Political parties’ tax policies can be confusing

By Medicine Hat News Opinon on February 14, 2019.

Justin Trudeau needs to clarify whether he thinks low income Canadians pay taxes, and various conservative actors need to clarify their position on tax cuts.

The issue flared last week when the opposition erupted in disbelief during a discussion on the effectiveness of the Canada Child Benefit.

It was increased as a main plank of the first Liberals budget in 2016, and at the same time was prorated based on income levels (that is, Canadian families who earn less get a larger benefit amount monthly).

Conservatives have got a lot of miles of criticizing Liberal cuts to other Harper-era tax credit programs that were once paid on year-end tax refunds, but were chopped to pay for the increased CCB amounts.

The prime minister argued those sort of targeted tax refunds – termed “boutique tax cuts” by him – are less effective to alleviate poverty because lower income Canadians “don’t pay taxes.”

They do, and the Conservatives pointed out that low-income Canadians pay plenty of taxes, the GST, the carbon levy, even so-called ‘payroll taxes’ (a relatively new term in Canada referring to CPP and EI deductions), as well as likely some measure of income tax.

Trudeau, who could have avoided all this by substituting “less tax” for “no tax,” hasn’t really apologized or really explained the logic in a easy-to-digest manner.

This is well in keeping with opposition criticism that Trudeau is out of touch and more than a bit haughty.

However, both parties seem to be standing on each other’s ground when it comes to how best “put more money in the hands of Canadians” as is universally said.

The Conservatives, who are probably in favour of across-the-board tax reductions, are left arguing about specific lines on tax returns and the complexities of the tax system, which is a land of confusion for most voters.

Liberals seem to be taking the traditionally conservative position that putting more money in the hands of Canadians sooner is the better approach.

It is absolutely true in terms of income that Canadians who don’t have large income tax bills to start with will be less helped by tax cuts.

Yet, Trudeau’s weak point seems to be that voters have a hard time believing that he understands average working Canadians.

A number of right-leaning columnists now call him Trust Fund Trudeau, but are we to believe the Conservative Party of Canada opposes inherited wealth?

Similarly, large portions of conservative political and supporter base decry so-called “social engineering” – an academic term used to describe tax incentives offered to meet social or other policy goals.

That’s exactly what Tories are advocating for when they opine for the return of tax credits for bus passes and hockey lessons that were cut by the Liberals to boost the child benefit.

Reducing the cost of bus passes encourages public transit use which helps declog traffic in major cities that would otherwise be spending more money and sooner on other transportation projects. The gas tax on vehicle fuel does the same thing, and pays for road maintenance, but it’s recently been lumped in as a carbon price in conservative circles.

A discount on hockey lessons – brought in by the Harper government, and chopped by the Liberals – gets kids active and has the added political cachet because it plays well to regular joes and hockey moms.

It’s hard to argue, though, that those struggling to keep a roof over their heads need slightly discounted hockey lessons, and would prefer to have that discount paid back months later when taxes are filed.

Meanwhile, the Liberals are taking long-term Conservative tact that they’d rather put the money in the hands of Canadians and let them figure out how best to spend it.

Figuring out either party’s philosophy on tax policy, though, is becoming as confusing and frustrating as filing an income tax return.