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June 7, 2004

Tax Cuts and Deficits

Stephen Harper is so proud of his platform that he released it on a Saturday when most newspapers don't publish on Sunday. Coming on the eve of the 60th anniversary of D-Day, and the 6th game of the Stanley Cup, it is as if Harper tried to divert attention from his platform, as well he should.

The Conservative platform closely resembles what Gordon Campbell tried in BC. It slashes services while pretending that government revenue will grow even though tax rates are cut. They just don't get it; tax cuts do not pay for themselves. Personal income tax takes in almost half of all revenue at the federal level. Harper puts most of his tax cuts in the last year before the next election, fiscal 2008-09. By that time his tax cuts would reduce income tax revenue by about 16%, and therefore they would reduce total revenue by 8% but he shows total revenue going up by 5%. That is voodoo economics that is guaranteed to produce either massive deficits or very deep cuts to services.

Media attention has focused on the $13.1 billion in service cuts Harper says he would make in his first two years. That's only the beginning. Things get really ugly with his bad math in the last two years of his hoped for term.


 

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