Taxes have been a key issue in this federal election. Canadians for Tax Fairness has reviewed all of them and offers this analysis:
Conservatives tax cuts make taxes even more unfair.
The Conservatives, have made lowing taxes a key plank in their platform. But their tax cut agenda makes taxes even more unfair.
The Conservatives are promising more tax cuts, if re-elected. The proposed Home Renovation Tax Credit would only help those who can afford to do home renovations and could make the consumer debt and housing bubble problems even worse.
Tax cuts are also very poor economic policy. Corporate tax cuts have not worked create jobs. They have mostly ended up as "dead money" in corporate coffers.
Tax cuts, and the deficits they have created, have been used as justification for severe cuts to public services. The retirement age has been raised to 67, federal health transfers to the provinces are set to be reduced and service cuts have hit everything from veteran's offices to rail and food safety inspections.
The problem with all the Conservative tax cuts is not just that it makes the tax system more complex and unfair, it has also severely reduced government revenue to the lowest level as a share of the economy since the 1660s. This reduced revenue constrains what governments can do about major challenges we face, such as climate change, poverty, and crumbling infrastructure.
Liberals would raise taxes of the top five per cent but cut them for the next richest 15 per cent.
Yes that is right. What Trudeau says in the escalator ad about giving more to the middle class is actually quite misleading. The richest (the top five per cent) will pay more tax (about two or three thousand more.) But most of the tax cuts go to the top 15 per cent just below the top five per cent. They would get a tax cut amounting only to a few hundred dollars. All other Canadian tax payers will get next to nothing (less than $50) and the lowest 40 per cent will get nothing at all.
Lower income families would benefit, however, from their plan to roll all the different child benefits into one Canada Child Benefit plan which would provide more to those who need help the most and less to those who need less. Under this plan families with incomes under $30,000 would see an increase of about $600 per child.
The Liberals also say they will conduct a review of all tax expenditures to target tax loopholes that particularly benefit Canada's top one per cent. The Liberals will invest an additional $80 million, over four years, to help the Canada Revenue Agency crack down on tax evaders.
The biggest problem with the Liberal tax plan is that they are not addressing the need to raise more revenue. They won't be able to do much if they don't have the money to do things with.
The Liberals are taking the easy way out and just plan to run a $10 billion deficit for the next few years to fund their new spending commitments. While a small deficit is not going to cause a serious problem in the short-term, in the long-term it is not sustainable.
NDP would raise revenue by hiking corporate taxes.
The NDP would raise corporate taxes from the current 15 per cent federal rate to 17 per cent, which is expected to raise an additional $3.7 billion a year. This is a very modest increase and would keep the combined federal and provincial corporate tax rate to about 28 per cent which is less than the OECD average and well below the 39 per cent rate in the U.S.
Tax integrity measures, including creating a tax force to crack down on tax cheats using tax havens is expected to raise an additional $500 million a year.
Closing tax loopholes such as the Stock Option Deduction, ending income splitting for families and rolling back the TFSA maximum annual contribution limit to $5,500 would raise an additional $3 billion.
The NDP would also save $240 million by ending fossil fuel subsidies.
These and a few other revenue measures would result in additional funds of about $7.5 billion that would be available for spending on their program priorities.
In addition to this the NDP would not reduce EI contributions but use the surplus in the EI fund to improve access, expand parental leave and increase training opportunities for a total investment of about $5 billion a year.
The NDP would raise in total about $12.5 billion in additional revenue to pay for the social and economic investments they propose to make, which is a bit more than the Liberals, and more sustainable as they would not have to make the cuts the Liberals will have to when they end their deficit financing.
This revenue is still half the amount that the Alternative Federal Budget said was needed to fix all the things that need fixing in Canada. Both the Liberals and the NDP are being overly cautious and not ambitious enough about what governments could do to improve our lives.
The Green Party proposes Carbon Fee and Dividend Plan.
The Green Party's tax policies focus on the environment. They would end fossil fuel subsidies and introduce a Carbon Fee and Dividend Plan. It would put a price on carbon but then return the revenue raised in the form of a dividend.
While this revenue neutral approach may be a way to buy public support, it is not the best way to achieve greenhouse gas reductions. It would be much more effective if some of the revenue raised was invested in things like public transit and clean energy development so that consumers have some viable alternatives that they could choose from.
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