Flaherty speech today

[Topaz]

Which way will the Finance ministry go, GST or lower income tax? It was reported on TV last night, that it would cost 5 Bil to do either. I feel most Canadians would rather see a drop in income tax. Any thoughts?

[Higgly]

Which way will the Finance ministry go, GST or lower income tax? It was reported on TV last night, that it would cost 5 Bil to do either. I feel most Canadians would rather see a drop in income tax. Any thoughts?

A lot of tax cuts! Short term happiness. What the Conservatives have done, and this is something they always do, is toss the dice with the economy and project that the good times will keep on rolling. The Liberals were more conservative in their projections and always ended up with surpluses which they squirrelled away for a rainy day by paying down the (Mulroney) debt.

We'll see if the Conservatives have guessed right. Me, I would have rather seen the money go to better health care.

[Topaz]

Well, right on time, out taxes are to go down and the gas prices went from 93 to 99.9 in a matter of a few hours!!!! The oil prices are what, 90 a barrel and I read by next year they could be 200! Probably if Bush has his war with Iran.

[Higgly]

Well, right on time, out taxes are to go down and the gas prices went from 93 to 99.9 in a matter of a few hours!!!! The oil prices are what, 90 a barrel and I read by next year they could be 200! Probably if Bush has his war with Iran.

Patricia Croft, Chief Economist with Phillips, Hager and North (very good Mutual funds if you can afford them) says that the GST cut is a mistake and that more should have been done on income taxes. I agree. Taxing income is a disincentive to earn, and to save.

[Fain]

A lot of tax cuts! Short term happiness. What the Conservatives have done, and this is something they always do, is toss the dice with the economy and project that the good times will keep on rolling. The Liberals were more conservative in their projections and always ended up with surpluses which they squirrelled away for a rainy day by paying down the (Mulroney) debt.

We'll see if the Conservatives have guessed right. Me, I would have rather seen the money go to better health care.

Your speech there was just horrible. Very little taken into account in both your attack of one party and your defence of another.

I personally believe out of the 3 parties, conservatives leaders know best how to tackle issues such as debt reduction and tax cuts. Another GST cut would help me immensely in the near future.

[Higgly]

Your speech there was just horrible.

You're right! I forgot to mention that the $700 increase in the basic personal exemption was something that the Liberals had instituted and that the Conservatives cancelled when they came into power!

Thanks for reminding me!

[August1991]

Canadians will enjoy a modest break in their personal income taxes and a 1 per cent cut in the goods and services tax, Finance Minister Jim Flaherty announced today.

Flaherty turned his fall economic statement into a mini-budget this afternoon as he unveiled a series of tax breaks that he said would drop tax rates in Canada to their lowest level in almost 50 years.

The Tories made good on their pledge to drop the GST to 5 per cent, although the lower rate won't take effect until Jan. 1, 2008, which means Canadians won't see the savings for the busy Christmas shopping season.

The finance minister also announced that the minority Conservatives will drop the tax rate on the lowest person tax bracket to 15 per cent from 15.5 per cent, retroactive to Jan. 1, 2007. That reverses a tax hike introduced by Flaherty in his 2006 budget.

As well, Flaherty said the government is raising the personal exemption to $9,600 from $8,929, retroactive to Jan. 1, 2007. That's the amount Canadians can earn without paying taxes. The exemption will rise again on Jan. 1, 2009 to $10,100. It's a move that will put more money in the pockets of low-income Canadians.

In total, the promised tax breaks announced today to individuals and corporations total $60 billion over the next five years.

Liberal leader Stephane Dion announced late this afternoon that his party will not vote against the government on the mini-budget, thus avoiding an election.

Toronto Star

So, the Tories bring back Martin's income tax. Even better, they raise the personal exemption (as the CTF suggested) and they do both retroactively. This means that everyone is going to get a hefty tax refund in Spring 2008 just when the government is likely to fall.

As to the GST cut, I think it's wise to wait until the New Year. Christmas is already too commercial.

Dion, not surprisingly, is going to vote in favour of these measures. "Do you want that carpet in blue or black, Mr. Dion?"

We'll see if the Conservatives have guessed right. Me, I would have rather seen the money go to better health care.

Tax and spend is so Carter/Mondale. Edited October 30, 2007 by August1991

[Higgly]

Tax and spend is so Carter/Mondale.

On the other hand, health care is so ..... Canadian.

[Topaz]

Well, the Cons must be in an election mode or the Xmas!! When they came in, they taxed the poorest and now they took it away!!

[sharkman]

Toronto Star

So, the Tories bring back Martin's income tax. Even better, they raise the personal exemption (as the CTF suggested) and they do both retroactively. This means that everyone is going to get a hefty tax refund in Spring 2008 just when the government is likely to fall.

As to the GST cut, I think it's wise to wait until the New Year. Christmas is already too commercial.

Dion, not surprisingly, is going to vote in favour of these measures. "Do you want that carpet in blue or black, Mr. Dion?"

Tax and spend is so Carter/Mondale.

Yes, Dion is a whipped dog these days, I would almost feel sorry for him if he wasn't a Liberal. It's going to be a tough winter for the LPC, and it looks good on them.

[jdobbin]

Toronto Star

So, the Tories bring back Martin's income tax. Even better, they raise the personal exemption (as the CTF suggested) and they do both retroactively. This means that everyone is going to get a hefty tax refund in Spring 2008 just when the government is likely to fall.

As to the GST cut, I think it's wise to wait until the New Year. Christmas is already too commercial.

They waited till New Year's Day because it gives business a day to reset the rate. I don't think it has anything to do with being because Christmas is too commercial.

The Martin tax cut coming back in a welcome change in policy for the Tories. The corporate tax cut is far too small.

The Liberals can support this budget while still criticizing the GST cut. The majority of economists agree it is a waste of $5 billion in terms of making Canada competitive. I think Dion should say that if he is elected, he will restore the GST to 7% and drop corporate taxes 50% and income taxes 20%.

http://ca.news.yahoo.com/s/capress/071030/...mini_budget_gst

Here's what the GST cut will do:

- A pizza per month - that's about what most consumers could buy with another percentage-point reduction on the goods and services tax proposed Tuesday by the Conservatives.

Edited October 30, 2007 by jdobbin

[sharkman]

I notice they avoided using the phrase," beer and popcorn"

The GST cut was nice, the income tax cut terrific, and only liberals could find reason to complain. You better hope enough Liberals vote in favour of these cuts an election would have an improved chance of a Tory majority.

[jdobbin]

I notice they avoided using the phrase," beer and popcorn"

The GST cut was nice, the income tax cut terrific, and only liberals could find reason to complain. You better hope enough Liberals vote in favour of these cuts an election would have an improved chance of a Tory majority.

The GST cut doesn't really amount to much for anyone/ It certainly doesn't make Canada competitive like even greater corporate and income tax cuts.

The Liberals have already said they won't bring down a government over tax cuts. It doesn't mean they can't say what they would have done differently. Considering the fact that Flaherty is restoring Martin's tax cut, the Liberals have every reason to support the budget.

[Michael Bluth]

I notice they avoided using the phrase," beer and popcorn"

The GST cut was nice, the income tax cut terrific, and only liberals could find reason to complain. You better hope enough Liberals vote in favour of these cuts an election would have an improved chance of a Tory majority.

Of course the Liberals won't have the cojones to vote against the budget.

Will they sit on their hands again or support it?

The Conservatives made a mistake with the 1/2 point reversal on the lowest bracket. They recognized it and changed course.

The increases in the BPE are huge for lower income Canadians.

This fiscal update has big cuts for everybody. The NDP and Bloc are playing the role of the real opposition. The Liberals? Dithering yet again. Where have we heard that one?

[sharkman]

I don't know how the idea of making Canada competitive is connected with tax cuts, but any GST or income tax cut has nothing to do with it. And since nothing is done in a vacuum, mere tax cuts will not touch it. Since our dollar has risen a reported 20% in one year, no corporate tax cut will offset that. Business will have to do what it has always done: not depend on the Government for handouts, and adapt to the changing market place or die. Except, of course, for Air Canada and Bombadier.

[sharkman]

Of course the Liberals won't have the cojones to vote against the budget.

Will they sit on their hands again or support it?

The Conservatives made a mistake with the 1/2 point reversal on the lowest bracket. They recognized it and changed course.

The increases in the BPE are huge for lower income Canadians.

This fiscal update has big cuts for everybody. The NDP and Bloc are playing the role of the real opposition. The Liberals? Dithering yet again. Where have we heard that one?

Nothing like taking your competitors idea and beating him with it!

[old_bold&cold]

I think the CPC have done the right thing, and it has happened at a time when Canadians should soon start to see more buying power from our looney. So yes this will benefit the people and business, without going over board. The fatc that it make Dion and the Liberals loook bad, is just icing on the cake

[geoffrey]

On the other hand, health care is so ..... Canadian.

Considering we aren't even top 10 in health care in the OECD, I don't see how that has ever been true. Think for yourself and stop believing propaganda there Higgly. Do you think 12 hour ER waits and years waiting for surgery for disabling conditions is acceptable??

I like to think not.

I know how to spend my money better than the government does, and these tax cuts are welcome. I would have liked to see it go further, but that may be asking too much in a minority situation. Too many cuts to the lower income bracket will eventually skew the system too far. The upper rates need reduction as well.

The GST cut is catchy, and it fulfills a promise. Less ammo for the opposition. It was essientially a given. Plus people will enjoy the ease of calculating a 5% tax.

[jdobbin]

I don't know how the idea of making Canada competitive is connected with tax cuts, but any GST or income tax cut has nothing to do with it. And since nothing is done in a vacuum, mere tax cuts will not touch it. Since our dollar has risen a reported 20% in one year, no corporate tax cut will offset that. Business will have to do what it has always done: not depend on the Government for handouts, and adapt to the changing market place or die. Except, of course, for Air Canada and Bombadier.

A 50% corporate tax cut will make Canada competitive with the world, much of which has lower corporate rates than Canada. The 1% cut in the rate still means Canada has one of the highest corporate tax rates in the industrialized world.

http://finance.sympatico.msn.ca/taxes/insi...umentid=5061116

A KPMG survey has found that Canada has one of the world's highest corporate tax rates, but less than the United States, while the GST is relatively low.

The lowest corporate taxes among developed economies are still to be found in the countries of the European Union, KPMG International's latest global tax survey found.

In a review of corporate tax rates at the beginning of 2007 in 92 countries, the average rate in the EU was 24.2 per cent, compared with 28 per cent in Latin America and 30.1 per cent in Asia-Pacific.

Among developed economies, Canada's corporate tax rate of 36.1 per cent is one of the highest. However, the United States and Japan still have higher corporate tax rates at 40 per cent and 40.7 per cent respectively, KPMG says.

But value-added tax, or goods and services tax, rates in the EU countries average 19.5 per cent, compared with 14.2 per cent in Latin America and only 10.8 per cent in the Asia Pacific.

Canada's average federal GST is six per cent. Additionally, all provinces, except for Alberta, impose a form of GST or retail sales tax at rates ranging from six to 10 per cent on the sales of taxable goods and services.

[jdobbin]

I know how to spend my money better than the government does, and these tax cuts are welcome. I would have liked to see it go further, but that may be asking too much in a minority situation. Too many cuts to the lower income bracket will eventually skew the system too far. The upper rates need reduction as well.

The GST cut is catchy, and it fulfills a promise. Less ammo for the opposition. It was essientially a given. Plus people will enjoy the ease of calculating a 5% tax.

The GST was a political not an economic decision. The $5 billion in GST cuts would have been more suitable for a 5% reduction in the corporate tax rate.

Simpson's column in the Globe on Saturday.

http://ago.mobile.globeandmail.com/generat...6/cosimp27.html

Prime Minister Stephen Harper has a master's degree in economics. Finance Minister Jim Flaherty attended Princeton University, an elite U.S. Ivy League school. They are both well-educated, intelligent men.

How then to explain their support for a idea so demonstrably stupid that, had they defended the idea in an undergraduate term paper, they would have flunked the course.

The idea is to cut the goods and services tax from 7 per cent to 6, and then to 5 per cent. The first one-point drop, at a cost of about $5-billion, came in the Harper government's initial budget. The Speech from the Throne proclaims that the second point drop will be forthcoming, likely in the next budget.

Just how stupid is this idea? This week, The Globe and Mail's Report on Business asked 20 economists across Canada, and from across the political spectrum, about the wisdom of cutting the GST. Sixteen of 20 said it was a bad idea, two said it was irrelevant and two thought it sensible. Eighty per cent, therefore, denounced the idea; 10 per cent supported it. They read the Harper-Flaherty GST tax cut term paper and gave it an F.

The Organization for Economic Co-operation and Development recently rendered the same general verdict on tax policy. Said the OECD: Consumption taxes are the way to go, offset by lower personal and corporate taxes.

Why? Personal and corporate income tax cuts, as every economist knows, tend to stimulate savings and investment, which is what an economy needs to become more productive and competitive, thereby raising overall living standards. Lower consumption taxes stimulate more – wait for it – consumption, some of which leaks out of the economy in the form of purchasing imports and taking trips abroad.

If such a widespread consensus exists among economists across Canada and in the OECD, why are Messrs. Harper and Flaherty persisting with an idea they must know as economists to be stupid?

Answer? Politics, pure and simple. The GST cut is the triumph of base politics over sensible economics.

When the Harperites sat down to craft their last campaign document, they observed that the Liberals had in fact cut personal income taxes, but the public had not seen or appreciated those cuts. In fact, polls demonstrated that Canadians didn't even know their taxes had been reduced.

So the Harperites decided to give Canadians a tax cut they could see, feel and therefore appreciate at voting time; namely a reduction in the GST, whose creation by the Mulroney government had been attended with much political controversy.

A sensible government – or sensible opposition parties – would not only scrap the forthcoming reduction but reinstitute the previously cut point, and then add another. The result would be about $15-billion additional dollars for the federal government.

Edited October 31, 2007 by jdobbin

[geoffrey]

The GST was a political not an economic decision.

Sure, but it's a winner.

[mikedavid00]

A 50% corporate tax cut will make Canada competitive with the world, much of which has lower corporate rates than Canada.

I agree.

People don't know just how devistating these taxes are.

[jdobbin]

Sure, but it's a winner.

A 20% income tax cut could be a winner too.

[shavluk]

That's terrific that they are giving us some of our own money back and as I am Ukrainian Xmas just got cheaper what with it being on Jan 7th.

I guess they are as bad as the liberals at mismanaging our government income tax.

What with harper's comments when the liberals themselves had a big surplus,,,,

that they were poor managers.

Here are some pennies back because we collected an extra 14 billion by mistake,,hahhaha

Myself I would have given 5 billion to finance infrastructure repairs ,something sorely over looked year after year and left the gst in place at 6% so that I could put another 5 billion next year.

I would be clear with voters that the funds would go and support where they were meant to.

Sad when you consider they wasted much more than they gave us back ,,, just in Afghanistan.

[mikedavid00]

Sure, but it's a winner.

Are you kidding?

The 1% GST saves my household about $350 a year.

Take your gross household for the year, divide by 4, then multiply by .01.

That's how much money your household saves per year with the GST cut.

Another 1% will save me double.

The sales tax is increadibly important and should be obolished.

Same with corporate taxes.

Edited October 31, 2007 by mikedavid00