Doing the math

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User fees outweighed Tory tax cuts: study

The benefits to Ontario families of the tax cuts imposed by the Conservative government between 1995 and 2003 were outweighed by higher user fees during the same period, a new study suggests.

The study, to be released Monday by the Ontario Confederation of University Faculty Associations, is a clear warning to the current Liberal government as it struggles to balance the books without raising taxes.
...
The study found a typical single-parent family with two children and annual income of $38,000 in 2003 was paying $1,490.43 less in income taxes than in 1995, when the Conservatives were first elected.

But the average Ontario household was paying $1,831.14 more in user fees and property taxes in 2003, the study found.

A family of four with one full-time university student and an annual income of $54,000 - roughly the Ontario average - was paying $4,059.46 in additional user fees in 2003, including $2,465 more for tuition, than in 1995. But that same family was only saving $1,439.80 in lower taxes, the study found.

Compensating for lower taxes through higher user fees is detrimental because it doesn't distinguish between families with different income levels, the study warns.


Of course we don't know exactly what this tells us without examining what's included in "user fees" and whether those services really should be the responsibility of government. But can we at least agree that saying "just lower taxes and everyone will benefit" is an oversimplification? The hack and slash approach seems to benefit some more than others.

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TrackBack URL: http://www.pogge.ca/cgi-bin/mt4/mt-tb.cgi/374

Via Pogge I see that the Canadian experience is confirming American. The late Conservative government of Ontario dropped income taxes during it?s reign. It turns out, however, that for most households that didn?t reduce the tax burden ? when user... Read More

Budget Math from Tilting at Windmills on April 21, 2004 1:29 AM

Via Pogge I see that the Canadian experience is confirming American. The late Conservative government of Ontario dropped income taxes during it?s reign. It turns out, however, that for most households that didn?t reduce the tax burden ? when user... Read More

2 Comments

You know, the thing about budget math is it's just arithmetic. And, for that matter it's second grade arithmetic. All you need to be able to do is add and subtract.

If you reduce taxes you have to reduce spending. If you don't you've got to get the money somewhere else. And if you aren't getting it from a progressive income tax you're almost certainly getting it from a regressive tax/fee/whatever.

This is not rocket science. It is dead simple.

(I'm not ranting at you pogge, the subject just brings out the rant in me.)

Feel free, Ian. I know the feeling. One of the reasons I started to blog was so I'd have a place to rant.

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This page contains a single entry by pogge published on April 19, 2004 8:12 PM.

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