Flaherty's Personal Income Tax Cuts Modest And Temporary

"Finance Minister Flaherty is fond of telling us that Canadians pay too much tax," it said, noting that last week's economic statement promised about $60 billion in tax relief over the next five years. However, almost 60 per cent of that is the goods and service tax reduction, a cut that Global Insight say will do little to boost the overall performance of the economy. "Only 18 per cent is in personal income tax reductions," the report said. "From almost any perspective, the personal reductions in the economic statement were very small, smaller than they could have been, and smaller than they should have been." The economic statement, which was widely perceived as a pre-election mini-budget, reduced the lowest personal income tax rate to 15 per cent from 15.5 per cent, retroactive to January 1, 2007. It also increased the amount people could earn before being taxed, providing $10.9 billion in personal income tax relief over the 2006- 2013 period, with about about half of it this year and next. "What the Finance Minister Flaherty didn't tell us is that the lowest marginal rate was 15 per cent in 2005, and in 2006 until the Conservative government raised it to 15.5 per cent in budget 2006, to help finance the first GST reduction," Orr said, adding that the rollback of the earlier Tory tax hike accounted for almost 80 per cent of the total personal income tax relief . "Thus, this personal income tax 'relief' is relief only because the Conservative government took it away in their budget 2006, to have it restored again in the November 2007 economic statement." ... http://www.canada.com/topics/news/politics/story.html?id=507ce89a-b935-4d6c-b38c-836a6ca58526

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