Justin Trudeau has unveiled the Liberal alternative to the Harper government’s economic plan: hike taxes for the wealthiest one per cent to pay for more generous child benefits and an across-the-board income tax cut for the middle class.
Under the Liberal proposal announced Monday:
According to the Liberals, all families with kids under 18 and an annual income below $ 150,000, or 90 per cent of families,would receive more under Trudeau’s plan than they do under Prime Minister Stephen Harper’s.
Monday’s announcement puts in place a central pillar of the Liberals’ eventual platform for the fall election. And it is a reply to last month’s Conservative pre-election budget, which pivots around twin measures to allow parents with children under 18 to split their income for tax purposes and to expand and enrich the universal child care benefit.
“Canada has always done well when most Canadians are doing well — when we have a strong and successful middle class,” Trudeau told the crowd. “The fact is, over the past 10 years, Mr. Harper’s plan has failed. We are not getting the economic growth, and we’re not getting fairness and success for the middle class.”
Trudeau has previously promised to scrap the $ 2 billion parental income-splitting scheme, which numerous economists and think tanks have said will benefit less than 15 per cent of Canadian families, primarily the wealthiest.
The Conservative government has just boosted that benefit to $ 160 from $ 100 a month for each child under the age of six. And it has expanded the program to give families $ 60 a month for every child between six and 17.
Trudeau proposes to roll together and enrich two other existing benefits that are geared to income — the Canada child tax benefit and the national child benefit supplement — into a single, enriched benefit that would give families up to $ 6,400 annually for every child under six and up to $ 5,400 for children aged six to 17.
The benefit would be “simple, meaningful, monthly and tax-free. But most of all, it will be fair,” Trudeau said.
Trudeau has promised that the eventual Liberal platform will be fully costed and designed within the framework of a balanced federal budget.
His proposed changes to tax brackets would be revenue neutral — a tax cut of $ 3 billion a year for the middle class counterbalanced by an additional $ 3 billion in taxes on the wealthy, the Liberals said.
However, Trudeau’s proposed new child benefit would cost the federal treasury an additional $ 4 billion a year. That would be paid for, in part, by scrapping the Harper government’s $ 2-billion parental income-splitting scheme.
Trudeau has also promised to reverse the recently announced plan to almost double the amount people can sock away annually in tax-free savings accounts — another measure Trudeau maintains will primarily benefit the wealthy.