Friday, April 19, 2013

Provincial Tories talking BS on taxes...again.

Well this is pretty rich.  On Wednesday, April 17th Tory backbencher Glen Littlejohn introduced a private members resolution lauding his party for the regressive tax cuts that helped created our fiscal crisis:
"BE IT RESOLVED that this hon. House commends the government for returning half a billion dollars a year to Newfoundlanders and Labradorians by reducing personal income taxes and supports the government in its decision not to increase personal income tax rates to address the Province's fiscal challenge. "
As we explained some time ago, the benefits of these tax cuts were heavily concentrated on the rich, but Littlejohn tries to spin it like all the money went to senior citizens and the poor. You can read it all in Hansard, but the tax relief he describes (using his numbers) is:
  • $30 million increase for Low Income Seniors Benefit,
  • $7 million for Seniors tax credit (my calculation based his information),
  • $42 million home heating rebate,
  • $17 million on a low-income tax deduction (rough calculation based on his numbers).
Add these numbers up and you get less then $100 million dollars. What about the other $400 million that Littlejohn is bragging about? Where did that go? Maybe Jerome Kennedy can enlighten us.

"In 2013, a single individual with taxable income of $50,000 will save over $1,600, or 30 per cent, compared to the amount of taxes they would have paid in 2006 ... So, what we are doing, Mr. Speaker, the tax reductions are benefiting the lower income earners. It is not benefiting the rich – again, whoever the rich may be."

Wow I guess he's right. All the money must go to low income earners, because rich people don't exist.  Next thing those craaazy lefties will have us taxing leprecauns and unicorns.

But hang on, don't provincial cabinet ministers make something like $150,000 a year? Someone earning that much will save about $7,000 a year from the tax cuts.  Sounds like a better deal than $1,600 to me, but what do I know? I'm not a finance minister.

Kennedy goes on:
"The suggestion here has been by the Newfoundland and Labrador Federation of Labour in their report, and the NDP, is that we should look at adding a fourth tax bracket and tax the rich. Well, let me just give you an example of how much money we would make if we brought in a fourth bracket and we raised taxes 1 per cent on people making more than $100,000, those same people who are paying 30 per cent of total taxes to date. We would make $12.1 million."

Funny how those rich people that don't exist are paying 30 percent of all income taxes, eh?  Anyway the CCPA report Kennedy references estimates more like $18 million, but lets take Kennedy's figure. It is true that $12 million seems like a drop in the bucket compared to the staggering $1000 million structural deficit produced by the colossal incompetence of this Tory government, but $12 million is not exactly pocket change. And lets remember that the marginal tax rate on income over $70,000 has been cut 6%, so restoring the rate above $100,000 to what it was in 2006 would raise $70 million (or $110 million with CCPA estimates), while still retaining about $4000 of tax relief for everyone earning a six figure salarie. That money could pay for, say, the salaries of around 1500 public sector workers, to use a completely hypothetical example.

Kennedy concludes,
"Everyone has achieved savings, but because of the profile of the tax filer in this Province, the savings have been incorporated more, I would suggest, toward the middle-income earners and the lower-income earners. That is just the way it breaks down."

No Mr. Kennedy, that is how your credibility breaks down, along with your public support and your career in politics. But I'm sure you have a comfortable sinecure waiting for you in 2015 as reward for the 8 billion dollar Muskrat Falls corporate welfare project you helped launch on the backs of those middle and lower-income earners whose interests you pretend to care about.

 Let me end by quoting Dale Kirby of the NDP's response to Kennedy's condescension.
"One of the things we wanted to [...] was raise the basic personal exemption for individuals paying taxes, raise the basic personal exemption from the $7,989 now to $9,000. It would make us more competitive in the country and put more money back into the pockets of people who need it..."
Raising the basic personal exemption is the simplest and most equitable way to share our oil wealth. In a just world, this is the form the tax cuts would have taken. But as Occupiers know, the world is only as just as we choose to make it.


occupier said...

Was expecting some writing from you after what was said today (and all around a self-congratulatory motion). What a joke they are.

Anonymous said...

Great post! Keep it up.

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