Interim Liberal Leader Bob Rae wants more tax breaks for people that pay no tax. File photo, Andre Forget, QMI Agency
One of the aspects of the tax policy the Conservative Party has adopted that has annoyed hard core fiscal conservatives is Stephen Harper’s love affair with boutique tax cuts. Forget across the board cuts that please economists, the Harper Conservatives figured out that offering people a tax break for something they already do, like procreating or joining a gym, was the better path to political success.
It may annoy economists but voters seem to like it.
Turns out that these tax cuts also annoy the Liberals because they are tax cuts and not a social program. Interim Liberal Leader Bob Rae stood in the Commons on Tuesday and asked why the government wasn’t also giving this tax break to people that don’t pay taxes.
Hon. Bob Rae (Toronto Centre, Lib.): Mr. Speaker, my question is for the Prime Minister.
The Prime Minister will be aware that 25 million Canadians file their income taxes. Of those 25 million, 15 million actually pay taxes and 10 million do not.
I have a very simple question for the Prime Minister. In dealing with the tax credits which were announced in the budget for piano lessons and art lessons and for taking care of loved ones, I would like to ask the Prime Minister why 10 million Canadians and more have been cut off and disqualified from being able to receive those tax credits because they have not–
The Speaker The Speaker: The Right Hon. Prime Minister.
Right Hon. Stephen Harper (Prime Minister, CPC): Mr. Speaker, I would like to congratulate also the member for Toronto Centre on becoming the interim leader of the Liberal Party of Canada.
The budget has many important programs, many important benefits, some of which the leader of the Liberal Party mentioned, including some of the important tax credits for Canadian families, for caregivers and for children’s arts. I would encourage the Liberal Party rather than just saying it should be more to actually look at these things as positive benefits and support these benefits for Canadians.
What Rae wants are “refundable tax credits” which aren’t really tax credits at all but social programs administered by the tax system. Let’s say you made $20,000 and have two kids. Chances are you are already refunded any tax you have paid because your income is so low. But let’s say you still scraped together $500 for piano lessons. Bob Rae wants to you to get the further tax break even though you have already been refunded all the tax you pay and possibly then some.
At that income and with two kids, assuming you are a single parent living in Rae’s Toronto riding, you also already get $8,924.88 per year from the Canada Child Tax Benefit and associated programs. Chances are you also qualify for social housing, if any is available, and can qualify for subsidized daycare and even subsidized art and sports activities from your local municipality.
It’s tough being poor. It’s tough raising kids on low income. But giving people more in tax breaks than they ever paid in taxes isn’t the answer. That doesn’t let them hold their head high it turns them into clients of the state who feel they had to take a handout.
See John Robson’s excellent piece on how this kind of dependency just further grows government for another take on the matter.
Here’s a crazy idea…….stop taxing the poor and let them keep more of the money they earn through work.
I remember asking John Manley, back when he was finance minister, why he didn’t adopt this approach instead of expanding subsidies and he looked at me like I had four heads. The idea that taxing people at a high rate and then sending them government cheques of equal or greater value seemed completely reasonable to him.
Bob Rae wants to take it one step further. Give tax breaks to people that don’t pay tax.
Related: Poverty vs Low Income
