Tax Cuts

Canada's new Conservative government, carried into office last summer in a razor's-edge upset victory, moved last week to make good on the brave campaign talk of a $500 million tax cut. In a modest beginning, the Tories proclaimed personal income-tax reductions (effective Jan. 1) amounting to $146 million a year, sprinkled mainly in the lower income brackets.

Finance Minister Donald Fleming rose in Parliament to outline what he called a bold program to bolster "confidence and prosperity." He cut 100,000 taxpayers from the rolls entirely, gave his most substantial reductions to the 70% of Canadians whose taxable incomes are $2,000 a year or less; e.g., a $5,000-a-year wage earner with two children will save $64. Even though the Tories had earlier poured $150 million into higher old-age pensions and pay boosts for the armed forces and civil service, Fleming still came out in the black (predicted surplus: $80 million). For this he could thank the ousted Liberal regime; fearful of spurring inflation, the luckless Liberals had left $252 million unspent in the treasury.

The Liberal opposition now raked the Tories for not going far enough. Snapped their finance critic, James Sinclair: "The minister groaned and produced a very small mouse." Perhaps to placate taxpayers who might agree, Fleming pointed out that in 5 1/2 months he had not yet been in office long enough ''to achieve all the measures of tax reform" he would like--a hint he doubtless hoped would not be lost on the voters, who will probably go to the polls again in the spring.

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