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Federal Budget - The high costs of low taxes

In this pre-election budget, the Conservative government is taking public money and giving it to people who need it the least.

Ottawa (21 April 2015) — You might think tax breaks sound great, but they never come without a price—every dollar of tax break is a dollar that we don’t have for schools, hospitals, and roads. Somebody has to pay for all those tax breaks in the federal budget and, unless you’re rich, it’s probably going to be you.

Federal budget unleashes more tax cuts for wealthy

A quick rundown of who benefits from which cut:

  • The “income-splitting” tax break will benefit only the richest 13 per cent of Canadian families and will cost the rest of us at least $2 billion a year.
  • The “Increased Tax-Free Savings Account” tax break will benefit only those people who are already able to save more than $5,000 a year. This tax break costs the government about a half-billion dollars a year now; within 40 years, that cost could be up to $15 billion a year.
  • The cut to the small business tax rate will primarily help people who make more than $150,000 a year, and will cost the rest of us up to $1 billion a year.

So in essence, the Conservative government is taking public money and giving it to people who need it the least. Why? Because the people who need that money the least also happen to be the people most likely to vote Conservative in the upcoming election.

Everybody eventually pays

But even those people will end up paying the price in the long run.

It’s easy to see how tax breaks like these will make the gap between rich and poor in this country even wider, something that a growing chorus of people and organizations—  including the UN, the Organisation of Economic Co-operation and Development, the Vatican, and the International Monetary Fund — says slows economies down and ultimately hurts everybody, rich and poor.

So ask yourself: do those tax breaks still sound great?

NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE