Ontario's 30% Tax-Cut Plan Gets Lukewarm Reception --- Premier Hopes to Stimulate The Economy, but Voters Aren't Convinced
AuthorAffiliation Staff Reporter of The Wall Street Journal</br></br>Canada's most populous province must reduce its chronic deficits, Mr. Harris argues, or risk being left behind as other provinces already have moved to balance their budgets.</br></br>Now Mr. Harris is moving ahead with his promised 30% income-tax cut. "We want to stimulate the economy with consumer spending" and by "rewarding initiative," he says. The revenue lost because of the tax cut will return to the government's coffers through "increased spending, more jobs and more sales taxes," he believes.</br></br>But is it really so simple? Can the government cut taxes and reduce spending simultaneously, without triggering a recession? And if the government goes along with its plans, including eliminating 13,000 public-sector jobs, will the economy create new jobs?</br></br>Although some economists believe the conservative government's plans are achievable, voters aren't so sure. And unlike the situation in America, where calls for lower taxes and cuts in social spending are greeted enthusiastically by large numbers of voters, liberal-minded Ontarians are in a stir.