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Prying political parties from taxpayer trough

By Kevin Gaudet
web posted January 31, 2011 

It should not be better financially for you to give money to a federal political party than to donate to a real charity. A contribution to the separatist Bloc Québécois for example should not be better for your taxes than a donation to Ducks Unlimited. Sadly, it is though, because tax credits for political contributions are larger than tax credits for donations to real charities.

This is just one way in which our federal politicians have set up a system of subsidies and credits ensuring taxpayers, instead of party supporters, are paying for the business of politics.

It is time to end taxpayer subsidies for political parties.

Why not start with the $2 Vote Tax subsidy?

Taxpayers cough up $2 a year, per vote received in the last federal election, in a party subsidy that bolsters only political parties that garner over 2% of votes cast. This is a Vote Tax that costs taxpayers $30 million a year. It is a strange irony that increasing voter turnout, which improves democracy, has the direct impact of increasing taxpayer cash to political parties who those voters may not support.

The federal Conservatives are promising to do away with this Vote Tax subsidy. To his credit, Stephen Harper tried to scrap the Vote Tax shortly after the 2008 federal election.  The Liberals and NDP joined into the now-infamous coalition with the Bloc in order to keep the subsidy.

To ensure parties may still have the money they want or need to run campaigns, the donation limit should be raised for individual and business donors. All contributions should be published online shortly after they are received. This would make transparent all funding, allowing voters to be fully informed as to who supports what party and to what extent. Voters would then be able, if they choose, to use this information to affect their voting.

Ending the Vote Tax will take away more money from the Tories than any other political party, by far. They stand to lose $10.4 million per year compared to $7.3 million for the Liberals, $5 million for the NDP, and $2.8 million for the Bloc Quebecois. Even the Green Party, with zero elected MPs, gets $1.9 million a year from taxpayers from the vote tax.

Another way taxpayers subsidize political parties is through election reimbursements. Sixty per cent of the election expenses of candidates are reimbursed and 50 per cent of election expenses of parties are reimbursed after an election. The 2006 election party ‘rebates’ were $27.2 million and the candidate ‘rebates’ were close to $25 million.

Scrapping the Vote Tax subsidy, reimbursements and gold-plated tax credits would level the playing field for parties, requiring them to compete for donations. It would relieve taxpayers from some of the burden of funding political parties. It would eliminate one barrier to entry for new political parties. Finally, the cause of national unity would be helped if, instead of being subsidized by federal taxpayer dollars, the separatists would be forced to ask their few supporters for cash, instead of getting it from taxpayers.

Considering the level of esteem in which politicians are held doesn’t it make more sense to require them to raise their own money instead of giving them taxpayer support? ESR

Kevin Gaudet is the federal director of the Canadian Taxpayers Federation. © 2011, Kevin Gaudet

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