That’s where the votes are

Two years after becoming Liberal Party leader, Justin Trudeau finally revealed his first substantial economic policies Monday, unveiling a proposed tax break for the middle class and a richer child benefit plan that could provide thousands of extra after-tax dollars for families with children.

Trudeau pledged to cut the current 22 per cent tax rate on incomes between $44,701 and $89,401 to 20.5 per cent, and pay for it with a new 33 per cent bracket on incomes over $200,000. He also said the Liberals would cancel a Tory child care benefit and roll together two existing programs to create a more generous benefit that would send monthly cheques totalling from $1,695 to as much as $18,200 a year, depending on income and family size. It would be structured so that benefits decrease as income increases.

The plan is an unabashed bid to draw middle-income voters away from the Conservatives, who announced their own multi-billion-dollar preelection plans in the federal budget two weeks ago. Trudeau emphasized repeatedly that Liberals would send more money to more Canadians, with fewer strings attached than the Conservative alternative. “With our plan,” Trudeau said, “all you have to be is part of the middle class or hoping to join it”.

Well, all right: Canadian voters will now have a clear choice to make between two parties with two distinct views on how to “help” the middle class. Not that the middle class is suffering to anything like the degree politicians and much of the pundit class would have us believe: the decline in middle class incomes ended nearly two decades ago, since which time they have grown by more than 20 per cent after inflation. The share of income going to the much-resented top one per cent, meanwhile, has been falling for the better part of a decade, and is now level with where it was in 1998.

That’s not to say things could not be improved. The Liberals’ revamped child benefit appears broader, simpler and better targeted than the Tory plan, without imposing punitive clawback rates. It would cost an extra $4 billion a year, half of which would come from cancelling the Conservatives’ incomesplitting plan. That last wouldn’t be our choice, but it is a clear choice, which is to the good.

What’s discreditable in the Liberal plan isn’t so much the pandering to middle class voters (note that there was no tax cut for those in the bottom bracket) as the suggestion, never far from the surface, that their supposed plight is the fault of those better off than them. At one point Trudeau said the Canadian dream had been “taken from too many for the benefit of too few for too long.” Note that word: taken. If they were not outright thieving from the middle class, certainly the rich were accused of not giving enough to them.

The reality is that Canada’s one per cent already pays a great deal: as it is, more than 21 per cent of all income tax revenues come from those earning over $200,000. While the Liberals’ proposed tax increase is hardly punitive, neither should it be seen in isolation. Ontario’s Liberal government has twice raised its rate on top earners since 2012; Alberta NDP leader Rachel Notley — who could well be premier by the end of the week — likewise proposes to “ask” the well off to pay “a little more.” OK: if 21 per cent of revenues is not enough, what is? Or is the right amount always “a little more” than it is now?

Last year Trudeau pledged no increase in income taxes, asserting: “There is no reason to raise taxes on (Canadians) now. We are not going to be raising taxes.” He will now have to explain why he has changed his mind. It was not necessary, after all, to raise the top rate to fund the Liberal tax cut: the same revenues could as easily have been raised by broadening the tax base. The Liberals simply wished to be seen to be soaking the rich, the better to compete for the class-envy vote with the NDP.

Trudeau’s Liberals enjoy slagging the Harper Tories as a manipulative bunch, among whom every decision is political. For two years he has been able to pretend to operate by different rules. Monday’s brazen bid for votes puts an end to that.

The reality is that Canada’s one per cent already

pays a great deal