The proposal would add two per cent to tax on all income over $500,000.
New Democrats made the proposal in an effort to gain Liberal concessions on that party’s restraint budget in return for NDP support. The Liberals are one seat shy of a majority government and could fall if the budget is defeated.
The NDP claim their tax on the wealthy would raise $570 million annually. They want the government to spend the money on removing HST from home heating bills (at a cost of $350 million), an additional 4,000 child care spaces ($50 million) and boosted support for the disabled ($40 million).
Andrea Horwath said the idea was “reasonable” and “well thought out.”
“We’re not drawing lines in the sand at this time,” Horwath told reporters. “But we’re urging the government to listen carefully to our proposal.”
But Liberal house leader John Milloy dismissed the idea late Tuesday, accusing the NDP of triggering a “spending spree.”
“This isn’t a game,” Milloy said in a statement. “The state of our province’s finances is much too important to be used as a PR stunt.”
Ontario, mired in a $15.3 billion deficit, is facing a growing financial crisis. The province is paying $10 billion each year to service its debt, is now technically considered a “have-not” within Confederation and has had its outlook downgraded to “negative” by ratings agency Moody’s.
The tax on the rich is not a new idea.
Warren Buffett, one of the wealthiest men in the world, proposed a similar idea in the U.S. in 2011.
Buffett said that mega-rich are too often indulged with “extraordinary” tax breaks in that country, and should be paying more to help the U.S. climb out of debt.
In Ontario, the highest provincial income tax bracket is $78,000 and above, which is taxed at 11.16 per cent. The New Democrat proposal would tax all income higher than half a million dollars at 13.16 per cent.
(In addition to the basic tax, there are also significant provincial surtaxes that push Ontario’s effective provincial tax rate on higher incomes to roughly 17.4 per cent.)
The federal tax rate adds an additional 29 per cent on income higher than $132,400.
It is unclear where the minority Liberals will find support for their budget.
Progressive Conservative party leader Tim Hudak said he would vote against the budget on the day it was tabled, March 27th.
Premier Dalton McGuinty said Tuesday he would entertain “any reasonable proposals.”
“But I’ve made it very clear to Ms. Horwath and her colleagues we’re not prepared to entertain any proposals about new spending,” he said. “We just can’t afford to do that.”
Despite talk of a possible second election, most veteran Queen’s Park observers believe that is unlikely. October’s vote sent all three parties into considerable debt from which they have yet to emerge. The PC party says it is $6.2 million in the hole. New Democrats are $3 million in debt.
The ruling Liberals won’t divulge the state of their books. Ontario Liberal Party president Yasir Naqvi ignored multiple queries on the subject.
Original Article
Source: ottawa citizen
Author: Lee Greenberg
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