Proposed Home Renovation Tax Credit (Research Paper Sample)

Proposed Home Renovation Tax Credit
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Stephen Harper, the Conservative leader, promised to bring back the home renovation tax credit if his Conservatives are reelected. Most governments fund their national projects using revenue raised from taxation. Different policymakers react differently to proposed tax cuts depending on its impact to both the citizens and the economy in the long run. The tax credit by Harper would apply to all home renovations worth between $1,000 and $5,000. The taxpayer would, therefore, be able to get back up to $600. Such a home renovation tax credit policy target to benefit every resident irrespective of income. It would help both homeowners and businesses in the real estate industry (Campion-Smith, 2015).
The pledge by the Conservative government is a sensible policy expected to be supported by many homeowners. It came at a time when the renovation industry in Canada is booming past the demand for new homes. Most economists claim that the program is similar to the one initiated in 2009 but later scrapped in 2010 February. Before its introduction in 2009, the spending in renovation in 2008 had slowed to a crawling nature. The program allowed interested homeowners to claim up to $1,350, a 15% tax refund on renovations. The program was exceptionally popular, and more than three million Canadians took advantage of it claiming about $700 per claim. It generated about $4.3 billion worth of economic activities that was a sign that the program was embraced and added to the country’s GDP (McMahon, 2015). From the previous boom in the economy as a result of a similar program, it is evident that the proposed home renovation tax credit by Harper is a sensible policy.
According to the conservative leader, the program is expected to cost the government approximately $1.5 billion per year but the benefits will be more than the cost. The program is designed to target every homeowner irrespective of the type of house he/she owns. They will benefit by claiming back up to $600 if the cost of their renovation is between $1000 and $5000. This ensures that distribution of resources is equal among the Canadians (Aziz, Gibbons, Gorman, & Ball, 2012). Low, average and high-income earners, will benefit from the program that will save them some cash. Investors expect to take advantage of the new program to make money. Renovations tend to increase the curb appeal of any home thus increasing its resale value. Increased renovations at an affordable price also tend to reduce household mobility (Dachis, 2012). Harper is optimistic that the program will create employment for various professionals in the real estate industry. Since the tax incentive is redirected to the economy, the program will not only make the living standards of the affecte...