Call for a review of provincial tax cuts/increases.

Finance Minister Jerome Kennedy has now publicly acknowledged that increasing the HST remains a possibility for future budgets.  Due to the nature of consumer taxes, the HST falls more heavily on low and middle income people than on the wealthy.  A rough analysis of the HST proposal reaches the appalling conclusion that it would leave the majority of tax filers paying more taxes than they would have prior to the election of the PC government while leaving very large tax cuts for the wealthy largely intact.



Since this government has tacitly admitted that the tax cuts by the Williams government were not affordable, the opposition parties should call for a public report by the Department of Finance outlining the impact of those tax cuts and of the prospective tax hike on goverment finances and on individuals/families according to level of income. This report would not be difficult to prepare because most of the analysis already been done. The press releases for all three rounds of tax cuts came with backgrounders (here, here and here) explaining the size of the cuts according to income level. The later two only consider incomes up to $75,000 and $80,000 in what I think was a deliberate effort to conceal the degree to which the benefits of the cuts went to those with high income. 

I believe this issue would resonate with the public in a time of government cutbacks. There is a wide-spread sentiment that the benefits of the oil boom have gone to a narrow group of people, so the opposition would be smart to force the government to defend tax cuts for the rich, especially since they are officially open to taxing the poor.

Even if the government refuses to produce a report, this is a terrific opportunity to 1) hammer the government for their fiscal mismanagement, 2) expose the government's tendency to deny public access to important information, 3) offer a more progressive vision for dealing with our considerable fiscal challenges. Moreover, if a report is not forthcoming from government, opposition could commission a report of their own that would then shape discourse on this issue.

The opposition should take advantage of this excellent opportunity to both embarrass the government and steer public policy toward the least damaging solution to our budget problem: a sustainable tax regime that requires our wealthiest citizens to pay their fair share.