Canadians were so thrilled when they first faced the prospect of a conservative government five years ago. After all, conservative equals small government, and that equals lower taxes. They couldn’t have been more wrong.
Five years later, Canadians are still suffering under a tremendous tax burden. The average Canadian family pays at least 45% of its annual income in taxes, spending more on taxes than on the basic necessities of life. It’s never healthy for any society or economy when most of people’s income is eaten up by taxes.
Prime Minister Stephen Harper, an economist by training, got it all wrong right from the beginning. Engaging in politics, rather than policy, he lowered the Goods and Services Tax (GST) from seven percent to six, and eventually to five percent. Clearly, he must not have been listening to the majority of his colleagues in the economics business, who all agree that personal income taxes must be lowered, or even eliminated entirely, while consumption taxes such as the GST should actually be increased. This is the only way to ensure prosperity and grow the economy.
Harper created a lot of useless tax credits, such as for families who purchase bus passes or sign up their kids for sports. Tax credits always benefit only the few, while the majority of taxpayers never get to see a penny of such “credits”, which cost the government a lot of money in revenue, while the overall tax burden on the average family is not reduced at all. The only ones benefiting from such loopholes, which is what tax credits are, are accountants who prepare people’s income tax returns.
US President Barack Obama is currently trying to eliminate all those loopholes and credits from the US tax code for corporations. In return, though, he plans to lower the corporate tax rate. His theory is, and he’s absolutely correct in his assumption, that when all those tax credits are eliminated and loopholes closed, the government will still see an increase in revenue from corporate taxes even after lowering the tax rate.
As a result of such an inhumane tax burden, the middle class in Canada has been wiped out, and two-thirds of Canadians have no or only negligible pension savings. When you have to pay the taxman first and foremost, there isn’t much left to save after paying for rent, mortgage, groceries, clothes and many other necessities of daily life – and in Canada those don’t come cheap at all and are about 15 to 35 percent more expensive than in the United States, for example.
Jason Kenney, Harper’s immigration minister and an avid user of Twitter, complained in a tweet about an article in the National Post that reviewed the Conservative government’s record on fiscal matters. According to the minister, the article ignored “$200B in tax relief & lowest tax”. Kenney then also claimed that the average family has saved $3,500 in federal taxes since 2005.