Ontario's Finance Minister Challenges Federal Government On Tax For Low-Income Earners

by Robert Lee, Tax-News.com, London

31 July 2001

On the anniversary of the introduction of personal income tax, Ontario's Finance Minister Jim Flaherty has challenged the federal Liberal government to do the 'responsible thing' and follow his province's lead to eliminate income taxes for lower-income earners.

Eighty-four years ago, on July 25, 1917, the federal government implemented the Dominion Income War Tax Act as a temporary measure. The tax became a tremendous burden on average hardworking people and in 1995, the Harris government cut Ontario's personal income taxes by more than 30 per cent.

Flaherty declared: 'Ontario has told 660,000 lower-income earners that we don't want their tax dollars, the 2001 Budget increased the number of people removed from Ontario's tax rolls to 735,000. It's unfortunate that these same people are continuing to pay income tax to the federal Liberal government.'

He added: 'The federal Liberals should follow the Ontario example, and eliminate taxes for low-income earners as quickly as possible. By eliminating their federal income taxes, lower- income earners will be able to spend their money the way they deem fit.'

The Ontario government says that it collects less than one-third of the income taxes paid by the people of Ontario. And as the lion's share of personal income taxes is levied by Ottawa, it urged the federal Liberal government to take significant action in order to fully reduce the income tax burden on Ontario low-income families.

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