Liberal leader Justin Trudeau announced a major plank of his party’s platform today that would see a “middle class” tax cut (reducing federal income taxes on the $44,701-$89,401 bracket from 22% to 20.5%), the creation of a new bracket for earners of $200K at 33% (i.e. higher taxes on the top 1%), and the simplification and significant expansion of benefits for people with children, which effectively merges existing programs but makes them more generous (as well as significantly means-testing them to ensure greater benefits for lower-income families), as well as overturning the Conservative’s income-splitting plan.
While it would be inaccurate to suggest this is the first major policy announcement from the Liberals, policy nerds like myself have long-awaited a detailed proposal like this one in the area of economic policy. Trudeau himself has been criticized for being vague or light on policy, and today’s announcement goes a long way in distinguishing the Liberals from both the NDP and Conservatives on the economic front. Furthermore, Trudeau promised more will be coming in the areas of child care and early childhood education, as well as in relation to low income families.
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Whether this is good policy or not may be in the eye of the beholder, and may depend on a debate about how redistributive the tax system should be. I think anything that simplifies the tax code and benefit programs is a good thing (and certainly there is a whole lot more that can be done of that front). I’m also a fan of means-testing for programs like this, although I’m undecided on how much I like the total cost of the program ($22 billion) or whether upper-middle-to-upper-class families need to benefit as much as they do under the plan.
The politics of the announcement is also interesting. Many strategists argue in favour of waiting until the election campaign itself to provide detailed information on proposals, due to the fear of criticism (or theft) of the ideas. In this instance I don’t think the Liberals have much to fear on the theft front: the plan seems like it was designed to run up the middle between existing Conservative policy and the NDP’s greater focus on institutionalized child care.
The inner workings of government
Keep track of who’s doing what to get federal policy made. In The Functionary.
The Functionary
Our newsletter about the public service.
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And if the Liberals can’t defend this plan from criticism – a whole lot of Canadians get a tax cut and families with children a big boost in benefits, while the 1% see a modest tax increase – then they’re already in more trouble than they can handle.
Overall, it looked like a pretty good day for the Liberals. Hopefully we see more detailed policy proposals from them, and the other parties, throughout the summer, as the framing of the overall election debate shapes up.
