Article:
http://www.reportonbusiness.com/servlet/story/RTGAM.2008
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Canada being the one of the highest personal tax income tax burden, the Federal Government of Canada is looking at reducing personal taxes. This reduction will help Canadians save about 25 billion dollars by 2012. The proposal is to replace the 15%, 22%, 26%, and 29% tax rate into a 15% and 29% rate by 2012. In addition, they are increase the limit of not paying tax from $9,600 to $15,000. The proposal also suggests that every category of taxpayer will pay less income tax, including one-earner and two-earner households, married people with or without children, singles, and seniors. This tax relief system is proportional. The more a family earns the more tax savings will be. This is especially beneficial to middle class and high earners that pay the majority of tax in Canada. The main economic purpose of this proposal is to encourage entrepreneurialism, risk taking and hard work.
Relationship to Chapter 3 – Distribution of Income, Economic Stabilization
There is no doubt the government has a large involvement in the amount of tax each citizen. In today’s society there is a huge competition of income. The rich will get richer and the poor will get poorer. With this kind of society the government will try to reduce the gap between the two extremes so they can compete with each other. In order to do this the government will propose tax relief. Tax relief would help a lot of low income families because families who make around 15, 000 (considerably low) would not have to pay tax. The government introduces things like welfare programs, reducing tax rate, increase the limit of not paying tax, and etc to help to reduce the income gap. In addition to distribution of income reducing tax is a way of stabilizing the economy. If the government feels the economy is experiencing slow growth or high unemployment they will usually increase their own spending on goods and services, and decrease the amount of tax collected. A decrease in taxes would mean citizens would have more money to spend.
All in all, I think reducing the tax would be a good idea for the government to help out the low income families. Canadian economy does not need any more low or high income families, we need more middle class in order to balance the difference. Reducing tax would also promote growth in the economy since people will have more money to spend. I am all for lowering tax rate since it would benefit many low income families.
