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Tory income tax cut equals pocket change, but will rob the treasury

One PC promise in particular stuck out to me as a foolish measure: raising the provincial basic personal amount (i.e., that portion of your income on which no tax is paid) by up to $3,000 for people earning less than $75,000 a year.
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Jamie-Baillie3-campaign
Nova Scotia Progressive Conservative Leader Jamie Baillie talks with reporters after releasing his party platform during a campaign stop in Halifax on May 11. (THE CANADIAN PRESS / Andrew Vaughan)

By LUKE HANCOX

I recently read the Nova Scotia Progressive Conservative Party’s platform, and one promise in particular stuck out to me as a foolish measure.

The measure in question is the promise to raise the provincial basic personal amount (i.e., that portion of your income on which no tax is paid) by up to $3,000 for people earning less than $75,000 a year.

Coupled with promises to hire more doctors and to harden class-size caps, this strikes me as one of those dubious election-time strategies to cut taxes, expand services, and pay for the difference by reducing nebulous "administrative" and "overhead" costs. In fact, this tax-code tweak will provide only token financial relief to most of those it applies to, and require a not insignificant cut to government income that could be better spent elsewhere.

To see how, let’s look at some numbers.

Raising the basic personal amount by $3,000 will save individuals a grand total of, at most, $263.70 each per year. While this might be significant for people on the lower end of the income scale, for those who are closer to the $75,000 cap, it is negligible. If you buy a single small coffee every working day, this doesn’t cover it.

The median individual income in Nova Scotia is little more than $30,000; an income of $75,000 represents an individual in the top 15 per cent of all earners in the province. A proposed tax reduction encompassing such a large swath of citizens is not an attempt to lessen the burden on those who are struggling to make ends meet; it is nothing but a showpiece to court upper middle-class voters.

At the same time, this action will cost the province somewhere in the vicinity of $50 million to $125 million per year, depending on how the cut is scaled for those with higher incomes. That's enough money to cover the salaries of a couple of hundred new family doctors (at $300,000 per year), or a thousand new teachers (at $50,000 per year). It seems a steep price to pay to buy a handful of votes.

Luke Hancox lives in Halifax.



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