correction after tabling a spending binge budget, what is important here is that we have leading federal politician who seems to realize that high personal income taxes are problematic for a variety of reasons.
minimum wage	In terms of the next round of tax cuts, the ideal place to start would be to raise the basic personal exemption from its current level of $7,756 to $15,000 in five years, or less. Why $15,000 you may ask? Simply stated, $15,000 is roughly the average amount earned (before taxes) by a minimum wage employee.
recycle	Why do we tax these people who are just entering the workforce, considered working poor, or just looking to earn a few extra bucks to make ends meet? The importance of this question becomes self-evident when one considers that we recycle a good deal of the taxes paid by minimum wage workers back to them in the form of GST credits and other tax benefit schemes.
dignity	Here’s a novel idea: Instead of taxing almost half their earnings (at 16%) and creating jobs for tax bureaucrats to recycle this same money back to them in the form of quarterly entitlement cheques, why not simply raise the basic personal exemption and leave more — if not all — of this money on their paycheques so low-wage earners can have the dignity of better providing for themselves on a daily, weekly and monthly basis?
more than 1/2 million	Canadian Taxpayers Federation calculations peg the maximum cost of raising the basic personal exemption to $8,000 at $602 million and if the spousal exemption (currently at $6,586) is also hiked to $8,000, the total impact would equate to $1.3 billion. A move to hike the basic personal exemption to $10,000 would cost $5.5 billion and combined with an equivalent increase in the spousal exemption would result in a $7.2 billion impact — removing almost 588,000 Canadians from the tax rolls.
relatively easy	Getting to the target basic personal exemption amount of $15,000 would represent a $17.8 billion maximum impact on the public treasury or a $22 billion hit (read: tax cut) if the spousal exemption is increased to $15,000 as well. This would remove over 2.1 million Canadians from the tax rolls. Spread over five years, it would be relatively easy to allocate $4.4 billion annually to bump the basic personal exemption to $15,000.
great social policy	From a fiscal perspective this is eminently affordable. From a social justice perspective, providing tax relief for all Canadians but most specifically lower-income Canadians is very compelling. Similar to the federal governments move to re-index the tax system to inflation — a nation campaign led by the Canadian Taxpayers Federation — thereby ending bracket creep, raising the basic personal exemption blends good fiscal policy with great social policy.
necessity	The recent Bush tax cut plan ensures that a family of four earning $40,000 or less will pay no federal income tax. A similar Canadian family starts to pay taxes at $27,000. Raising our basic personal and spousal exemption is really not a question of choice, it’s an absolute necessity. And it’s never too early to start preparing for Budget 2004.
	Walter Robinson Federal Director
Retrun to Ensign - Return to Saskatchewan News   This page is a story posted on Ensign and/or Saskatchewan News, both of which are daily web sites offering a variety of material from scenic images, political commentary, information and news. These publications are the work of Faster Than Light Communications . If you would like to comment on this story or you wish to contact the editor of these sites please send us email.   Editor : Timothy W. Shire Faster Than Light Communication Box 1776, Tisdale, Saskatchewan, Canada, S0E 1T0 306 873 2004