Layton makes fiscal vow

MONEY MATTERS ‘ No new taxes, of any kind,’ NDP leader promises Economist running for party helps bring pitch to Bay Street

There Jack Layton stood, a lone socialist on Bay Street, making a promise no one thought would ever spring from the mouth of the leader of the tax- and- spend NDP.

“ No new taxes, of any kind,” Layton said from the floor of the old Toronto Stock Exchange. “ No tax increases of any kind.” The political boss of the Canadian left has decided that federal coffers are full enough. But he also promised to vote against any budget that introduces either Stephen Harper’s or Paul Martin’s version of tax cuts presented in the first few weeks of the election campaign.

Layton would vote no to the Conservative plan to slash the GST to 5 per cent and no to the Liberals’ $ 10 billion in corporate tax cuts.

“ Tax cuts that have no basis in terms of moving the economy forward, such as the GST proposal by Mr. Harper or the corporate taxes that have been proposed, $ 10 billion proposed by ( Finance Minister Ralph) Goodale, are not the wise choice now,” Layton said yesterday morning. And that element of Layton’s tax agenda isn’t likely to win the NDP any new friends — or voters — in the office towers of this neighbourhood.

“ Let’s face it. Most of the economists on Bay Street work for companies. Taxes are a cost. It’s really simple,” said Paul Summerville, the financial heavyweight running for the New Democratic Party in the Toronto riding of St. Paul’s.

“ So, if you can get the government to cut your taxes, your costs fall, therefore your profits go up.”

Summerville, who served as chief economist to RBC Dominion Securities and as a former managing director of the TD Bank, went on to say that the problem with that model of tax relief is those profits don’t necessarily get reinvested in the Canadian economy, but instead get doled out as dividends or investments overseas.

Summerville argued that the federal government is best suited to make reinvestments.

“ Given how sophisticated and how competitive the global economy has become, it’s absolutely essential that we make the investments in our workers, in our cities, that we create a strategic and comparative advantage by investing in our health care.”

Layton proposed to lighten the personal financial burden for low- income Canadians, by increasing the basic personal income tax exemption and by reducing the lowest income tax rate from 16 per cent to 15 per cent.

That modest tax cut comes, in part, straight out of the fiscal update the Liberals proposed two weeks ago. But the Liberals also proposed

to slash the tax rates of

middle-income earners by one percentage

point. There is no mention of that in the NDP

plan.

Voters will have to

wait for further financial details surrounding Layton’s plan, like any estimates on exactly how much money a family might save under his scheme.

“ We’ll be releasing a comprehensive program, completely costed, in a few days,” the New Democrat leader said.