Taxes

Taxes:

The question of corporate income tax divided the parties in the 40th Parliament. At issue were planned cuts to the federal corporate income tax rate, to a low of 15% by 2012. Parties argued over whether a lower corporate tax rate encourages job growth and whether the country can afford to cut taxes on corporations in a post-recession economy.

The corporate tax rate has fallen steadily under both Conservative and Liberal governments since 2000, when it was 29.1% (including a corporate surtax that was eliminated in 2008).

The current rate is 16.5%.

Here’s where the parties stand:

Conservative:

Introduced corporate tax cuts as part of the 2007 budget.

Wants the planned cuts to go ahead, reducing the corporate tax rate to 15% by January 2012.

Liberal:

Wants to cancel the planned tax cuts and restore the 2010 corporate tax rate of 18%.

NDP:

Want to cancel the planned tax cuts and restore the 2008 corporate tax rate of 19.5%.

Pledge to ensure that the Canadian rate remains below the United States’.

Bloc Québecois:

Against raising taxes on business, will allow tax cuts to continue as planned.

Green:

Wants to cancel the planned tax cuts and restore the 2008 corporate tax rate of 19.5%.

Personal income tax

No party wants to be seen as raising taxes on the average Canadian family. But a glance at the tax incentives they offer will give some idea of their priorities.

Conservative:

Will allow families to split income for tax purposes between two adults. This means that in a two-earner household, the earner with a higher income can allow a spouse to claim some of his or her income. This will reduce the overall tax bill for many families.

Tax credits for various activities, including for children’s arts programs, for volunteer firefighters and family caregivers, and credits for educational examiniations.

Liberal:

Favours program spending over tax credits. Offers some tax incentives, including a Family Care tax benefit and a Green Renovation tax credit.

NDP:

Specific proposals still unclear at this point.

Bloc Quebecois:

Wants to impose a 2% surtax on individuals who earn an annual income between $150,000 and $250,000. Those who earn more than $250,000 would be subject to a 3% surtax.

Green:

Wants to eliminate personal income taxes for people living below the poverty line of $20,000.

Will introduce income splitting program for adults so that a couple can share the family tax burden.

Will introduce “polluter pays” carbon taxes, with a rebate program for low-income individuals