(crossposted to CanadaEast)
I wonder how many hits this page will be getting over the next 24 hours?
Finance Minister Jim Flaherty announced some substantial tax cuts today. Unlike what is usually the case with tax cuts, these will actually add up to something meaningful. A guy or gal earning $40,000 will get $225 extra back next year when they file their 2007 taxes. That isn't chump change.
At the same time, the GST will drop to 5% (and presumably the HST will fall to 13%, thought the provincial Liberals may hold it higher as was recently recommended by an economist).
Corporate taxes will also go down and, most importantly to me, a subtantial payment will be made on the federal debt. Overall, I am pleased with this. If I were prime minister, I think I would have not done the GST thing and instead paid down more debt - that was the purpose of the GST afterall - and maybe saved a bit more for contingencies. However, I am not writing this to get into the merits of the announcement; I want to write about the politics of it.
So, what does this mean? I think it reinforces my prediction that there will be an election in December.
How so? The Tories have now blown their goodies that would ordinarily be spent in a pre-election budget. They clearly are aiming for an early vote. The Liberals are unlikely, however, to cooperate by voting non-confidence. Therefore, I suspect any Liberal attempt to tinker with these changes or slow them down in committee will be met with an election call by Harper on the grounds that the Liberals are obstructing the agenda and preventing the implementation of the GST cut by the promised date of January 1.
I hope all you candidates out there saved your toques from the 2006 campaign!