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Written by Canadian Taxpayers Federation
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Tuesday, 20 March 2007 |
Why is the tax relief so limited in scope? In November 2006, Mr. Flaherty told the House of Commons, “...our new economic plan proposes to keep the growth rate of program spending on average below the rate of growth in the economy.” And why is this important? The minister offered this answer, “To the extent spending growth is kept below the growth in the economy, this will contribute to further reductions in public debt and in taxes given the commitment to dedicate interest savings to tax reductions.”
Big Government Conservatism- Program Spending up 7.9% in 2006/07 and projected to rise by 5.7% in 2007/08
- Three dollars of spending for every dollar of tax relief in fiscal ’07
- Tax relief limited to families with children and seniors
Ottawa:
The Canadian Taxpayers Federation (CTF) reacts to the 2007/08 federal
budget, which was tabled in the House of Commons by Finance Minister
Jim Flaherty this afternoon.
Finance Minister Delivers Liberal Spending Budget:
Federal government spending on all programs increased from
$175.2-billion to $189.0-billion in 2006/07, this represents the third
largest increase in percentage terms at 7.9% and the second largest
jump in dollars since the budget was balanced in 1997/98. Program
spending is budgeted to jump another 5.7 per cent in the upcoming year
fiscal 2007/08) to $199.6-billion.
“Rather than reduce the overall tax burden, the Conservative government
opted to spend down the federal surplus,” said CTF federal director
John Williamson. “Program spending is up 7.9% as a result of the
finance minister wildly overshooting his original 2006 budget target of
5.3% an astounding 50%. As such, there is little reason to believe Mr.
Flaherty will hit next year’s budgeted spending boost of 5.7%.”
When the 2006 Budget was tabled in May 2006, Williamson observed, “If
the government is capable of reducing spending in its non-priority
areas and holding growth in others, the Conservatives will be able to
offer broadly-based income tax relief in next year’s budget.” Today, he
notes, “The government tabled a budget that dramatically increases the
size of the state. As a result, the tax relief is neither broad-based
nor all inclusive.”
Tax Relief for Canadians:
The 2007 Budget limits tax relief to low-income Canadians, families
with children, and it reaffirms already announced tax breaks for
seniors, including pension splitting. The Conservative government opted
against a broad-based personal income tax cut.
Why is the tax relief so limited in scope? In November 2006, Mr.
Flaherty told the House of Commons, “...our new economic plan proposes
to keep the growth rate of program spending on average below the rate
of growth in the economy.” And why is this important? The minister
offered this answer, “To the extent spending growth is kept below the
growth in the economy, this will contribute to further reductions in
public debt and in taxes given the commitment to dedicate interest
savings to tax reductions.”
“The spending spree is disappointing. Spending growth exceeded the
minister’s own target, the economic growth rate. As a result, Canadian
taxpayers were shortchanged on the issue of tax relief and will
continue paying sky-high tax rates,” said Williamson.
In fiscal 2007/08, Ottawa will spend an additional $10.6-billion and
lower taxes by less than $3.2-billion. For every three dollars in
program spending, taxes will be reduced by one dollar.
The Debt & Tax-Back Guarantee:
Minister Flaherty will reduce Canada’s debt by $9.2-billion this year
and at least another $3-billion next year. The Conservative government
will enact a tax-back guarantee to lower future taxes using interest
savings that occur naturally when government debt is reduced. Ottawa’s
debt now stands at $472.3-billion and annual debt interest payments are
more than $34-billion or $93-million each day.
“Ottawa needs a more aggressive debt reduction schedule,” said
Williamson. “Without such a schedule, future tax relief under the
tax-back guarantee will be meager at a time when the federal government
sits atop massive budget surpluses. The time to cut taxes is now, not
defer tax relief to a future date.”
Surplus – Latin for Big Government:
In 2005/06 the federal government’s surplus totaled $13.2-billion and
this year it will likely be $9.2-billion. The surplus is projected to
be $3.3-billion in 2007/08. Between April 1, 2006 and March 31, 2008 –
the two-year period under Conservative rule – Ottawa’s program spending
will rise by an eye popping $24.4-billion or 14%.
“The Conservative government is no better at managing a surplus than
the previous Liberal government. There is nothing responsible about
over-taxing taxpayers and amassing massive surpluses that fuel more
spending,” Williamson stressed. “Today, the word ‘surplus’ means ‘big
government’ as Ottawa’s spending has grown by leaps and bounds with the
federal surplus. The government will get bigger and bigger so long as
legislators have excess tax money to spend.”
“Legislators are incapable of demonstrating restraint,” concluded
Williamson. “And they are also unwilling to return the surplus where it
rightly belongs, namely the taxpayers of Canada.”
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Written by wagmitfam on 2007-03-20 14:56:17
Tax cuts are not the way to create a better world! Krikey, tax cuts are meaningless to those on the margins! |
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Last Updated ( Tuesday, 20 March 2007 )
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