Saturday, June 05, 2010

Potential Liberal Policy: No Income Taxes For Those In Poverty

In light of the upcoming Liberal Policy Convention in Vancouver I will be posting potential policy proposals for criticism. All comments are welcome and encouraged.

POLICY RESOLUTION – Eliminate Income Taxes For Those In Poverty

WHEREAS the Liberal Party believes in reducing poverty;

WHEREAS the Canadian government has no agreed upon definition or standard of poverty and thus not only lacks the ability to concretely recognize those Canadians in dire need but also lacks the ability to identify if any improvement in reducing poverty has been made;

WHEREAS Statistics Canada has been generating figures known as Low Income Cut-offs that have been used by international agencies to describe poverty rates in Canada;

WHEREAS many social organizations and associations recognize that employment promotes independence, motivates self-sufficiency and encourages social contributions, and as such these groups suggest the strongest tool in reducing poverty is employment;

WHEREAS in taxing all earnings above the basic personal amount of 10,382 dollars and below the lowest Low Income Cut-off which in 2008 was 15,262 dollars for an individual the Canadian government is not helping those who are, in all likelihood, in poverty but instead harming them by taking away necessary income while also adding a disincentive for them to work;

BE IT RESOLVED that the Liberal Party encourage the Government of Canada to create a definition of poverty and that the earnings of those in poverty are not taxed through income taxes;

BE IT FURTHER RESOLVED that until a definition of poverty is decided upon, Statistics Canada’s measurement of Low Income Cut-offs serve as a working definition of poverty and individuals earnings will not be taxed if they fall within this classification.


I am aware this policy resolution may sound a bit cold in its emphasis or its stress on the need for those in poverty to find gainful employment, every socially-minded source I've come across cites the same primary solution but probably does a better job of sounding more connected to those in need. If you have suggestions on how to improve this resolution by making it sound more humane, write a comment or if you think it sounds fine, write a comment, or if you have a criticism, write a comment, thanks.


JJLib said...

This is a noble policy, and I don't quibble with your wording. The real problem is the cost.
Raising the basic personal exemption to $15,000 would sacrifice more revenue that did past cuts to the GST rate. You couldn't fund this proposal without raising the GST, which makes it a very hard sell politically given that we know all political parties are afraid to put a GST hike on the table. said...

You're right and I'd hope the cost is the only thing that would hamper this policy.

I can only point out that 10.8% of Canadians are in poverty using Low Income cut-offs and considering their low incomes I would argue it would not cost a lot to make up for the elimination of such income taxes for those in poverty; and hopefully Canadians would support this.

Brian G. Rice said...

I'll have to think about how I'm going to vote on this one, but I will say this. To make this work, we'll have to raise taxes for everyone over the $15,000 exemption limit in order to make up for the lost revenue. Its not that I think it is a bad idea, but I do think will be a very hard sell... said...

Brian yes we would have to raise taxes or we could pursue other options such as reducing spending in other fields such as the military or G20 Summits.

I would counter that only 10.8% of Canadians are in poverty using LICOs and as they already have low incomes, their portion of income taxes would be relatively small.

I realize such a policy would require a "sell" to Canadians, but if the options are to give hand outs or motivate those in poverty to work more, I'd hope it's not that hard of a sell.