By eliminating several tax credits, Ottawa increased income taxes for many Canadians.
Families that previously used the income-splitting tax credit could pay up to $2,000 more in federal income taxes.
The Wynne government’s “Fair Hydro Act” borrows money, which must be paid back, to lower energy costs.
On Wednesday, the day after delivering the 2014 federal budget, Finance Minister Jim Flaherty set off a firestorm by offering his view on income-splitting, a platform commitment the Conservatives made for when the government returns to a balanced budget (likely next year). Im not sure that, overall, it [income-splitting] benefits our society, Minister Flaherty stated, preferring instead to, reduce taxes more.
While readers of this page will know we havent always agreed with Minister Flaherty over the years, he is right on the money with respect to income-splitting.
Milton Friedman was famous for his one-liners. One of his most repeated lines was: I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible. Friedman believed government was too large and intrusive, and that by cutting taxes, the size of government would be reduced.
Most finance ministers say now is not the time to cut taxes. But the experience of British Columbia provides a different perspective. In 2001, after a decade of dismal economic performance, the newly elected government enacted a series of bold, incentive-based tax cuts. The results have been nothing short of remarkable. If Canadian governments are worried about the health of the economy, they should follow B.C.'s lead and cut taxes.