16 September 2008

Harper & His Credits

Today the Conservatives announced that, if re-elected, they will give a $5000 tax credit to all first-time homebuyers to help alleviate some of the costs involved. This will work out to a $750 tax rebate. Naturally, Conservative opponents are denouncing the move as either vote-buying or a worthless drop in the bucket (fortunately not both, since that would be contradictory) compared to the excessive costs of buying a home these days. As someone who looks at the real estate market today and sees a whole lot of numbers after the dollar sign, I like this move by the government. Of course $750 isn't a great amount relatively speaking, but here's why the move is brilliant from a conservative perspective.
1. It reinforces the buttress that it is not the government's job to buy you things or provide you with lavish rewards; they will, however, give you a modest chip-in to help you out so as to remain as uninvolved in your daily life as possible. It's the same concept as what was behind the child tax credit. Opponents famously derided that, yet not a single person I'd wager sent the cheque back once it came to their mailbox. Whereas the Liberals were touting a universal child care system, which would come at great cost in terms of setting up the infrastructure and then maintaining it, the Conservatives simply said, "Here's some money from my wallet to help you out a bit and give you the choice to look after your kids in the manner and form of your choice."
2. Conservatives believe that Canadians are taxed too heavily; giving some of that money back lowers that burden, thus giving them more money to spend and thus bolster the economy. If you spend your child care money buying beer and popcorn, fine, the liquor tax and the GST comes back to us in that form and you're boosting your local stores. If you choose to buy a new couch for your new home with your $750, that's a dandy little kick for a small business or a large chain store depending on where you buy from. In any event, you're contributing to the national productivity, giving Canadian workers employment and spending.
3. The retail politics of the move goes over well and reminds Canadians that the government hears their concerns about rising prices and does a little bit to ease the burden.

Let the critics go wild, and for whatever their reasons. These little credits that help people out at tax time are much appreciated by everybody that they give a little boost to. It's a staple of governments in this country to give little goodies out, and Harper has deftly utilized this system.

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