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We said "$100 more for social assistance" - not $10 |
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Written by CCPA-Sask
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Thursday, 22 March 2007 |
Economic growth is supposed to benefit everyone, right? That’s not the case right now in Saskatchewan but it doesn’t have to be that way, says the Canadian Centre for Policy Alternatives, which released its Alternative Provincial Budget March 21.
"Despite the positive indicators coming out of the Saskatchewan economy, there is a growing gap between rich and poor and a persistent lack of social and economic security for the most vulnerable residents of this province,” says Dr. Jim Mulvale, CCPA Research Fellow and head of the Department of Justice Studies at the University of Regina.
With Saskatchewan’s history as a social policy innovator our provincial
government has an opportunity to lead a national debate on how to
achieve an integrated and cost-effective set of national programs to
guarantee economic security of all Canadians, says Mulvale.
“Saskatchewan should initiate this process by implementing new programs
under provincial jurisdiction and acting as a model and catalyst for a
new system of economic security,” says Mulvale. “One such initiative is
a Basic Income Program.”
Examine corporate tax
The CCPA is also calling on the government to do a more substantial
examination of the corporate tax regime beyond the parameters of the
2006 Business Tax Reform Committee.
“This review should also include a study of how to extract the optimum
level of economic rent from each resource sector, proper royalty and
taxation rates and the proper division of revenues between Saskatchewan
citizens and private industry,” says economist Dr. Marion Jones, CCPA
Research Fellow and Associate Professor in the economics department at
the University of Regina.
Jones says there is a need to change the tax system to get the
incentives right.
“Non-profitable organizations clearly should not be taxed. However, a
number of loopholes exist that allow corporations to avoid paying their
fair share of taxes and it is clear that during a time of unprecedented
demand for oil and gas we should be collecting more revenue from this
sector.”
Jones also says that Saskatchewan’s corporate tax structure must be
reformed in order to continue the diversification of our provincial
economy.
“A new tax structure must include a shift to a progressive corporate
income tax system that helps small and medium sized businesses with
lower rates, particularly in their first 5-8 years of establishment,
and with increased rates for the largest corporations. This would be
supplemented with a new system that would provide significant tax
relief to good corporate citizens who invest in physical, human and
social capital.”
Jones said this means that well-established large corporations that are
doing nothing to build productivity and community will be penalized
with higher taxes. Corporations that are investing in physical, human
or social capital would get tax relief in line with their investments.
Jones said there is also the need to investigate the possibility of
having a negative income tax for people with incomes below a living
wage, which would provide tax relief for the working poor and provide a
seamless incentive for people to seek employment and replace social
assistance without fear of a large drop in their quality of life.
Low earners should benefit first
“While we await the possibility of a negative income tax system, it is
very important that future tax cuts are disproportionately directed
towards the lowest income groups,” said Jones. “In the interim we
recommend that a new tax credit program be specifically designed for
people who, after gaining employment, are in a transition period
between social assistance and total independence.
Jones also stated that the sales taxes burden those at the bottom end
of the income scale indiscriminately. Because of this, she suggests
that the PST be harmonized with the GST, at a lower combined rate of
10% for both. This would reduce the double taxing on production that is
embedded in the PST, and would reduce the total amount of tax on
consumption. Failing this move to sales tax harmonization, it would be
best to reduce the PST half a percentage point this year, and a full
percentage point as soon as possible.
In its Alternative Budget the CCPA also provides comprehensive
recommendations to:
- Reform social assistance programs and raise rates
by $100/month, eliminate the controversial Transition to Employment
(TEA) program and provide a Basic Income Supplement of $137/month to
all adults aged 18-64 below the Low Income Cut-off Line;
- Improve the
quality of life of Aboriginal people;
- Grow our rural economy and
address environmental concerns;
- Retain and attract Saskatchewan
youth;
- Support municipalities by offsetting regressive education
property taxes;
- Reduce the number of VLT’s in the province to 3,000
and introduce a moratorium on any further expansion of gambling;
- Establish a Provincial Food Charter and support local food security
initiatives.
And so much more that you can read by going to
www.policyalternatives.ca or calling the CCPA office to obtain a copy
of the full Alternative Budget.
Download the Report/Study:
Saskatchewan Alternative Budget 2007:
Poverty and Inequality in a Time of Prosperity - PDF File, 498 Kb *
Saskatchewan Alternative Budget 2007: Budget in Brief - PDF File, 129
Kb
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Last Updated ( Friday, 23 March 2007 )
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