Tax cuts | Yes, you want more

Stupid question, if I may.

Posted at 5:00am

Do you want to pay more tax? Be honest…

Nearly 60% of Quebecers say they are paying too much. Another 40% think taxation is adequate, according to the University of Sherbrooke’s Chair of Taxation and Public Finance (CFFP) reports1 and 2† Anyone willing to pay more fits within the margin of error.

So it’s no surprise that the Liberal Party got the ball rolling on Saturday with its first-ever pre-campaign tax cut promise.3

It’s even more popular than you think.

In 2019, the CFFP noticed our strange relationship with taxes. It differs little by income or tax rate.

Of those who earn less than $20,000 a year, nearly half believe they are paying too much in taxes. Yet they hardly pay.

Among those earning between $20,000 and $40,000, the dissatisfaction is 55%. For those who make more than $100,000, it’s 59%. Almost the same.

Surprisingly, Quebecers have almost the same perception of the tax burden as the rest of Canadians. Including Albertans. The difference with them is only 4 percentage points.

In a subsequent study, the CFFP checked whether taxpayers’ opinions changed when they were told what their taxes were used for and how much they paid compared to others. Only one in five changed their mind. Some became more critical, others less so.

We have to look elsewhere to find the factor that influences taxpayers’ perception. It’s age.

Young people and seniors more often find tax acceptable. Because they are the ones who make the most use of public services, such as education and health care. So they can see where their money is going.

Those aged 25-64 are more critical. It is also a more volatile electorate than the elderly, and more mobilized than the young.

This is a first reason that Mr.me Anglade: It’s profitable.

However, there is a paradox.

In 2018, Repère Communication asked voters whether they preferred a tax cut or an improvement in public services. Barely a quarter of the respondents opted for tax relief.

Why then do parties promise both at the same time, at the risk of contradicting each other?

Because just talking about public services doesn’t win.

On the one hand, the major parties come up with solutions that are too similar. On the other hand, they are not believed. It is a problem of both visibility and credibility.

The liberal platform is proof of that.

The proposals of Mr.me Anglade does not differ much from that of the caquists in terms of service. Admittedly, she criticizes the third link and the cost of retirement homes and is wary of the funds allocated to 4-year kindergartens. But otherwise his ideas are as relevant as they are consensual.

Here’s an overview.

In health care: strengthening home and primary care, promoting interdisciplinarity, adding hospital beds, abolishing compulsory overtime, depoliticizing the ministry and recruiting foreign workers with recognition of their diplomas.

In education: Accelerate school renovation, improve air quality and complete the network of nurseries within five years.

These commitments are hard to sell. Citizens have heard them too often and now struggle to believe them.

So that’s the second reason for Mrs.me Anglade: She had to attract attention with something else.

Contrary to popular belief, parties keep most of their promises. The Laval University Polimeter has shown this for MM. Couillard and Legault. However, those about access to a general practitioner and about the quality of schools and education are the exception. The staff shortage in education and care will be difficult to solve, regardless of party.

It is exactly the other way around with taxes. A tax reduction can be achieved with a stroke of the pen. In addition, it is in terms of cost of living that the coalition avenir Québec has achieved the highest percentage of its commitments.

mme Anglade wants to catch up with her on her field. It multiplies the measures targeting the portfolio, such as the end of the QST on electricity and essential products, the exemption from transfer rights (“welcome tax”) for the purchase of a first home and free public transport for students and seniors.

Is this justified, with the risk of a recession and the demographic shock? The Court of Auditors’ report on the state of public finances, expected in August, will provide an answer. But all a clue is in the liberal platform.

The very first page of the pledges reads: “We have to face the facts: the economy is fragile. We must collectively take off our rose-colored glasses”…

3. The PLQ wants to cut taxes by 1.5 percentage points for the first two tax brackets (less than $46,295 and $46,295 to $92,580). Above $300,000, the tax rate would increase by 2 percentage points.

Leave a Comment