Flaherty hints of personal tax cuts

MONTREAL—Federal Finance minister Jim Flaherty hinted today that personal tax cuts could be included in this month’s budget as a way to help stimulate the country’s economy.
“What I’ve been hearing across Canada, and also from my council of economic advisers, has been that we need to invest more in infrastructure,” Flaherty said ahead of a meeting with the Canadian Taxpayers Federation as part of his pre-budget consultations.

“That is one way, of course, of supporting the economy, of stimulating the economy, but also we need to look at tax reductions, additional tax reductions, as another way of supporting the economy,” he added.
There have been reports that U.S. president-elect Barack Obama’s administration will bring in tax cuts as part of its economic stimulus package when he takes office later this month.
Asked if any Canadian tax cuts also eventually could mean reductions in services, Flaherty insisted the main goal is to keep the economy strong in the face of a worsening situation.
“We need to take some steps in the short-term to provide stimulus in the economy but we also have to, during this time of economic turbulence, take steps to build capacity in the economy so we come out of the slowness in a position of strength,” he said.
“This is very important and tax reductions are one way of encouraging investment, leaving more money in people’s pocket so that they spend it, so that they help strengthen the economy.”