The Tax Cut Debate!!

I was working on a local campaign during the Election and didn't have much time to focus on the tax cut debate.

Anyhow, let me try to re-visit the most controversial tax debate, during the election campaign, here: the Conservative will cut the GST by 2% (1% immediately and another percent in 5 years), but reverse the Liberal tax cut - both lowering the rate on the lowest tax bracket from 16% to 15% and increasing the basic personal exemption by $400, which has been in effect as of Jan. 1, 2006.

The Conservative plan does carry a lot of sound bite in the media, as the Liberal broke their promise in reversing the GST after the 1993 Election.

But in reality, which plan is better?

From a social welfare prospective (without any data analyses), the Liberal plan provides better tax relief for low and middle class earners.

As much as I disagree with the CBC from time to time, they made a decent analysis on this issue. However, how accurate is the analysis when embedded with real data?? I don't know.

But I will soon be able to find out more, as I am currently playing with this Statscan product: Social Policy Simulation Database and Model (SPSD/M for short).

For all you policy wonks, you should check this book out: Taxing Ourselves: A Citizen's Guide to the Great Debate over Tax Reform.