Madam Speaker, it is with pleasure that I take part in the debate on Motion No. 259. The hon. member for Kamloops, Thompson and Highland Valleys has his heart in the right place in advocating a tax break for Canada's creators of culture.
As Canadians we are all indebted to our artists. The Canadian Alliance believes that all Canadians need tax relief from the government. We all know that Canadians are still the highest taxed in the G-7. Tax relief should be broad based and not be targeted.
I thank the Writers' Union of Canada for its correspondence regarding the bill. I agree with it that culture is not a partisan issue and that Canadian artists need a tax break. I also agree that professional artists are among the lowest paid workers in Canada.
That same message came out loud and clear during the public hearings conducted by the Standing Committee on Canadian Heritage during the winter of 1998. The committee travelled from coast to coast conducting meetings. Another recommendation that came out of these meetings was that income averaging be looked at.
Another issue addressed by the writer's union was that income averaging for artists be implemented so as to alleviate the unfair tax burdens. I agree that artists should be able to use income averaging to level the ups and downs from year to year.
It is also interesting that countries like Australia, Germany, Denmark, the Netherlands, Greece, France, the United Kingdom and Luxemburg all have some form of income averaging for artists. All members of this House should lobby the finance minister to implement this worthwhile option for artists. I would challenge all members of the House to do so by writing the Minister of Finance.
The Canadian Alliance has a solution that will not only help our artistic community but all Canadians. It is called solution 17, the single rate tax. All taxpayers will pay less. The single tax rate will have progressive deductions and our top personal rate will be 17%. In fact the total tax savings would amount to about $34 billion over five years, as well as paying down our debt, $10.22 billion over five years.
The advantages of the progressive average tax rate in solution 17 will be that it will first create a single marginal tax rate of 17%, 26% and 19%. Tax savings will total $17.2 billion. It will also increase basic personal and spousal credits to $10,000 from $7,131 and $6,055. Hence, the levels of credit will be protected from inflation once it is phased in. The tax savings would amount to about $8.3 billion. When we increase the basic rate, we know that, because the earnings of artists are low, all artists would be exempt from paying personal income tax until they make over $10,000 per annum.
Solution 17 would also introduce a $3,000 per year per child tax deduction to recognize the costs and the value of child rearing. Tax savings there would amount to about $2.4 billion.
A progressive average tax rate would decrease the EI rates to $2 from $2.40. It would also reduce taxes on employment. Tax savings would be $2.7 billion.
The single rate would eliminate the 5% surtax which would again give a tax savings of $762 million to all Canadians. It would also increase our RRSP and RPP contribution limits to $16,500, which amounts to about 30% of average income from $13,500, 18% of income, and allowable foreign content to 100% from 20% over the five year phase-in. This would improve the ability of middle income earners to maximize their contributions and better plan for their retirement. Tax savings would amount to about $600 billion.
Our single rate would also reduce capital gains tax to about 20% from nearly 40%, encouraging success and risk-taking.
Our single rate reduces the general corporate tax rate to 21% from 28%, equal to that levied on manufacturing and resource firms. This would also eliminate discrimination against a new economy. Tax savings for Canadians would be about $1.89 billion.
There is no doubt that solution 17 would reduce small business corporate tax rates to 10% from 12%, encouraging the start up of new firms. The tax savings would be $340 billion.
In summary, these are the main advantages of the single rate tax plan. Everyone, including artists, would benefit from tax relief. It increases the disposable income for all Canadians, removes discrimination between Canadian families and 1.9 million low income taxpayers would be removed from the tax roll, of which many of them are currently artists. There is no doubt that success and risk-taking would be rewarded.
As I indicated earlier, increasing the base exemption would amount to $10,000. There is no doubt that artists, certainly developing artists who make less than $10,000, would not have to pay taxes on income earned below $10,000. This would remove 1.9 million low income taxpayers from the tax role altogether. This would be a significant tax break for the working poor and would also increase disposable income, increase financial freedom, reduce child poverty and restore dignity by increasing self-sufficiency and lessening the welfare trap that we seem to be in today.
It is commendable that the member for Kamloops, Thompson and Highland Valleys brought this bill to the House. I am sure his message to all Canadians is that not only artists but all taxpayers need a tax break from the government's tax policies. There is no doubt we are in debt. We know how fortunate we are to live in a country where our artists are very successful not only in Canada but throughout the world.
Even though the bill is commendable, we in the Canadian Alliance Party certainly cannot support a $30,000 exemption for artists. We believe the solution is to give all Canadians broad based tax relief. Canadians certainly deserve it at this time.