BUSINESS

Conservative Convention To Debate 'Less Progressive Tax System' (UPDATED)

10/31/2013 03:45 EDT | Updated 11/03/2013 11:37 EST
CP

UPDATE: The Conservative Party of Canada has voted to make a "less progressive tax system" part of its platform.

Delegates at the party's plenary session approved on Saturday an amendment calling for Canada to "move to a less progressive tax system by reducing the number of personal income tax brackets," the Toronto Star reported.

The amendment is interpreted by critics to mean the party wants to eliminate the highest income tax bracket -- the 29 per cent bracket -- levied on the highest incomes.

The NDP was quick to condemn the move.

"Far from moderating their message and appealing to Canadians, the Conservative Party turned even further to the right this weekend," the party said in a statement.

Original story follows below.

Conservatives gathering at this weekend’s party convention will consider a motion that would likely mean lower taxes for Canada’s biggest earners.

A proposed amendment to the Conservatives’ policy book would “encourage the Conservative Party to move to a less progressive tax system by reducing the number of personal income tax brackets.”

The proposal comes from the riding association of Calgary-Nose Hill, the seat of Tory MP Diane Ablonczy.

There’s no guarantee the amendment will be voted in as an official Conservative policy, and many party policies don’t translate into actual legislation.

As the Tories are unlikely to raise taxes on the poor or middle class by eliminating a lower tax bracket, the amendment targets the highest income tax bracket — the 29 per cent bracket, paid on incomes above $135,000.

The move has some progressive critics of the government worried.

Further eroding the tax base would mean less money for new federal programs or for critical investments in infrastructure, health care, jobs training or clean energy research and development,” wrote Jonathan Sas, research director at the left-leaning Broadbent Institute.

“Should the government make the tax system less progressive, one wonders what current programs Harper will put on the chopping block to cover for the lost revenue.”

Some economists have linked the increase in income inequality in Canada since the early 1990s to the series of reductions in top income tax rates during this period, carried out by both the current Conservative and previous Liberal governments.

Armine Yalnizyan, an economist for the Canadian Centre for Policy Alternatives, argued in a 2010 research paper that slowly declining taxes for Canada’s richest explain in part why the wealthiest one per cent of Canadians have seen much stronger earnings growth in recent years than the general population.

The last time the richest Canadians were taxed at this [low] level was in the 1920s,” Yalnizian wrote.

But right-leaning economists dispute the idea that lower taxes at the top of the bracket increase inequality. They argue lower taxes spur economic growth, thereby helping lower-income people to find work and improve their standard of living.

That’s certainly the position of the Conservative Party of Canada. Much of the proposed tax policy amendment has already been accepted by the party’s national committee, with only the wording of the “less progressive tax system” clause to be debated.

That clause will be debated this weekend in closed-door sessions and — if successful there — will be made part of the policy resolutions to be voted on by all Conservative delegates.

Also on HuffPost

Richest Canadians 2012