Tax update

The Conservative Party has been pushing for tax cuts as part of its agenda. Saturday (also Canada Day) marks the first round of changes.

* A one-percentage point cut in the GST to six percent.
* A universal child-care benefit of $1,200 a year to parents for each child under the age of 6. (This is taxable as income in the hands of the spouse with the lower income.)
* A tax credit for people who buy monthly or annual transit passes, amounting to 15.5 percent of the cost of the passes.
* A slight increase in the basic personal exemption and a new $250 employment credit will mean paying a little less income tax.
* But the rate rises from 15 percent to 15.5 percent on the first $36,400.

I was surprised Stephen Harper mentioned the transit pass tax credit. Conservatives do better in areas where public transit isn't prevalent, and worse in areas where public transit is dominant and necessary.

The GST (goods and services tax) is like a federal sales tax. Provinces also charge a PST (provincial sales tax). On higher priced purchases, residents of the United States and other countries can get a GST rebate.