PST Cut Misguided
May 02, 2007
Progressive Conservative Leader Hugh McFadyen announced recently that he would reduce Manitoba’s Provincial Sales Tax (PST) by one percent if elected.
The PST cut largely favours those in the upper and middle class tax brackets since these are the people who have the disposable income to purchase more expensive items. Like a big screen television, for example. On one that costs, say, $2,200, a savings of only $22 would be realized. How much would the affluent save on a new SUV, do you think? Over the course of a year what would a high income earner save? It’s safe to say it would be much more than a single mother working two minimum wage jobs to take care of her kids. She’s the kind of person who would suffer from withdrawing $190 million from the Provincial Treasury.
But we hear the continuous drone of the tax-cutters who tell us we need to keep up with Saskatchewan (where they cut their PST) or Alberta (which is enjoying an economic boom from their plentiful oil reserves). If not, our educated and well-paid are going to pick up their families, quit their jobs and move west to greener pastures.
The level of cuts we’ve seen in Manitoba has been unprecedented. In Budget 2007, Finance Minister Greg Selinger states that the previous seven budgets “have contained the largest tax cuts ever delivered to Manitoba families and businesses.” Budget 2007 itself contained $297 million in new tax cuts and introduced new education property tax, personal tax, and business tax relief.
The small business tax rate has been reduced to the lowest rates in Canada; the Corporation Income Tax Rate has been reduced; the Corporation Capital Tax will be phased out by 2011; middle-income tax rates have been reduced; the Education Property Tax Credit has been increased. The list goes on and on.
Let’s face it – we’d all like to pay less taxes. Every individual and every business would like to keep a greater share of their income. But we seem to forget that tax cuts come at a price. The taxes that we pay fund our social safety net – health care, infrastructure, public safety – all of these services rely on tax dollars to operate.
A tax reduction of any kind means that our government has less flexibility in offering important public programs. And at some point programs, and jobs, have to be cut if this continues unabated. It doesn’t take a financial expert to understand that one cannot continue to cut taxes and increase or even maintain program spending indefinitely.
The McFadyen proposed PST cut would reduce government revenue (conservatively) by at least $190 million annually, and it’s the single moms of Manitoba who’ll end up paying more for services to subsidize a tax savings on new big screen TVs and SUVs.
Comments
Comments are now closed
What's my philosophy on helping "poor" people. Well, it depends.....if they have addiction issues, then I think we should help them help themselves, but if they are poor by choice and are lazy , because let's face it , some people are, then that's their choice. The fact is the rich are taxed and punished at a much higher rate than the middle class.
JImcotton - -0001-11-30 00:00
It's always interesting to hear Libertarians talk about how to improve the lot of poor people. Jim, what's your philosophy on helping poor people, aside from letting them eat cake? Debtors prison? Nice to see there are people out there still talking about how hard done by rich people are.
Jeff - -0001-11-30 00:00
As long as they're not happy in Fort Whyte, then I'm happy.
jeff - -0001-11-30 00:00
Maybe I am wrong, but isn't Gary Doer rich ??? I mean his wife does run a big polling company after all. The same polling company that shut down it's vancouver office when the employees unionized. There are lots of "rich people" in the NDP too......and most of them earned it. It drives me nuts when people start slagging rich people because we all have the same opportunities.....but most people ignore them because they are work........I think Edison said that once too.
JimCotton - -0001-11-30 00:00
Any tax cut is a good tax cut. GaryDoer.com
GaryDoer.com - -0001-11-30 00:00
Looks like Team Hughligan has discovered the blog....
Jeff - -0001-11-30 00:00
stick it to the rich people...no one should be happy! lol!!
poor rich people - -0001-11-30 00:00