You can imagine my surprise last Thursday. "You're on the Conservative website," my friend Ellen cheerfully told me from Ottawa.
"Why? What are they attacking me for?" I asked.
"They're not attacking you. They're citing you," she gleefully announced.
Sure enough, there I was. In a release titled "No credible third party accepts Liberal claim that GST cuts benefit the rich," the Conservative election campaign cited me (and a few other policy luminaries) as somehow validating Stephen Harper's claim that cutting the GST would help low-income Canadians.
I am justifiably skeptical about the Conservatives' newfound concern for low-income Canadians. But I am downright angry over their manipulative use of my name and affiliation to shore up their attempted makeover.
Later in the day, the Tory webmaster (presumably responding to outraged phone calls from several of the cited "credible" sources) added an innocuous footnote: "These authorities have not endorsed the Conservative Party and they have not endorsed our tax plan." No kidding. They could have added another footnote confirming that the Pope is, indeed, Catholic.
Concerns about honesty in advertising aside, let's examine the Tory claim that their platform helps low-income Canadians. Imagine someone making $15,000 a year (the poverty line for singles). This person pays no income tax, and has no savings. They spend two-thirds of their income on groceries and shelter (GST-exempt), and the rest on taxable consumer spending. A two-point GST cut saves $100 per year -- or about $2 per week. Don't spend it all in one place.
Now imagine a high-income Canadian, pulling in $150,000 a year, with 30 per cent going to income tax. This person spends $25,000 on housing and groceries, and devotes 10 per cent of income to savings. A two-point GST cut therefore saves $1,300 per year on the remainder: their taxable consumer spending. The rich dude gets 13 times as much as the poor bloke. You don't have to be Liberal to conclude that GST cuts do, indeed, benefit the rich.
The Tories point out that the low-income earner gets more from a GST cut than an income-tax cut (since they don't pay income taxes in the first place). True. But $2 per week doesn't matter. Neither income-tax cuts nor GST cuts can measurably improve the standard of living for low- or middle-income Canadians.
And don't forget that a GST cut -- like all tax cuts -- carries a price: namely, going without public services that aren't provided as a result. A two-point GST cut would cost $12-billion. Suppose that money was used, instead, to fund programs (child care, health care, universities, etc.) that benefit all Canadians equally. That's $400 worth for each man, woman, and child in the land. Low-income earners thus lose four times as much in services (more if they have kids) as they saved from the tax cut.
If you want to truly assist low-income Canadians, spend money on programs that directly improve their lives. Don't cut taxes. (The NDP's excellent proposal to expand the child-tax benefit is really a social program, not a tax cut: It is targeted at low- and middle-income families, whether or not they pay income tax.) But in reality the Tories aren't trying to assist low-income Canadians. They're focusing on the opposite end of the economic spectrum -- like those who'll cash in from the capital-gains-tax removal quietly announced by the Conservatives on Friday. The richest 3 per cent of tax-filers collect two-thirds of all taxable capital-gains income. The 100,000 richest Canadians declare a whopping $35,000 each per year in taxable capital gains -- and now, thanks to the Tories, that's tax free. Methinks that's worth just a tad more than $2 per week.
I suppose I've just blown my chance of ever again being mentioned favourably in Conservative propaganda. But facts are facts, and no credible economist can deny them. Tory tax cuts would do nothing to measurably improve the standard of living of lower- or middle-income Canadians. Tory attacks on child care, health care, and other programs will hurt us all badly. And their manipulative use of my name (and others, like Tom Kent and the Canadian Council on Social Development) to support their misinformation was deplorable. We all deserve an apology.
Take it from me. Even the Conservatives think I'm credible.
Jim Stanford is an economist with the Canadian Auto Workers union.
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