Britain Cuts VAT by 2.5%

What's this? I thought all left leaning parties, such as the Liberal Party of Canada, thought that cutting consumption taxes was a bad idea?

Seems that Britain's Labour Party disagrees with the "conventional wisdom" of their Canadian Liberal cousins... they've decided to follow in the footsteps of our very own Right Honourable Stephen Harper, by cutting the VAT (their version of the GST), as a way to help stimulate their economy. They announced today that they're cutting their VAT by 2.5%, from 17.5% to 15%.

Of course, they're also raising other taxes to compensate, and borrowing significant amounts of money... steps which I hope our Government won't emulate in these tough times. But I find it very interesting that other G8 nations are looking at doing at least one of the very things that Mr. Harper has been repeatedly critizied for doing years ago.

Harris to McGuinty: "Try looking in the mirror"

Former Premier Mike Harris (boy do I ever miss the guy...) has an opinion piece in today's National Post entitled, "How Ontario became a have-not"... where he appropriately lays much of the blame for Ontario's current economic instability and our recently aquired "have-not" status squarely on the shoulders of Liberal Premier Dalton McGuinty.

Over the next few days, expect to see them lash out and attack the messenger, rather than actually address the issues he raised.

"The main reason for Ontario's unprecedented "have-not" status is that economic growth in this province is weak, and is falling further and further behind the rest of the country. This decline did not have to happen. Going from first to worst in economic growth was preventable.

A major reason for our faltering economic growth is that Ontario's manufacturing sector is being hammered by high taxes. For far too long, Ontario has relied on a weak Canadian dollar to provide manufacturers with a "competitive" advantage. Now, energy and resource prices are driving up the value of our dollar and the U. S. economy is slowing. The so-called "dollar advantage" has been revealed as an illusion, and high taxes are now exposed as the millstone around the neck of our manufacturing sector.

The Ontario government's own Task Force on Competitiveness, Productivity and Economic Progress provides powerful evidence of Ontario's high taxes. Its 2007 report shows that Ontario has the highest taxation on new business investment in Canada. Even more compelling, it also reports that Ontario has the second-highest taxes on new business investment in the developed world.

To make matters worse, Ontario also has one of the highest personal income tax rates in the country, creating a major disincentive for talented people to settle, stay or remain here. This further weakens our economic and competitive position.

During a time of escalating international competition, a massive credit crunch and a probable recession, the Ontario government should be moving aggressively to reduce taxes and other barriers to growth. Failure to act will strangle the life out of Ontario's manufacturers, and drive them from this province, killing, maybe forever, the jobs they provide. The government must take action before it is too late.

To compound the high tax problem, since its election in 2003, the current Liberal government has gone on a spectacular spending spree that now threatens the future financial health of this province.

Following the failed paths of the David Peterson and Bob Rae regimes, over the last five years the provincial government has increased spending by an

average of 8% each year. During this same period, the Ontario economy grew in nominal terms by 4% annually. This means that the Ontario government is actually spending twice as much as it can afford. It has created a spending machine, and this machine can only be fuelled by red-hot economic times. This is simply not sustainable.

Had the government been living within its means for the past five years, Ontario would be in a much stronger position to respond to the wider global emergency than it is today. Instead, faced with a global liquidity crisis, a recession and plummeting revenues, the government is now looking at the very real prospect of returning to the massive, long-term structural deficits that we worked so hard to eliminate, and/or returning to massive cuts in government spending on public services. What a wasted opportunity."

STOP THE PRESSES...

Howard Hampton, the left-wing NDP leader, is ALSO calling for a reduction in the Liberal's Health "Premium"/Tax?

According to the provincial NDP leader, the health tax introduced by the McGuinty Liberals was “the biggest tax increase, and the most regressive and unfair tax increase, in the history of Ontario.” “Calling it a health tax was just a ruse,” Hampton said.

That can't be to comfortable... getting flanked on the right AND THE LEFT on your broken promise/tax increase?

Interesting to see how Warren recommends they spin this one...

John Tory and Faith-based Private Schools

Well, turns out where I'm staying has a wireless connection! I'll be too busy to really make use of it this week, however, I felt I should chime in on John Tory's upcoming campaign proposal regarding faith based education, since I went to a Christian elementary school for five years.

Here's the brief overview that I got from the CBC on the road today... John Tory supports a parent's right to opt for private faith-based education, but rather than doing so via a voucher based tax credit, he favours providing direct funding for these schools, provided that they in some measure come under the authority of their local public school board. At the same time, he favours increasing funding to the public system, not taking from the public system to fund faith-based education.

According to the CBC, Mr. Tory is planning to release more details on this tomorrow. However, based on the details mentioned by the CBC, here's my take on the idea... IT MIGHT JUST COST HIM THE ELECTION. Most of the people I know, who sacrifice to send their kids to private Christian schools, will never support such a plan... and might just be willing to actively campaign against it. (despite the common stereotype that they're rich... trust me, my parents are not) Here's just a few reasons why they'll never support it...

Firstly, people who choose to send their kids, like my parents, often do so to REMOVE their kids from the influence of the public system, and the boards that run them. These boards are the same ones who are implementing immoral sex education programs, and ramming humanistic philosophy down the throats of kids. Parents of faith often remove their kids from the public system in order to protect them from being overtly converted to humanism by the world.

Secondly, in order to receive funding, some degree of the school's autonomy will most certainly have to be given up... there's no way they'll be able to get at this money without the government attaching strings. Most parents greatly value this autonomy, which enables the schools to select the curriculum, the teaching staff, etc. Parents aren't likely to give that up willingly.

Thirdly, and what should be most important to John Tory, for many parents who support faith based education, this idea may just be enough for them to NOT vote for Mr. Tory, and just choose to stay home... or, if they're really bothered by it, as I'm starting to be, may just be enough for them to vote AGAINST Mr. Tory, by supporting Dalton McGuinty.

In an effort to throw a bone to a part of the PC base who support faith based education, he may have inadvertently thrown them a bone of contention instead... and since these parents are willing to sacrifice to send their children to these schools, you can be sure that they're going to do whatever it takes to ensure that the government doesn't get control of their schools.

This is a really bad move that may just be enough to cost him the election.

Tax credits are what these parents want, since they're having to pay TWICE for their children's education, once via property taxes, and once via private tuition fees. Rather than try to put forward an idea like this Mr. Tory, I would have done nothing about the whole private school issue. If I were you, I'd just try to forget this idea and let it quietly die between now and the October election.

Let me be crystal clear... if my local PC candidate supports this idea, I'll likely be staying home come election day. That's how important this issue is... Mr. Tory, you need to drop it NOW, otherwise you put your electoral chances in severe jeopardy.

We'll see what the details of the plan are. Please post links to anything you see in the comments, as I'll have a hard time following this while I'm away.

Libs: "Let's raise the GST"

I actually agree with Jason Cherniak on this one... thinking about re-rasing the GST is a political death wish. But, hey guys, by all means, go for it! ;-)

It's really simple... by rasing the GST to pay for broad based income tax cuts, you are rasing taxes on the poorest of the poor, in an effort to lower taxes on the middle class by a few bucks per year. People who earn below a certian dollar figure per year don't pay income tax, period. BUT, they do pay GST... admittedly, not much, but they still pay it on a lot of things. So, by rasing it even one point back to where it was, you are effectively increasing their taxes, simply to pass on that money to people in a higher tax bracket than they are. Yea... THAT will go over well.

Let's put another way... Dion: "Monsieur Layton, we give a couple of seats for you in Toronto and Vancouver... we do not needed them anyway."

Hypothetical Question for Garth

So, if you do join the Liberal Party of Canada, and the next Federal Budget delivers on Income Splitting for Canadians, how exactly will you vote? For, or against, Income Splitting? Just a question.

On income splitting, I have a thought... maybe I'm just being overly simplistic in my thinking, but couldn't it be done so that only the middle class (and not the upper-middle or upper class) will benefit?

Just make it so that only household incomes below a certain threshold, say $100,000 for example, would qualify. If they want to make it even tighter, make it so that only households that earn a combined $100,000, where the top earner earns a maximum of $80,000, qualify to split their income.

That then rules it out as being a "tax cut for the rich", and targets it to working families. I think the NDP would even have a hard time shooting that one down.