Here is the latest on the so-called Liberal tax cut that could be introduced,
...Don't rush out just yet to spend the federal tax cut that Liberal officials hint may be coming soon, warn critics.
Even if Paul Martin's minority government actually commits billions of surplus dollars in the next few months to personal income-tax reductions, less than $20 would likely trickle down to the average Canadian, they say.
And it'll mean foregoing cash for other programs, as every dollar spent to lower taxes means less money available for education, infrastructure or other popular programs.
Finance Minister Ralph Goodale wasn't saying much Friday about reports that his government is seriously considering broad-based tax cuts in either next month's fiscal update or the federal budget, likely in early 2006.
But he certainly didn't denounce the idea.
"I'm always interested in finding the ways to reduce the tax burden on Canadians, provided that the tax reductions are sensible and sustainable and affordable and provided that we can meet all of our other obligations to deliver programs and services," Goodale said outside the Commons.
This is positioning, not policy. The Liberals will introduce a marginal (if you can even call it that) tax cut to be able to say that this is the most that they could give - anything more would be fiscally irresponsible. Thus positioning a Conservative tax cut as out of the mainstream. Pretty much the same thing they did in the last campaign. Whether they can get away with it again is the open question.
...But if the Liberals are truly commited to all their recent talk about boosting productivity and living standards, they'll focus on cutting marginal tax rates for modest income earners, he added.
High marginal rates hurt productivity because they discourage workers from trying to earn more - either through longer hours or better skills - since so much of their income is clawed back by government, argued Drummond.
But don't hold your breath waiting for major tax changes, said MP Monte Solberg, the Conservative finance critic.
"I'll believe it when I see it," said Solberg, who thinks Martin's government is merely floating the idea of tax cuts now to distract public attention from Liberal scandals.
"They just want to change the channel."
