Tories Exaggerating Tax Cuts

[jdobbin]

http://www.ctv.ca/servlet/ArticleNews/stor...22?hub=Politics

The federal Conservative government is being tricky and is exaggerating when it boasts that it has cut taxes by almost $41 billion, says the Canadian Taxpayers Federation.

The group says that while the Tories have cut taxes since coming to office 18 months ago, they are inflating the size of those cuts.

"The problem for taxpayers is the amount is not correct and is overstated by at least $8.8-billion,'' federation president John Williamson said.

"In fact, the overall tax burden is decreasing, but not to the extent the Conservatives would like Canadians to believe.''

He claims there is some sleight of hand at work.

"Three tricks were used to arrive at the larger -- and more impressive -- figure. The Conservatives magically credit themselves $500 million for enacting measures announced in the 2005 Liberal budget; they include an income supplement program for the working poor worth $1.2 billion as a tax cut instead of properly classifying it as an expenditure; and mysteriously calculate the 2006 budget's half-point personal income tax increase as a multibillion dollar tax reduction.''

Williamson says the government risks losing credibility over the issue.

"If Canadians cannot trust what politicians tell them about tax and spending levels, their faith in government and its officials will fade. This is never a good thing in a representative democracy.''

When in Opposition, the Conservatives used to quote Taxpayer Federation figures in Parliament. I wonder if they will take note of these figures.

Edited August 22, 2007 by jdobbin

[gc1765]

I too noticed that the Conservatives took credit for the 0.5% reduction in the lowest income bracket, when in fact it was a 0.5% increase. They also took credit for raising the basic personal exemption, when in fact they lowered it.

[GreenWhiteandPink]

They should of kept on lower income taxes rather than bring in the pointless GST cut. I would rather have more money on my paycheque to spend/save, than to have to spend money in order to save taxes.

[Michael Bluth]

I too noticed that the Conservatives took credit for the 0.5% reduction in the lowest income bracket, when in fact it was a 0.5% increase. They also took credit for raising the basic personal exemption, when in fact they lowered it.

The lowest bracket is 1/2 point lower than it was when they took office.

The line about an increase is Liberal propaganda. Yes, they promised a full point cut to the lowest bracket but the electorate turfed them before they had the opportunity to enact it.

[GreenWhiteandPink]

Actually YOUR WRONG!

The lowest bracket in for the 2005 year was 15%, the conservatives raised it to 15.5% for 2007! 2006 had a blended rate 15.25% the difference betweem the two.

CRA Website

The lowest bracket is 1/2 point lower than it was when they took office.

The line about an increase is Liberal propaganda. Yes, they promised a full point cut to the lowest bracket but the electorate turfed them before they had the opportunity to enact it.

Edited August 22, 2007 by GreenWhiteandPink

[gc1765]

The lowest bracket is 1/2 point lower than it was when they took office.

The line about an increase is Liberal propaganda. Yes, they promised a full point cut to the lowest bracket but the electorate turfed them before they had the opportunity to enact it.

We've been through this before...we all paid 15% tax on the lowest income bracket until July 1, 2006 when the 0.5% increase came into effect. Now we are all paying 15.5%. That's a 0.5% increase. What is propaganda is the Conservatives trying to claim that is a decrease.

[jdobbin]

Actually YOUR WRONG!

The lowest bracket in for the 2005 year was 15%, the conservatives raised it to 15.5% for 2007! 2006 had a blended rate 15.25% the difference betweem the two.

We had this conversation months ago but some people refused to believe it.

[jdobbin]

We've been through this before...we all paid 15% tax on the lowest income bracket until July 1, 2006 when the 0.5% increase came into effect. Now we are all paying 15.5%. That's a 0.5% increase. What is propaganda is the Conservatives trying to claim that is a decrease.

It certainly is something that Canadian Taxpayers Federation has noted loudly in their news release. Perhaps some Tories will say they are a shill for the Liberals now.

Edited August 22, 2007 by jdobbin

[geoffrey]

I too noticed that the Conservatives took credit for the 0.5% reduction in the lowest income bracket, when in fact it was a 0.5% increase. They also took credit for raising the basic personal exemption, when in fact they lowered it.

Pragmatically, yes.

But in reality, those changes were never legislated. Liberals used their civil service power to strongarm in some new tax forms, but in reality, the rates were never passed in the House of Commons.

That said, the CPC has been a terrible government for tax cuts. The percentage of government spending (and tax collection) has skyrocketed as a proportion of the GDP. As well, they had a huge windfall surplus that they used to be so critical of the Liberals for.

There is nothing fiscally conservative about this group in Ottawa. Nothing at all.

[Michael Bluth]

Pragmatically, yes.

But in reality, those changes were never legislated. Liberals used their civil service power to strongarm in some new tax forms, but in reality, the rates were never passed in the House of Commons.

Exactly.

The Conservatives are doing the best they can with the hand they have been dealt.

Does anyone think we'd even have a surplus right now if Paul Martin had stayed in power?

[old_bold&cold]

I smile a lot when I read thru this thread. I really wonder at just who really believes that the accuracy of these things is an absolute? They round a billion up here and round down a million there, and then give a ball park figure. Not one that is supposed to be accurate to the penny. If this is what the opposition has in mind to use against Harper in an up coming election.... well majority govenment will soon be coming. It is so sad that the Liberal and NDPer's can not seem to find any substance to cause an uproar. I know this is still summer guys, but that is no excuse for this kind of stupid politics. If this kind of thing is all you can find to gripe about, then just admit that Harper is going to hold his minority government right thru to the fixed election date.

Dion needs someone to be able to find something to take a stand on that will have some staying power. Hell after his " the water isd being sold " cry from last week being shown that he has absolutely no comprehension about what really goes on in the world, that the rest of us live, he needs to be taken by the hand and guided back to reality. So instead of crying about exaggerated numbers, first get your leader the help he needs to maybe even be seen as just spaced out rather then totally insane. If this type of thing is how the opposition is going to spend their time and efforts, well then, I do not see there being any real opposition when the house sits.

[jdobbin]

I smile a lot when I read thru this thread. I really wonder at just who really believes that the accuracy of these things is an absolute? They round a billion up here and round down a million there, and then give a ball park figure. Not one that is supposed to be accurate to the penny. If this is what the opposition has in mind to use against Harper in an up coming election.... well majority govenment will soon be coming. It is so sad that the Liberal and NDPer's can not seem to find any substance to cause an uproar. I know this is still summer guys, but that is no excuse for this kind of stupid politics. If this kind of thing is all you can find to gripe about, then just admit that Harper is going to hold his minority government right thru to the fixed election date.

You'll notice it was the Canadian Taxpayers Federation that says Tories are exaggerating tax cuts, not the Opposition. And it used to be every time CTF criticized the Liberals, the Tories used to mention it in the House.

It's quite possible that the Tories might old on till the fixed election given how much money they are pouring into Quebec. That must make you smile as well.

[jdobbin]

Pragmatically, yes.

But in reality, those changes were never legislated. Liberals used their civil service power to strongarm in some new tax forms, but in reality, the rates were never passed in the House of Commons.

That said, the CPC has been a terrible government for tax cuts. The percentage of government spending (and tax collection) has skyrocketed as a proportion of the GDP. As well, they had a huge windfall surplus that they used to be so critical of the Liberals for.

There is nothing fiscally conservative about this group in Ottawa. Nothing at all.

If those rates are not policy, why does the government have it on their website now and why are people allowed to back file at the 15% figure? Surely after two years, the Conservatives would have removed that number if it wasn't true. Are you suggesting that Revenue Canada is doing their own thing even now because they were strongarmed by the Liberals?

Here is the CRA site for 2005.

http://www.cra-arc.gc.ca/tax/individuals/f...005_rate-e.html

Federal tax rates for 2005 are:

15% on the first $35,595 of taxable income;

22% on the next $35,595 of taxable income;

26% on the next $44,549 of taxable income; and

29% of taxable income over $115,739.

Here is the CRA rate for 2006:

http://www.cra-arc.gc.ca/tax/individuals/f...006_rate-e.html

Federal tax rates for 2006 are:

* 15.25% on the first $36,378 of taxable income, plus

* 22% on the next $36,378 of taxable income (on the portion of taxable income between $36,378 and $72,756), plus

* 26% on the next $45,529 of taxable income (on the portion of taxable income between $72,756 and $118,285), plus

* 29% of taxable income over $118,285.

Do you contend that these numbers are not accurate?

As far as the rest of your post goes, I agree. The Tories just spend and spend. I can't even keep up with all the announcements anymore.

[bk59]

Pragmatically, yes.

But in reality, those changes were never legislated. Liberals used their civil service power to strongarm in some new tax forms, but in reality, the rates were never passed in the House of Commons.

In reality the rate everyone paid was increased by the Conservative government. How does that not count as raising taxes (in that one area)?

Exactly.

The Conservatives are doing the best they can with the hand they have been dealt.

Does anyone think we'd even have a surplus right now if Paul Martin had stayed in power?

Yes, we probably would have a surplus under Paul Martin. Why would I say that? Probably because of the numerous and consistent surpluses he reported while Finance Minister and Prime Minister. The same surpluses that the Conservatives used to complain about.

I smile a lot when I read thru this thread. I really wonder at just who really believes that the accuracy of these things is an absolute? They round a billion up here and round down a million there, and then give a ball park figure. Not one that is supposed to be accurate to the penny. If this is what the opposition has in mind to use against Harper in an up coming election.... well majority govenment will soon be coming. It is so sad that the Liberal and NDPer's can not seem to find any substance to cause an uproar. I know this is still summer guys, but that is no excuse for this kind of stupid politics. If this kind of thing is all you can find to gripe about, then just admit that Harper is going to hold his minority government right thru to the fixed election date.

Dion needs someone to be able to find something to take a stand on that will have some staying power. Hell after his " the water isd being sold " cry from last week being shown that he has absolutely no comprehension about what really goes on in the world, that the rest of us live, he needs to be taken by the hand and guided back to reality. So instead of crying about exaggerated numbers, first get your leader the help he needs to maybe even be seen as just spaced out rather then totally insane. If this type of thing is how the opposition is going to spend their time and efforts, well then, I do not see there being any real opposition when the house sits.

As has been pointed out the CTF is not an opposition party. And quite frankly the types of things being lied about here are not rounding errors. Giving money to someone is not a tax cut. You cannot claim that you cut taxes if the cut happened before you came to power.

Bottom line: the new government is the same as the old government. Figures will be manipulated to cast the government in the best possible light, even if it means talking nonsense to do it. The other thing that always stays the same is the partisan shots. One moment the CTF is a great organization exposing the Liberal government's faults in its tax policy. The next moment it is apparently an organization used by the Liberal opposition to slander the Conservative government. And don't get me wrong, there are Liberal supporters who do the same. It is quite tiresome.

[Michael Bluth]

Yes, we probably would have a surplus under Paul Martin. Why would I say that? Probably because of the numerous and consistent surpluses he reported while Finance Minister and Prime Minister. The same surpluses that the Conservatives used to complain about.

Let's take a closer look at Martin's record as PM.

He was only PM for the entirety of one fiscal year, 2004-05. The surplus for that year was $1.4 Billion. A surplus 75% smaller than any of the other surpluses recorded in our current seven year string of surplus budgets. Why? He raised program spending by 15% over the previous fiscal year.

Are you really sure we would probably have a surplus under Paul Martin?

Link

Edited August 23, 2007 by Michael Bluth

[jdobbin]

Yes, we probably would have a surplus under Paul Martin. Why would I say that? Probably because of the numerous and consistent surpluses he reported while Finance Minister and Prime Minister. The same surpluses that the Conservatives used to complain about.

Hard to believe anyone would actually believe that the surpluses would suddenly have ended in 2006 if the Liberals had won. They consistently underestimated how much money was coming in just so they could have those monstrous surpluses.

Most of the surplus that the Tories were able to report in their first year in office was because of what carried over from the Liberal's last budget.

[Michael Bluth]

Hard to believe anyone would actually believe that the surpluses would suddenly have ended in 2006 if the Liberals had won. They consistently underestimated how much money was coming in just so they could have those monstrous surpluses.

Most of the surplus that the Tories were able to report in their first year in office was because of what carried over from the Liberal's last budget.

Hard to believe you can't actually read other people's posts.

Do you honestly believe Paul Martin would have suddently ended the spending spree?

[jdobbin]

More on the confusing policy of the Tories on tax cuts.

http://www.canada.com/nationalpost/financi...b35&k=46536

Further, he noted, the Tories are calling the 2006 budget's half-point personal income tax increase as a multi-billion-dollar tax reduction.

However, Flaherty has previously denied there was a tax increase -- saying the Liberal cut, while in effect for the 2005 tax year, had not yet been passed into law.

A spokesperson in Flaherty's office reiterated the minister's position Wednesday.

"A tax cut is not a tax cut until it is law," said the minister's press secretary Chisholm Pothier.

Pothier noted that the minister agrees that Canadians are still overtaxed and that the government is committed to further tax cuts.

Still, Flaherty's own budget shows that under the Liberals the personal income tax rate was lowered and under the Conservatives that it was raised.

"The lowest personal income tax rate was reduced to 15 per cent from 16 per cent effective January 1, 2005. The rate is 15.5 per cent effective July 1, 2006," the Finance Department says in an appendix to Flaherty's first budget. "Accordingly, the full-year rate is 15 per cent for 2005, 15.25 per cent for 2006, and 15.5 per cent for the 2007 and subsequent taxation years."

This is not the first time the Conservative government has been accused of exaggerating the amount of tax relief it has delivered.

After Flaherty's first budget, economic think-tank Global Insight calculated the actual relief in that budget was only about half of what was being claimed.

Not only did the government claim to be cutting the lowest personal tax rate when it was in fact raising it, the budget also reduced the amount that, under the Liberals, taxpayers would have been able to earn before being taxed, Global Insight chief economist Dale Orr noted.

So that is two different groups who say they raised taxes instead of lowering them: Canadian Taxpayers Federation and Global Insight.

CTF goes on to say:

Not only is the relief in the past two Tory budgets nearly $9 billion less than claimed, it is less than was given to Canadians by the former Liberal government in a single budget, says the head of a taxation watchdog group.

[Michael Bluth]

More on the confusing policy of the Tories on tax cuts.

It's not confusing at all.

Paul Martin proposed a national daycare program, but it was never enacted into law. Are the Conservatives considered to have cut that program?

By any reasonable measure no? By your confusing 'logic' yes?

[gc1765]

It's not confusing at all.

Paul Martin proposed a national daycare program, but it was never enacted into law. Are the Conservatives considered to have cut that program?

By any reasonable measure no? By your confusing 'logic' yes?

All that matters to most people is how much they actually pay in taxes, and as I have noted before, we all paid 15% before the Conservatives increased it. If someone had their child enrolled in a national daycare program, but that daycare program was never "officially" law, and the Conservatives got rid of that daycare program, then yes they would be considered to have cut that program. Otherwise your comparison is not valid.

[jdobbin]

All that matters to most people is how much they actually pay in taxes, and as I have noted before, we all paid 15% before the Conservatives increased it. If someone had their child enrolled in a national daycare program, but that daycare program was never "officially" law, and the Conservatives got rid of that daycare program, then yes they would be considered to have cut that program. Otherwise your comparison is not valid.

I can't understand what sort of tactic to say that it really wasn't made into a law when in fact, 15% is what everyone paid before the Tories increased it. Even two independent tax critics point that out.

[bk59]

He was only PM for the entirety of one fiscal year, 2004-05. The surplus for that year was $1.4 Billion. A surplus 75% smaller than any of the other surpluses recorded in our current seven year string of surplus budgets. Why? He raised program spending by 15% over the previous fiscal year.

Are you really sure we would probably have a surplus under Paul Martin?

So your proof that Paul Martin could not have delivered a surplus is that the surplus he delivered was less than you wanted? You can propose all the "what if" scenarios you want, but the fact remains that he still had a surplus and given his record as Finance Minister it seems unlikely that things would have changed as dramatically as you claim.

It's not confusing at all.

Paul Martin proposed a national daycare program, but it was never enacted into law. Are the Conservatives considered to have cut that program?

By any reasonable measure no? By your confusing 'logic' yes?

I have to agree with gc1765 here. If I pay 15% one year and then the next year I pay more than that, then yes, my taxes have gone up. There is nothing confusing about that. You can dance around the mechanics of how that happened all you want, but the fact remains that Canadians paid more in taxes after the Conservatives became the government and implemented their policies. Comparing this to an election promise is just plain wrong. No one was enrolling their children in a national daycare plan and so there was nothing to take away. People were paying 15% and then the Conservatives made the number 15.5%.

[bk59]

I can't understand what sort of tactic to say that it really wasn't made into a law when in fact, 15% is what everyone paid before the Tories increased it. Even two independent tax critics point that out.

I guess when you want to exaggerate your numbers you have to do whatever you can to justify it. Although it does seem a bit ridiculous to try and convince people that the 15% they paid one year is somehow more than the 15.25% and 15.5% they had to pay the next two years.

I also find it interesting to see that both groups are criticizing the approach as well as the numbers. Personally I would rather see broad tax cuts that help everyone rather than the specific, targeted cuts that have been introduced by the Conservative government. Both groups have a very good point that this just makes the tax code that much more complicated and may not deliver the intended results.

[Michael Bluth]

So your proof that Paul Martin could not have delivered a surplus is that the surplus he delivered was less than you wanted? You can propose all the "what if" scenarios you want, but the fact remains that he still had a surplus and given his record as Finance Minister it seems unlikely that things would have changed as dramatically as you claim.

It's called trend analysis. Martin's 57 priorities all involved increasing Government spending. He proved his penchance to do so his one and only full fiscal year as PM.

If he would have kept governing with the same style his promises would have involved continually increasing spending.

Much better to judge him on that than what he did while answering to Chretien.

[jdobbin]

I also find it interesting to see that both groups are criticizing the approach as well as the numbers. Personally I would rather see broad tax cuts that help everyone rather than the specific, targeted cuts that have been introduced by the Conservative government. Both groups have a very good point that this just makes the tax code that much more complicated and may not deliver the intended results.

I hear you there. Broad based tax cuts based on income are fair and in keeping with the large surpluses we are seeing. I never liked the GST cut nor the confusing tax credit schemes the Tories have cooked up for everything from daycare to sports activities.

I hope that Dion doesn't fall for the trap of split incomes. He has been circling the issue for a bit. I think it is not as fair as individual tax cuts.

It is interesting to note that CTF points out that the Liberals had greater tax decreases than in two Tory budgets.