Thursday, March 31, 2011

Day 5 Policies

Conservative: Extend Accelerated write-offs for business
Liberal: Changes to the CPP
NDP: Revamped Corporate Tax Measures & Job Creation Tax Credit

Today we're going to start off with the Liberal's proposals.

The Liberal Party announced a plan to negotiate changes to the CPP which includes gradually increase benefits over time and to allow for voluntary contributions to the CPP.  It should be no surprise that I don't like the CPP and I don't think it's a very good investment.  Having said that, it's not up to me to tell others how they spend their retirement, as long as those increased benefits don't put an increased burden on my contributions, and as long as my benefits in the future don't put that same burden on my kids and grandkids.  I will point out to the Liberal party that we actually have this plan in a limit form - in Saskatchewan it's called the Saskatchewan Pension Plan, but I would also point out that RRSPs do exactly the same thing.  So why don't they just increase the amount you can contribute to your RRSP or make changes to make it more attractive to invest in an RRSP?
Cost: Unspecified

The NDP threw out a heavy policy and to be honest, I think that they got their policy book mixed up with the Liberals again.  The NDP proposal is to increase large corporate tax rates to the level they were at in 2007 (a tax hike of 3% to 31%) and then drop the small business corporate tax rate by 2% (to 9%).  The NDP also put in a job creation tax credit of $4500 (no word on details) and the same accelerated CCA rates that the Conservatives are offering, but for longer.  In this package, the only thing that I don't like is the corporate tax hike for large corporations.  Otherwise, I'm actually impressed that the NDP are the ones that are putting forth this proposal.  Not too long ago, when the Liberals were actually fighting with the Conservatives for the center of the spectrum, this would have been (with small changes) a policy put forth by the Liberals.  Score one for Mr. Layton today.
Cost: Unspecified

The Conservative announcement for the day was to extend accelerated write offs for equipment purchases for two years.  They also announced a continuation of a pilot project to support collaboration between colleges and businesses.  On the whole, this is a pretty low key day for the Conservatives - both announcements are currently in effect and today just pledges to continue what is already working.
Cost: $600 Million for the extension plus $80 million in new funding for the pilot project

On the whole, I think that the NDP wins the day with an interesting proposal to revamp corporate taxes.  I don't agree with widening the gap between large corporate tax rates and small business corporate rates, but on the whole, the rest of the proposal is a winner.  The only problem is that we don't know what it costs.  On a trend, the Conservatives continued their string of using tax cuts to stimulate business investment.

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