A continuing review of the Green Party of Canada’s Platform:
1.4 Fair taxes – fiscal reform
Most Canadians do not like paying taxes, especially if they think that the taxes are unfair or do not deliver good value for money. People do not like wasteful spending by an over-bureaucratized government. Fair enough. However, about half of Canadians say that they would not mind paying more taxes for a cleaner environment, better health care and education, and to support people in need.
Taxation and spending policies shape society by sending signals about which sectors of society governments think are important. Over the last six years, both the Conservatives and Liberals have used our tax system to benefit large corporations, reducing federal corporate taxes. Back in 2000, the general rate of taxation on corporate profits was 29.1%. By 2006, when the Harper government came into office, the corporate tax rate had been cut to 22.1%. We all remember our budgets consistently posted surpluses at that time.
No longer. Canada moved into a deficit just before the economic meltdown in September 2008. Due to cutting the GST, cuts to corporate income taxes and increased spending, the Harper government had eradicated the surplus just in time for a recession. With an empty cupboard, Canada has moved further into debt to fund the stimulus package. The latest estimate is that we are now running a $45-56 billion deficit.
Meanwhile, all through the recession, the Conservatives have continued to cut the corporate tax rate. Last year the rate fell to 18%. As of January 1, 2011, it fell to 16.5%, with a further cut to 15% planned for next year.
At the same time, the cost of living has increased. Canadians save less, carry more debt and work more hours for the same money. Even before the current recession hit, people were having a harder time providing for their families and paying for a decent place to live.
The Green Party believes in reforming our tax system to make it fairer and more in tune with Canadians’ desire for a healthy environment, a sustainable economy and a vibrant, caring society. It makes no sense to subsidize the wealthiest corporations on Earth – the oil companies. We must remove these perverse subsidies immediately, not in the slow, “grandfathered” approach of the Conservatives’ 2007 budget.
The Green Party will reduce taxes on things we all want, like income and employment, and we will increase taxes on things we do not want – like pollution that harms people and our environment.
Our “green tax cuts” will be progressive, with a schedule that gives industry time to gear up or down. And they will be revenue neutral because a tax shift is not a tax grab. Income and payroll taxes will decline and the changes will help, not hurt, less fortunate members of our society.
To set the right prices, we have to change to a “true” or “full-cost” accounting method that incorporates economic, social, and environmental costs and benefits in the national accounts. Using this method, products and services are taxed, and thus priced, according to the positive or negative impacts caused throughout their lifecycle. We have already done this with tobacco products. Such taxes help consumers make more rational choices.
There are other ways to put taxes to work improving our society. Our tax system must be designed to reduce poverty, encourage environmentally-beneficial activities, and generate more wealth for the 90 % of Canadian families who are currently working harder without getting further ahead.
The Greens’ fiscal plan is straightforward: gradually reduce our debt, give clear tax signals that enable companies to pursue profits on a level playing field, and shift taxes to ensure that both revenue streams and expenditures meet social, economic and ecological goals.
Green Party MPs will:
- Institute a full range of “polluter pays” taxes, including a carbon tax designed to reduce the use of fossil fuels by making them more expensive to produce and burn. All these taxes will be revenue neutral. The revenues generated will be offset by reduced taxes on personal income, payroll and on green products and technologies. The new taxes will also be non-regressive (e.g., the carbon tax will include a rebate program for low-income Canadians and for Canadians living in rural areas).
- Phase-in carbon taxes to allow businesses and individuals time to make adjustments. In order to maintain a level playing field for Canadian businesses with respect to foreign competitors, carbon-based tariffs will be introduced against countries that apply no carbon tax (or other equivalent mechanism to curb GHG emissions) or apply a lower rate of carbon tax than Canada.
- Return Corporate Tax rates, except for the Small Business tax rate, to the 2006 level.
- Eliminate personal taxes on incomes below the low-income cut-off (no taxes on incomes of $20,000 or less).
- Work with the provinces to increase taxes on tobacco and alcohol.
- Encourage use of Canada Revenue Agency’s online NETFILE tax filing system, which saves Revenue Canada money, by giving users an automatic $10 tax credit.
- Develop a specific tax-shifting schedule to provide tax incentives and direct rebates to businesses and individuals investing in the low-carbon economy (e.g. installing solar hot water systems, refitting homes and businesses to conserve energy).
- Provide increased tax breaks for Canadians who donate to registered charities.
(See Part 4: PEOPLE for more on family-friendly taxation, including income splitting)
Comments and discussion are welcomed. I am examining this as I go to gain a better grasp of their platform and invite all who are interested to do the same with comments and discussion.