Sunday, January 18, 2009

Ignatieff takes aim at Harper's tax-cut plan.

It is a bit odd that Harper should be criticising Harper on this issue since Ignatieff himself favors tax cuts. However Ignatieff favors targetting the cuts to the less well off since he thinks that would create a bigger stimulus and is fairer. His point about these cuts reducing the ability of governments to spend and creating structural deficits is sound enough but then so do Ignatieff's own tax cuts and also the whole spending spree involved in the stimulus. The result will be a large deficit that will certainly be used in the future as an argument for cutting social programs and govt. spending.
Broad tax cuts are usually rather popular so it is a bit strange that Ignatieff should go against the flow on this issue, especially since he does not intend to back up his criticism by action against the budget I expect.

Ignatieff takes aim at Harper's tax-cut plan
'Our children will be paying the price'
John Ivison, National Post Published: Saturday, January 17, 2009

Conservative plans for broad-based middle-income tax cuts in the forthcoming budget are unaffordable and would not be in the national interest, Michael Ignatieff said yesterday.
"This is not the moment for broad-based tax cuts because we think it will lead us into structural deficit and our children will be paying the price for Stephen Harper's mistakes for years to come," the Liberal leader said in an interview with the National Post.
Mr. Ignatieff said he would have to see the government's deficit projections before deciding whether to vote against the budget. "But it is appropriate for me to register very substantial concerns here and say we don't want to see structural deficits. If that's where we are going, I don't like the sound of it at all."
However, Mr. Ignatieff said he agreed with Gordon Campbell, the Premier of British Columbia, who said after yesterday's First Ministers meeting that an election is not what the country needs now.
"I don't think that any Canadian would disagree with Premier Campbell, that if we can avoid an election, that would be a good thing. But don't conclude from that that I'm afraid of an election. If we have to fight an election, we will."
The Prime Minister has hinted that the Jan. 27 budget will include significant middle-class tax cuts -- a position confirmed by a number of senior Conservatives. "We have to give the Conservative base something," said one Tory.
Mr. Harper told the Post on Thursday that the middle class has to share in the stimulus program, since it "is paying most of the freight."
However, Mr. Ignatieff said that tax cuts should be targeted at low-income Canadians, who would spend all their disposable income rather than save it. His preference would include enhancing the Working Income Tax Benefit, a tax credit for lower-income earners, and the Canada Child Tax Benefit, a tax-free monthly payment available to eligible Canadian families to help with the cost of raising children.
Mr. Ignatieff said Mr. Harper's intention is to reduce the federal government's ability to spend money. "This is a philosophical disagreement -- it's not just about targeting tax cuts," he said.
He added that the coalition agreement with the New Democrats, supported by the Bloc Quebecois, has been a "useful instrument" for the opposition parties and the agreement is still alive.
"Two things are happening. Firstly, [Mr. Harper] seems to have a better sense of what constitutes confidence in the House of Commons. I welcome that development and want to see proof of it.
"Secondly, he has enhanced the stimulus package, which is a direct result of the pressure he's been put under."

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