Ottawa wages war on Canadian families through the income tax system, making it more difficult for parent to raise their own children.

When personal income tax was introduced as a "temporary" measure in 1917, families with children were granted a $3,000 basic exemption from income tax. Three thousand dollars doesn't sound like much, but adjusted for inflation it works out to $40,000 in today's dollars. In 1917, personal income tax was paid only on earnings in excess of what a family needed for housing, food, clothing and other essentials.

But the Canadian family in 2003 doesn't come remotely close to being able to keep its first $40,000 to sustain itself. A basic personal exemption of $7,765 plus a spousal exemption of $6,586 makes for $14,351. Families pay 16% federal income tax on earnings in excess of $14,351, and then 22%, 26% and 29% as income rises.

Does anyone think that a family of four can live on $14,351 per year in 2003 Consider the cost of food, electricity, gas, insurance, school supplies, clothes, sports, hobbies, and toys - not to mention rent or mortgage payments. If a family of four can't live on $14,351 per year, why does Ottawa start taking away 16% of earnings in excess of that amount Why not let a family keep its first $40,000 tax-free, like Canada did in 1917, and like the U.S. does today

Ottawa gives away billions of tax dollars through the Canada Child Tax Benefit and other spending programs. But these payments offer no incentive to rise out of poverty. These payments dry up completely as family income rises, killing incentives to work and earn. Studies by the C.D. Howe Institute and the Institute for Research on Public Policy have shown that as a family's income rises from $15,000 to $35,000, a family loses between 60% and 100% of each dollar that is earned. These losses take two forms. First, the Canada Child Tax Benefit, other federal payments, and provincial welfare payments are reduced or "clawed back" when parents earn money. Second, as earnings increase the family must start paying personal income tax, the CPP tax and the EI tax.

Ottawa should raise the basic personal exemption to $15,000 for every Canadian adult. Whether a couple has children or not, shouldn't the first $30,000 be available to pay for things like food and the rent or mortgage And why shouldn't a single person be able to keep all of the first $15,000 that she or he earns in a year

A further income tax exemption of $2,500 per child would help each and every Canadian parent to provide adequate food, clothing and other necessities to children. For example, a family of four (mom, dad, two kids) would pay no federal or provincial income tax on the first $35,000 earned. That's not quite as generous as the income tax exemption in place in 1917, but it's a large step in the right direction.