NDP would scrap income splitting if elected

Cutting small business taxes, extending the capital cost allowance for machinery, and creating an innovation tax credit are just some of the promises New Democrat leader Tom Mulcair has unveiled from his party’s platform for the coming federal election, scheduled for October.

Read: Feds say family making $120K is middle class

But to pay for the perks, he’s promised to scrap income splitting for families and reverse corporate tax cuts.

Here’s what the NDP has promised so far:

• Restore the annual 6% increase in health care transfer payments to the provinces. That would potentially cost the federal treasury as much as $36 billion.

• Create one million daycare spaces, accessible to parents for no more than $15 per day. The national program would cost $5 billion per year when fully implemented over eight years.

• Reinstate a federal minimum wage, pegged at $15 per hour. This would apply only to a small number of workers in federally regulated industries, such as railways and banks.

• Immediately cut the tax rate for small businesses to 10% from 11%, at a cost of $600 million to federal coffers. A further reduction to 9% would follow when federal finances allow.

• Extend the accelerated capital cost allowance for machinery and equipment, which is set to expire this year, for two years. Cost: $1.2 billion.

• Create an innovation tax credit for businesses that invest in machinery, equipment or property used for research and development. Cost: $40 million per year.

• Restore $115 million in funding to the CBC, over three years.

Read: 2014 tax cuts leave federal budget on thin ice

To pay for his promises, Mulcair has so far vowed to:

• Reverse cuts to the corporate tax rate, which has been reduced to 15% from 22% under Prime Minister Stephen Harper. Mulcair has not specified how big a hike he’s contemplating, other than to say he would bring the rate closer to the average of G7 countries, which could mean a hike of as much as 4.5 percentage points.

Some economists estimate that each percentage point increase would rake an extra $1.5 billion into federal coffers. But other economists maintain companies would simply shift income to other countries to avoid paying additional taxes so the rate hike wouldn’t actually generate much revenue and would impede economic growth.

• Scrap the Harper government’s controversial plan to allow couples with young children to split their income for tax purposes. That would save $2.4 billion annually.

Read: Falling oil prices may hobble federal tax cuts