29 AUGUST 2010

Green Party leader Jack MacDougall called Conservative leader David Alward’s announcement yesterday that he would roll back tax cuts given to New Brunswick’s richest tax payers by the Liberals last year “a compliment.”  “Mr. Alward was obviously coming up short on his fiscal policy so he borrowed from the Greens.  It shows the major parties are listening.  We welcome that.”

The Green Party has denounced the entire tax reform legislation passed by the Legislature which gives upper income earners and corporations major tax reductions, calling it fiscally irresponsible.  Both the Conservatives and the NDP supported the tax cuts that were signed into law in 2009 to be phased in over the 2010-2012 budgets.  By the time it is fully implemented, it will result in $400 million less revenue each year.

“Our position has been public for several months.  I have spoken against the cuts in several CBC political panel broadcasts where all parties were present.  It was the headline in the Telegraph Journal coming out of my 2-hour session with the editorial board of the paper.  The other parties were silent on the issue.  Now as the Conservatives are being challenged to solve the structural deficit problem that the Liberals have created, they are looking to the Green Party for answers.”

“The problem with the Conservative position is that it is a very timid version of the Green position.  By targeting the very rich – those making over $450,000 – the Conservatives are looking for positive reaction from voters, but it falls far short of what is needed to eliminate New Brunswick’s structural deficit.  The Green Party would reverse the entire income tax restructuring legislation and restore $400 million in revenues by 2012.”

The Greens would also reverse the corporate tax cut.  The rate went from 24% to 11% in 2010, will drop to 8% by 2012, and eventually to 5%.   “To dramatically cut revenues while costs are rising is simply irresponsible.  It puts a disproportionate burden for paying for public services on those in the lowest tax brackets, increases the gap between rich and poor, and creates a structural deficit.  The Conservative’s plan is designed to curry favour during an election.  It will not solve the problem,” MacDougall concluded.

 
Background

In 2009, the Liberals passed legislation to collapse the previous four income tax brackets to two, moving the income tax system towards a flat tax – a single tax rate paid by everyone.  A flat or near-flat system is referred to by economists as “regressive” because those with higher incomes pay the same or nearly the same proportion of their total income as lower income earners, despite having much greater levels of disposable or discretionary income.

The four-tier system, with each tier representing a higher tax rate, is referred to as “progressive taxation.”  The principle behind progressive taxation is that those with higher incomes should contribute a greater percentage of their income to support public services because they have more disposable income.  Progressive taxation is the primary means of wealth distribution within democratic societies, where those with the means to do so contribute the most to the public good.  It also keeps the gap between rich and poor relatively stable.  When that gap grows, the society becomes stratified and social relations become strained.

The flat tax system is favoured by those economists who hold to the theory that low taxes on the wealthy and corporations is the way to stimulate investment and economic growth.  The ideology of “trickle down economics” has been proven to starve public services of tax revenue, thereby degrading public education, health and social services, and the living conditions of low income families.  It has also created gross disparities between rich and poor, resulting in extremely high consumption lifestyles which have the highest ecological footprint.

In 2009 a number of New Brunswick economists released a public statement denouncing the Liberal tax reforms as regressive and the wrong direction to take in fiscal policy.

 Party leader Jack MacDougall called Conservative leader David Alward’s announcement yesterday that he would roll back tax cuts given to New Brunswick’s richest tax payers by the Liberals last year “a compliment.”  “Mr. Alward was obviously coming up short on his fiscal policy so he borrowed from the Greens.  It shows the major parties are listening.  We welcome that.”

The Green Party has denounced the entire tax reform legislation passed by the Legislature which gives upper income earners and corporations major tax reductions, calling it fiscally irresponsible.  Both the Conservatives and the NDP supported the tax cuts that were signed into law in 2009 to be phased in over the 2010-2012 budgets.  By the time it is fully implemented, it will result in $400 million less revenue each year.

“Our position has been public for several months.  I have spoken against the cuts in several CBC political panel broadcasts where all parties were present.  It was the headline in the Telegraph Journal coming out of my 2-hour session with the editorial board of the paper.  The other parties were silent on the issue.  Now as the Conservatives are being challenged to solve the structural deficit problem that the Liberals have created, they are looking to the Green Party for answers.”

“The problem with the Conservative position is that it is a very timid version of the Green position.  By targeting the very rich – those making over $450,000 – the Conservatives are looking for positive reaction from voters, but it falls far short of what is needed to eliminate New Brunswick’s structural deficit.  The Green Party would reverse the entire income tax restructuring legislation and restore $400 million in revenues by 2012.”

The Greens would also reverse the corporate tax cut.  The rate went from 24% to 11% in 2010, will drop to 8% by 2012, and eventually to 5%.   “To dramatically cut revenues while costs are rising is simply irresponsible.  It puts a disproportionate burden for paying for public services on those in the lowest tax brackets, increases the gap between rich and poor, and creates a structural deficit.  The Conservative’s plan is designed to curry favour during an election.  It will not solve the problem,” MacDougall concluded.

 
Background

In 2009, the Liberals passed legislation to collapse the previous four income tax brackets to two, moving the income tax system towards a flat tax – a single tax rate paid by everyone.  A flat or near-flat system is referred to by economists as “regressive” because those with higher incomes pay the same or nearly the same proportion of their total income as lower income earners, despite having much greater levels of disposable or discretionary income.

The four-tier system, with each tier representing a higher tax rate, is referred to as “progressive taxation.”  The principle behind progressive taxation is that those with higher incomes should contribute a greater percentage of their income to support public services because they have more disposable income.  Progressive taxation is the primary means of wealth distribution within democratic societies, where those with the means to do so contribute the most to the public good.  It also keeps the gap between rich and poor relatively stable.  When that gap grows, the society becomes stratified and social relations become strained.

The flat tax system is favoured by those economists who hold to the theory that low taxes on the wealthy and corporations is the way to stimulate investment and economic growth.  The ideology of “trickle down economics” has been proven to starve public services of tax revenue, thereby degrading public education, health and social services, and the living conditions of low income families.  It has also created gross disparities between rich and poor, resulting in extremely high consumption lifestyles which have the highest ecological footprint.

In 2009 a number of New Brunswick economists released a public statement denouncing the Liberal tax reforms as regressive and the wrong direction to take in fiscal policy.