Lower taxes or more benefits? Liberals and Conservatives have different answers.
In the 2006 federal election campaign, the Conservatives ran on a promise to cut the goods and services tax to 5 per cent from 7. Fiscally speaking, it was the biggest thing the Stephen Harper government did during its decade in office.
It also represented something consistent about the Conservative vision of a government that taxes a bit less, and can afford to do a bit less.
Economists generally disliked the idea of cutting the GST, but the move really did leave more money in people’s pockets. In 2006, the Conservatives estimated that a family of four earning $60,000 would save around $400 a year.
Also thanks to that GST cut, the government is noticeably smaller. Federal revenues are roughly $15-billion a year lower. If Ottawa had that extra money, it would be running a surplus today, or able to spend $15-billion a year more on programs and benefits.
In 2015, the Liberals ran on a promise of more child benefits, targeted at low- and middle-income families. They paired that with a plan for what they called a middle-class tax cut – really more of an upper-middle-class tax cut – paid for with a higher tax bracket for the top 1 per cent of earners.
Fiscally speaking, it’s the biggest thing the Justin Trudeau government did during its four years in office. And it, too, represents something fundamental about the Liberal vision of government.
In 2015, the Liberals promised to put more money into the pockets of most voters. That’s also what the Conservatives promised with their 2006 GST cut.
And it’s the goal of the 2019 Conservative platform’s biggest idea so far, the so-called “universal tax cut,” which will drop the lowest income-tax bracket from 15 per cent to 13.75 per cent. On Sunday, the Liberals released their answer, a plan to raise the amount of income that is tax-free, the so-called basic personal amount, from $12,069 to $15,000 by 2023.
These latest promises from the two parties both involve cutting tax from the bottom up, but with important differences. By cutting the rate on the lowest bracket, the Conservative are offering a tax cut to almost everyone, from low- to high-income. Once fully phased in, it would mean 1.25 cents less of income tax on every dollar earned between $12,069 and $47,630. But it also means that, to get the maximum benefit, you have to earn as least $47,630.
The Liberals’ promised tax cut, in contrast, would deliver a considerably bigger break for low-income Canadians, a slightly lower tax break for those with middle-class incomes, and no money at all for those at the top end. The Liberal tax cut will phase out for those with incomes over about $150,000, and it will not apply to anyone in the top bracket, over approximately $210,000.
自由党的这一减税政策是2015年联邦大选的政纲之一，其目标的提高一批人福利的政策延续。自由党用加拿大儿童福利金（Canada Child Benefit）取代原有的儿童和家庭福利计划，确保如果家庭收入增加，所享受的福利也随之减少。由于这一政策的实施，那些有较高收入的家庭丢掉的许多福利。但根据国会预算监督办公室（PBO）的说法，在政策实施的第一年中，有880,000个收入低于30,000元的家庭平均获得了额外的2,223元现金，收入介于30,000元和$65,000之间的874,000个家庭则多了$2,086的现金。
That follows the targeted-benefits approach of the 2015 Liberal platform. The Liberals replaced a bunch of child and family programs with the Canada Child Benefit, whose payments fall as income rises. Upper-income earners came out losers in this arrangement but according to the Parliamentary Budget Officer, in the CCB’s first full year, 880,000 families with incomes less than $30,000 each got an average of an extra $2,223 in cash, and 874,000 families with incomes between $30,000 and $65,000 got an extra $2,086.
加拿大儿童福利金大大减少了加拿大的贫困问题。国际经济合作组织（Organisation for Economic Co-operation and Development）发现，借助这些新的现金福利后，有孩子的中低收入加拿大人现在所交的税要比美国同龄人低得多。
The CCB has significantly reduced poverty in Canada. And the OECD found that, when those new cash benefits are taken into account, low- and middle-income Canadians with children now have a much lower tax bill than their peers in the United States.
But doing all that wasn’t cheap. In its first full year, according to the PBO, the higher benefits for low- and middle-income families cost $4.3-billion more than the old family-benefits system.
The Conservatives’ “universal tax cut" will put real money in almost every pocket, as the 2006 GST cut did. But it will also reduce Ottawa’s revenues, which will be $5.9-billion lower in 2023, according to the PBO. The Liberals’ 2019 tax-cut plan has almost the same price tag. But the party says it will be paid through to-be-announced “measures that make our tax system fairer." Stay tuned.
Conservatives and Liberals aren’t offering visions of Canada that are night and day. But there are real differences in where they strike the balance between how much government should do to reduce poverty, for example, and how much tax it should raise and redistribute to do it. One question for Canadians in this election is where they want to strike that balance.
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