When ‘taxes’ ceased to be a dirty word in politics

Are tax hikes no longer the third rail of Canadian politics?

The political value of keeping taxes low seems to have been replaced by the need to make taxes ‘fair’ — which, in the Liberals’ case, means raising them on groups they think won’t get public sympathy.

The Tories have been hammering the government on their proposal to raise taxes on small business owners for over a month — with no real evidence that it’s moved the polling an inch in either direction. The latest Nanos report puts the Liberals at 39 per cent, the Tories at 33, and the NDP at 15. While one Forum research poll puts the Conservatives in the lead, it’s the outlier among a host of surveys which show the Liberals consistently maintaining the pole position.

The Liberals are banking on the fact that most Canadians probably think that doctors, lawyers and business owners make enough money already, and that small business tax increases will not directly affect people who are employees and not entrepreneurs. Such increases would affect the average Canadian indirectly, of course, in the form of higher prices, lost jobs and lower government revenue, particularly if business owners decamp to more tax friendly jurisdictions, as some may already be doing.

In previous years, these taxpayers would have received more sympathy because other voters would think “today them, tomorrow me.” But that was before the Liberals became the party of the middle class, crushing taxpayer solidarity with pledges to create a tax system that is “fairer” for the middle class than for the dastardly few in the ‘one per cent’.

New research shows, however, that nothing could be further from the truth. A new study from the Fraser Institute shows that when you account for both rate cuts and tax credits eliminated under the Liberals’ watch, eight in 10 middle class families actually pay more tax than under the previous government’s rules. As Charles Lammam, one of the study’s authors, told AM640 radio in Toronto, “The federal government [has] repeated since coming into power that they’ve cut income taxes on middle class Canadians … We found that that is not true … We are looking at all the income tax changes made by the government … and when you do so it’s quite clear that middle class families are paying more income taxes as a result of all the tax changes that were made.”

Read the full article on iPolitics.

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