A question many taxpayers are asking following the election of a Liberal minority government is what price is Prime Minister Paul Martin willing to pay to win the support of New Democrat leader Jack Layton.

On election day, voters handed 135 seats to Martin's Liberals, 99 seats went to the Opposition Conservatives, 54 seats were picked-up by the Bloc Québécois, and the NDP scored 19. Also elected was one independent.

Minority governments do not last long. But until the next election Mr. Martin will need Mr. Layton to survive. What will it cost us Will it be higher taxes; new home care, child care and pharmacare programmes; a windmill in every community; or radical changes to Canada's voting system that only favour the NDP

Mr. Martin promised to spend billions of dollars more on social programmes, but he knows there are limits on how much the government can spend. And because Canadians will not accept a return to budget deficits - or more taxes - it is unlikely that Mr. Layton's NDP will push Mr. Martin over the fiscal abyss. But it is safe to predict the Liberals will use less of the federal surplus for debt repayment and more of it for programme spending.

The concern of many voters is whether the Prime Minister will stop the NDP's worst excesses (as well as those of the Liberal party) from becoming law. For example, Mr. Layton promised not to tax those individuals who earn less than $15,000. This might sound like progressive policy - who is in favour of taxing the working poor - but the NDP's proposal is unsound public policy. Why

Currently, Ottawa does not tax the first $8,012 of income - an amount called the Basic Personal Exemption (BPE) - an individual makes, after which federal income tax of 16% is applied (on income up to $35,000). Under the NDP plan a person making $15,000 or less would pay no federal income tax. But if that same person earned $15,001 the taxman would collect $1,118 since the tax would be collected on the amount over $8,012. This is because Mr. Layton is proposing to exempt only people with incomes under $15,000, anyone earning more will continue to pay taxes on the income above the BPE of $8,012. The incentive for taxpayers to ensure income does not rise above the cut off is obvious and the results predictable, more low-income people not climbing the income ladder.

Mr. Martin should revise this policy by raising the exemption for all taxpayers to $15,000. This would, of course, mean giving tax relief to all Canadians (O the horrors!). It would also remove low-income Canadians from the tax rolls and ensure workers are not discouraged from earning more, as they would be if Mr. Layton has his way. Raising the BPE to $15,000 is both wise fiscal policy and smart social policy.

Mr. Layton has also called for a snap referendum on proportional representation. Here as well Mr. Martin must not let himself be held hostage. Any proposal to change Canada's voting system will require careful study. British Columbia, now leading the nation on electoral reform, has embarked on a multi-year process with citizen participation. Rather than rush into a referendum the federal government can tackle the democratic deficit by first reforming the workings of Parliament and giving lawmakers more power - ideas the Prime Minister once championed.

Granting municipalities a share of federal gas tax revenues has the support of all party leaders. But give us a simple, transparent and accountable transfer of these funds to municipalities, please and thank you. Federal gas tax money should not be used as an excuse for Ottawa to meddle in municipal affairs or open a federal Department of Cities.

As Prime Minister, Mr. Martin has proven himself to be a ditherer. Will he now act decisively - either by adopting NDP policies or rejecting them - with Mr. Layton capable of toppling his government Taxpayers have good reason to wonder, and worry, which way he will shift.