Wednesday, April 08, 2009

NDP Broken Tax Cut Promises: Peek-a-boo We See You!

Cancelling tax relief is never a good news item, but there is a right way and a wrong way to do it.

In 2002, when the Government of Ontario delayed previously announced business tax cuts, it made the decision public by noting the change in a news release on budget day. In a June 17, 2002, budget news release, the Ontario government noted:

"While the government remains committed to cutting education property tax rates, personal income tax and the general and manufacturing rates of corporate income tax, the Budget proposes to implement these reductions one year later than currently scheduled."

Although it was disappointing news, at least the government was upfront with taxpayers about the change.

Consider the Doer government's approach here in Manitoba. In the 2007 provincial election, the NDP committed to increase the education property tax credit to $625 in 2008 and $700 in 2009. See here for a CBC story on the announcement.

However, when the 2008 budget was released, the tax credit had only increased to $600, short changing Manitoba taxpayers by $25 a household (and $25 per renter). As you'll see in this Winnipeg Free Press story, Finance Minister Greg Selinger committed to make good on the promise by increasing the tax credit to $700 by 2009.

Fast forward to budget 2009 and again the promise has been broken. As you'll see in this finance department news release, the government only increased the credit to $650 and made no mention that it broke its promise by $50.

As noted in this Let's Talk Taxes article, the 2009 budget also cancelled previously announced personal income tax relief for 2010 and 2011 without so much as a mention in any of the government's six news releases on budget day.

It's great that the NDP government proceeded with some of their previously announced tax cuts in 2009 despite the economic slowdown. As an organization, the CTF has given them a pat on the back for that decision many times. One only needs to look here and here to see that.

However, when it comes to communicating import tax changes to the public, the government leaves a lot of room for improvement.

Perhaps it's time to bring out the Fibber costume.

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