On October 24th, Jason Kenney’s government tabled its first budget. While not focused on by the mainstream media, one of the budget’s most notable moves was to de-index income tax rates. As inflation grows, taxpayers will be moved up income tax brackets every year even though they have had no real increase in their incomes, a phenomenon otherwise known as “bracket creep.” .I recently stumbled upon Doc Brown’s DeLorean and traveled back in time to interview a younger Jason Kenney with his thoughts on bracket creep. .Me: “Mr. Kenney, you are the Reform Party MP from Calgary Southeast. How would you describe this Alberta budget?”.Young Kenney: “I am talking about truth in advertising and that is not offered in the budget. I said that bracket creep prior to the re-indexation of the tax code constituted an annual tax increase, but I also said that stopping a tax increase was not a tax cut. People running stores increase prices every year. It is ridiculous to say if one year they decide not to increase them they are therefore cutting their prices. I thought the member was an accountant. I do not know how he gets that twisted logic.” – February 7th, 2002.Me: “Wow, tough criticism. What would you say to a government MP who insists this is a tax cut?”.Young Kenney: “They want to take credit for that as a tax cut. I am afraid it simply does not wash. If we tried that kind of accounting as a CFO at a company, we would end up making license plates in a provincial institution. That does very little to correct the significant disadvantage we continue to face vis-à-vis our major competitors and trading partners.” – May 14th, 2001.Me: “Do you think Alberta should bring back the single rate?”.Young Kenney: “The optimum tax policy is not to penalize people for working hard. We would adopt the generous exemptions I have outlined plus eventually a single rate which is progressive.” – May 14th, 2001.Me: “If you could ask the Finance Minister one question, what would it be?”.Young Kenney: “How can the minister continue to stand in his place and justify a tax system which taxes people without their even knowing it through this pernicious tax grab called bracket creep?” – Question Period, February 10th, 1999..Me: “Is deindexing the brackets really that big a deal?”.Young Kenney: “Bracket creep… is a serious systemic flaw in our tax system.” – February 25th, 1998.,.Me: “You seem to feel very strong about bracket creep. Tell me more.”.Young Kenney: “Income taxes paid by the average taxpayer went up by 10 per cent largely because the government had kept in place Brian Mulroney’s hidden tax grab called bracket creep which the OECD says is hammering our economy. I went on to say that if the finance minister will not commit to broad based tax relief, will he at least commit to stop raising taxes through the hidden tax grab called bracket creep?” – February 25th, 1998. Trudeau on WE scandal: Case closed .Me: “Can it really be that bad?.Young Kenney: “In the budget released yesterday there was a claim that there was tax relief for Canadians, particularly low and modest income Canadians. In fact, when one takes into account the effect of the deindexation of the tax brackets, this sneaky, back door, malicious tax increase imposed on Canadians by the Tory party…, one will find more Canadians paying taxes next year than they did last year and more Canadians paying more taxes than they ever did before.” – February 25th, 1998.,.Me: “Oh, wow. Powerful stuff. If you could stand in the Legislature and talk about this, what would you say? Could you quote a Liberal who agrees with you?”.Young Kenney: “The sneakiest tax increase of all was the deindexation of personal income tax. The minister keeps quiet about this. The finance minister did not even mention it in his budget this year. It is a very simple decision that will cost Canadians billions of dollars more annually but he kept quiet about it. Here again, low and middle income Canadians will carry the heaviest burden. The leader of the opposition went on to say that such underhanded and clandestine deindexation represents the most massive and heavy tax increase in Canada’s history. It will cost Canadians billions of dollars. Sneaky, hidden, silent and automatic.” – Jason Kenney quoting John Turner on February 25th, 1998.Me: “Could you explain how low income Canadians are the hardest hit by this tax increase?”.Young Kenney: “Part of the story is that since 1993, 1.2 million low income Canadians – those who can least afford it – many of whom are under the poverty line, single mothers and single parents struggling to get by or seniors on fixed incomes, have seen themselves pushed on to the tax rolls by the government’s pernicious back door tax grab called bracket creep, by the pernicious tax on inflation. If these people get a cost of living adjustment in their pension cheques or their minimum wage income from working in the labour force, if they get an automatic COLA, a cost of living adjustment, they end up paying taxes not because they are making more in real terms—they are making the same in real terms—but because the government decides to generate more revenue to finance its insatiable appetite for spending in a way that is not transparent, in a way that Canadians cannot see it and in a way that parliament cannot approve it.” – March 2nd, 1999.Me: Are there independent reports about the perils of deindexing income taxes?.Young Kenney: “In a study released last week by the Canadian Taxpayers Federation, an organization with which I have some familiarity, it was reported that since 1986, since the then Progressive Conservative government brought in bracket creep and deindexed the tax system with respect to any inflation under 3%, the government has generated an annual revenue haul of $12 billion. That is just as a result of bracket creep. Next year Canadians will end up paying $1,300 more than they did before as a result of the consequence of bracket creep. The government has added 1.2 million people on to the tax rolls. It has pushed millions of modest income Canadians into higher tax brackets.” – March 2nd, 1999.Me: Thanks for looking at this future budget. Do you have any last words about the new Premier who wants to bring back bracket creep?.Young Kenney: “A hypocrite says one thing and does another.” – April 22nd, 2005.Links to the direct quotes above can be found HERE and HERE
On October 24th, Jason Kenney’s government tabled its first budget. While not focused on by the mainstream media, one of the budget’s most notable moves was to de-index income tax rates. As inflation grows, taxpayers will be moved up income tax brackets every year even though they have had no real increase in their incomes, a phenomenon otherwise known as “bracket creep.” .I recently stumbled upon Doc Brown’s DeLorean and traveled back in time to interview a younger Jason Kenney with his thoughts on bracket creep. .Me: “Mr. Kenney, you are the Reform Party MP from Calgary Southeast. How would you describe this Alberta budget?”.Young Kenney: “I am talking about truth in advertising and that is not offered in the budget. I said that bracket creep prior to the re-indexation of the tax code constituted an annual tax increase, but I also said that stopping a tax increase was not a tax cut. People running stores increase prices every year. It is ridiculous to say if one year they decide not to increase them they are therefore cutting their prices. I thought the member was an accountant. I do not know how he gets that twisted logic.” – February 7th, 2002.Me: “Wow, tough criticism. What would you say to a government MP who insists this is a tax cut?”.Young Kenney: “They want to take credit for that as a tax cut. I am afraid it simply does not wash. If we tried that kind of accounting as a CFO at a company, we would end up making license plates in a provincial institution. That does very little to correct the significant disadvantage we continue to face vis-à-vis our major competitors and trading partners.” – May 14th, 2001.Me: “Do you think Alberta should bring back the single rate?”.Young Kenney: “The optimum tax policy is not to penalize people for working hard. We would adopt the generous exemptions I have outlined plus eventually a single rate which is progressive.” – May 14th, 2001.Me: “If you could ask the Finance Minister one question, what would it be?”.Young Kenney: “How can the minister continue to stand in his place and justify a tax system which taxes people without their even knowing it through this pernicious tax grab called bracket creep?” – Question Period, February 10th, 1999..Me: “Is deindexing the brackets really that big a deal?”.Young Kenney: “Bracket creep… is a serious systemic flaw in our tax system.” – February 25th, 1998.,.Me: “You seem to feel very strong about bracket creep. Tell me more.”.Young Kenney: “Income taxes paid by the average taxpayer went up by 10 per cent largely because the government had kept in place Brian Mulroney’s hidden tax grab called bracket creep which the OECD says is hammering our economy. I went on to say that if the finance minister will not commit to broad based tax relief, will he at least commit to stop raising taxes through the hidden tax grab called bracket creep?” – February 25th, 1998. Trudeau on WE scandal: Case closed .Me: “Can it really be that bad?.Young Kenney: “In the budget released yesterday there was a claim that there was tax relief for Canadians, particularly low and modest income Canadians. In fact, when one takes into account the effect of the deindexation of the tax brackets, this sneaky, back door, malicious tax increase imposed on Canadians by the Tory party…, one will find more Canadians paying taxes next year than they did last year and more Canadians paying more taxes than they ever did before.” – February 25th, 1998.,.Me: “Oh, wow. Powerful stuff. If you could stand in the Legislature and talk about this, what would you say? Could you quote a Liberal who agrees with you?”.Young Kenney: “The sneakiest tax increase of all was the deindexation of personal income tax. The minister keeps quiet about this. The finance minister did not even mention it in his budget this year. It is a very simple decision that will cost Canadians billions of dollars more annually but he kept quiet about it. Here again, low and middle income Canadians will carry the heaviest burden. The leader of the opposition went on to say that such underhanded and clandestine deindexation represents the most massive and heavy tax increase in Canada’s history. It will cost Canadians billions of dollars. Sneaky, hidden, silent and automatic.” – Jason Kenney quoting John Turner on February 25th, 1998.Me: “Could you explain how low income Canadians are the hardest hit by this tax increase?”.Young Kenney: “Part of the story is that since 1993, 1.2 million low income Canadians – those who can least afford it – many of whom are under the poverty line, single mothers and single parents struggling to get by or seniors on fixed incomes, have seen themselves pushed on to the tax rolls by the government’s pernicious back door tax grab called bracket creep, by the pernicious tax on inflation. If these people get a cost of living adjustment in their pension cheques or their minimum wage income from working in the labour force, if they get an automatic COLA, a cost of living adjustment, they end up paying taxes not because they are making more in real terms—they are making the same in real terms—but because the government decides to generate more revenue to finance its insatiable appetite for spending in a way that is not transparent, in a way that Canadians cannot see it and in a way that parliament cannot approve it.” – March 2nd, 1999.Me: Are there independent reports about the perils of deindexing income taxes?.Young Kenney: “In a study released last week by the Canadian Taxpayers Federation, an organization with which I have some familiarity, it was reported that since 1986, since the then Progressive Conservative government brought in bracket creep and deindexed the tax system with respect to any inflation under 3%, the government has generated an annual revenue haul of $12 billion. That is just as a result of bracket creep. Next year Canadians will end up paying $1,300 more than they did before as a result of the consequence of bracket creep. The government has added 1.2 million people on to the tax rolls. It has pushed millions of modest income Canadians into higher tax brackets.” – March 2nd, 1999.Me: Thanks for looking at this future budget. Do you have any last words about the new Premier who wants to bring back bracket creep?.Young Kenney: “A hypocrite says one thing and does another.” – April 22nd, 2005.Links to the direct quotes above can be found HERE and HERE
