As the next budget is being prepared, citizens are welcome to participate in the online consultation process. Up until midnight (EST) on Feb.28, we have the opportunity to indicate our priorities and give a short comment (up to 50 words) on taxes, debt and program spending.
Here are my comments:
Priority 1: Personal tax.
It's time to start phasing in the income splitting. Even if the amount one could attribute to a spouse is limited at first, families will be given a tax break which the opposition parties won't dare to repeal. The limit could then be increased until income splitting is fully implemented.
Priority 2: Debt.
Let's start borrowing from ourselves to consolidate the debt. EI and CPP surpluses could be invested in government bonds, securing higher returns for EI and CPP with lower borrowing costs for the government. Let's start using the Bank of Canada to consolidate public debt and reduce the interest payments.
Priority 3: Corporate tax.
Many provinces have lower tax rate for manufacturing and processing sector. Implementing M&P rate federally will reduce production costs, allowing Canadian industries to remain competitive despite the high dollar.
Priority 4: Spending.
Program spending must be brought under control. Zero-base policy should be implemented, making it mandatory for all government departments to justify all the funds they receive. For the next few years, any new funds for essential services should come from eliminating wasteful spending in other departments.
Note: Program expenses have swollen from $102B in 1996/97 to $187B in 2006/07. That's over 80% increase in 10 years.
Other: The CHP proposal to revive Canada's decaying infrastructure through Bank of Canada loans to provinces and municipalities at little or no interest is worth considering.
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