[mac_quote person=”Stephen Harper” date=”March 28, 2011″]Thanks to our low-tax plan, the average Canadian family is already paying $3,000 less in taxes each and every year.[/mac_quote]
This is one of the cornerstones of the Conservative narrative in this campaign. As John Geddes pointed out in Maclean’s last week, the $3,000 a year figure comes from Department of Finance calculations based on a hypothetical working couple with two kids earning about what the average family of four makes in a year: $100,000 before tax. Thanks to policies implemented since 2006, the department wrote, that family pays $1,963 less in income tax, receives $76 in child benefits, and reaps $960 in savings from the two-percentage points cut in the GST.
Now, since 960 is two per cent of 48,000, that last GST savings number seems to indicate that Canadian families spend around $50,000 a year in purchases of goods and services subject to GST. According to Statistics Canada, the average Canadian family indeed shells out $50,734 a year in expenditures, but that includes GST-exempt items as well, which might add up to a substantial slice of that total figure. The typical Canadian family, then, must be spending less than $50,000 a year in GST purchases–though we don’t know exactly how much less. So how did the Finance Department come up with $960? They couldn’t give us a breakdown of their calculations, but they told us that figure includes unspecified “indirect savings” coming from the fact that a lower GST also supposedly depresses prices for a number of tax-exempt goods and services.
Fair enough. Statistical estimates of this kind often take into consideration a complicated web of factors, and this could have been a zero bull story. Still, because we don’t know how much those “indirect savings” are, we’re giving it one bull.
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