Dear editor:
Some of Bob Nault’s comments in his attempt to discredit the flat tax proposal of the Canadian Alliance, in his column on Aug. 2, are quite misleading.
This proposal has a 17 percent tax rate, an increase in the basic personal and spousal exemptions to $10,000, and a $3,000 per child exemption.
It would not raise taxes for individuals earning up to $40,000 or for families of four earning up to $75,000, as Bob claims, but would reduce taxes for all players of federal income tax, with the largest percentage reduction going to taxpayers with the lowest incomes.
Roughly 1.9 million of the lowest income taxpayers would receive a 100 percent reduction.
This tax change is proposed to be phased in over five years, with the $34 billion cost Bob mentions not occurring until the fifth year, when it would still be less than the projected surplus–even without allowing for a tax cut stimulus (taxes generated by people spending their tax savings).
This tax cut stimulus effect is hard to predict. Usually a cut in the tax rate does not result in a proportional decrease in tax revenues. Sometimes, though, a reduction in the tax rate can actually result in an increase in tax revenues, as has happened in the U.S. and also here in Ontario.
I would like to invite everyone to the Canadian Alliance booth in the Farm Progress Building at the Emo Fair, where they can find more information on the Alliance tax proposal and other policies.
Back in 1993, the other parties scoffed when the Reform Party said they could balance the budget. The Liberal promise at that time was to eliminate the GST.
Maybe this time voters should take the Alliance more seriously.
Sincerely,
Brian Williams
Emo, Ont.
Fort Frances Times
Local News from Across the Rainy River District
