Checking the government’s numbers on taxes and spending

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“…we want to see taxes lowered in this country. That is why they are now $3,000 lower for every Canadian family in this country.”

Prime Minister Stephen Harper in Question Period, May 7, 2013.

HsuT01“Earlier today the Prime Minister claimed, as have other members on the Conservative side, that every family of four would save $3,000 a year in taxes. It turns out that the family that saves $3,000 in taxes is a family of four with two working parents making an income of $100,000. I do not know about others, but that is way above the median income in my riding. Furthermore, the share of the national debt of that family of four has increased by $16,000 in the last five years, so those tax savings are totally illusory.”

Ted Hsu, MP, House debates, May 7, 2013

I am relying on research provided by the Ministry of Finance to MacLean’s magazine:

On budget day, Flaherty repeated a boast often heard from Tory ministers and MPs—that Conservative policies mean the average family pays $3,000 less in tax every year. To arrive at that figure, his department imagines a couple with two children. Before taxes, she makes $60,000, he makes $40,000. Income tax cuts since 2006, when the Harper government first took office, save them $1,963, they pay $960 less on purchases thanks to the Tories’ two-point cut in the GST, and they pocket $76 in child benefits.

            John Geddes, MacLean’s, March 28, 2011

http://www2.macleans.ca/2011/03/28/targeting-the-middle-class/

Sometimes it’s good policy to lower taxes. Sometimes it’s good policy to have a budget deficit. But always, an important part of my job is to check the federal government’s numbers when it comes to taxes and spending.

There are two reasons why I rose in the House of Commons on May 7, to counter Prime Minister Harper.

First, the $3,000 in tax savings does not apply to all families, as claimed. Most households in Kingston and the Islands make much less than $100,000, and their tax savings would be much lower than the $3,000 claimed by Mr. Harper.

Secondly, at the same time that the government cut taxes, they allowed the federal government debt to increase from $450 billion to $600 billion over the last five years. If you give every Canadian an equal share of that federal debt increase, then every family of four now owes $16,000 more. We didn’t really come out ahead after those tax cuts. Even the family of four making $100,000 got only $15,000 after five years of tax cuts!

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