Flaherty speech today

[Wilber]

"most countries " have much more centralized economies and do not have regional sales taxes. The US is an exception, as most states have sales taxes.

I'm taking it up with you, since you posted this misleading information.

Again.

And the US doesn't have a federal sales tax or anything like the GST. Ah, Alaska, no sales tax or state income tax. Nice.

[Pat Coghlan]

Meanwhile, John Roth, former Nortel CEO, can take advantage of the pension-splitting provision introduced for '07 tax year, and shift $115,000 of his $750,000 pension to his wife and save $15,000 in taxes.

At the same time, the 35 year-old engineer supporting a wife and 3 kids on a $75,000 salary, sees very little difference in his family's after-tax income as a result of the changes announced yesterday, and still pays a few thousand more in taxes than his neighbours who have two $37,500 incomes.

The point is, this is simply a continuation of the 40 years of tinkering with the tax system/brackets.

Like, why bother, unless you're prepared to finally reform the tax system and introduced a joint tax return?

Edited October 31, 2007 by Pat Coghlan

[White Doors]

I don't see payroll taxes/EI premiums making much difference to many businesses, unless they employ low wage earners.

What does it matter if the rate is up or down ten cents, if your employee has already maxed out contributions by mid-year? The govt could make an immediate difference by both cutting the rate and dropping the employer contribution to say, $1500 per year.

They did drop the rate. That is what it is about. EI contributions is a % of earned income up to a ceiling amount. They dropped the amount contributed per earned income by the numbers I indicated.

I agree, a 10 cent absolute drop would not make much of a difference!

[jdobbin]

"most countries " have much more centralized economies and do not have regional sales taxes. The US is an exception, as most states have sales taxes.

I'm taking it up with you, since you posted this misleading information.

Again.

KPMG gives misleading information? This is the data that C.D. Howe and Fraser uses to make its assessments as well.

And even if you include provincial sales tax, Canada still has lower rates than many industrialized countries.

And once again let me say that a GST cut is a poor tax to cut compared to income taxes.

Edited October 31, 2007 by jdobbin

[jdobbin]

Pity. I was hoping...

Hoping to achieve what: a repeat of last election according to yesterday's poll?

[Michael Bluth]

The Liberal have a leader who responded to the budget in this form in the country's predominant language:

"Yes, we will be abstaining for the good sake of Canada. It is not a good declaration. It is not sending the country a good direction," Dion told reporters after a caucus meeting.

No wonder they are afraid to enter an election. The Conservatives are confident they can win a majority.

The Liberals are so afraid of an election they are abdicating their role as the Official Opposition. Shame on you Mr. Dion.

Or maybe I will say it in a way you can understand. You are bringing the shame to the Party Liberal of Canada.

Man, if only somebody would send me good directions.

[Higgly]

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.

Those waits and lack of accessibility to physicians are why I say put money into health care. Tommy Douglas lead the pack, and now we are hind dog.

You know how to spend your money because you have money. I doubt that you understand the financial implications of chronic disease.

[guyser]

. 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??

....speaking of propaganda....

[jdobbin]

As I suspected, the Liberals have put out the idea of rescinding the the GST cut if they are elected in favour of income tax cuts.

http://www.ctv.ca/servlet/ArticleNews/stor...1031?hub=Canada

Dion also said if he were elected he would consider rescinding GST cuts promised by the Conservatives in Tuesday's mini budget.

The Grit leader said many people believe the two percentage point cut to the goods and services tax was the wrong move. He said it amounts to $34 billion that the govenrment could spend elsewhere.

But he said an election campaign will not be fought anytime soon. Dion said the party is acting out of compassion for Canada in abstaining from today's confidence vote on the Tory government's mini budget.

Edited October 31, 2007 by jdobbin

[Michael Bluth]

Can anyone explain how abstaining from a tax cut that 'all economists' oppose and the Liberals would consider rescinding is being compassionate?

Dion said the party is acting out of compassion for Canada in abstaining from today's confidence vote on the Tory government's mini budget.

The only compassion he is showing is for the Liberal Party of Canada in avoiding it's decimation.

[old_bold&cold]

As I suspected, the Liberals have put out the idea of rescinding the the GST cut if they are elected in favour of income tax cuts.

http://www.ctv.ca/servlet/ArticleNews/stor...1031?hub=Canada

It really does not matter what Dion says, as he is a liberal first and fore most so for one thing Liberals never keep promises made unless it will some how pay them to do it. But the fact atht they lie about most promises aside, they do not have a snowballs chance in hell of forming a government in the next decade or so. If you think that is not true then have the Liberals bring the government down on the issue, and let the bloods sport of kicking a liberal begin. The liberals be the snivling cowards they have shown to be are quivering at the thought of even having to think the word ELECTION! that they hide and plan ways to abstain from voting, because they think it will look better

The Liberals have pretty much said it before about the GST, when they promised to delete it if they got in and 15 years later they still had it in place. So the fact that talk about deleting anythignto do about the GST is only going to bring back those sores and turn them to open wounds. Way to lead Dion! You just needa good cliff to come along and lead then all to do the right thing.

[jdobbin]

The Liberals have pretty much said it before about the GST, when they promised to delete it if they got in and 15 years later they still had it in place. So the fact that talk about deleting anythignto do about the GST is only going to bring back those sores and turn them to open wounds. Way to lead Dion! You just needa good cliff to come along and lead then all to do the right thing.

Is this sort of like how Harper said his government would never, ever get rid of income trusts?

[sharkman]

It really does not matter what Dion says, as he is a liberal first and fore most so for one thing Liberals never keep promises made unless it will some how pay them to do it. But the fact atht they lie about most promises aside, they do not have a snowballs chance in hell of forming a government in the next decade or so. If you think that is not true then have the Liberals bring the government down on the issue, and let the bloods sport of kicking a liberal begin. The liberals be the snivling cowards they have shown to be are quivering at the thought of even having to think the word ELECTION! that they hide and plan ways to abstain from voting, because they think it will look better

The Liberals have pretty much said it before about the GST, when they promised to delete it if they got in and 15 years later they still had it in place. So the fact that talk about deleting anythignto do about the GST is only going to bring back those sores and turn them to open wounds. Way to lead Dion! You just needa good cliff to come along and lead then all to do the right thing.

I hadn't thought of the GST promise, and all of the lies that followed. Probably most liberals don't mind how their party kept changing its promises regarding the GST. But I think Joe Canadian resents being lied to and is glad to see the GST coming down even if the Liberals try to make yet another promise with regard to the GST, that this time they'd increase it if they got voted in.

[capricorn]

I hadn't thought of the GST promise, and all of the lies that followed. Probably most liberals don't mind how their party kept changing its promises regarding the GST. But I think Joe Canadian resents being lied to and is glad to see the GST coming down even if the Liberals try to make yet another promise with regard to the GST, that this time they'd increase it if they got voted in.

Chretien and the Liberals said they would eliminate the GST. Now Dion says he will increase it. Is that what we call a flip-flop?

I read somewhere that when reporters asked Chretien about the promise to eliminate the GST, he replied "you should have read the fine print in the red book". I guess that's one time his training as a lawyer came in handy.

[Michael Bluth]

Chretien and the Liberals said they would eliminate the GST. Now Dion says he will increase it. Is that what we call a flip-flop?

Dion's got to pick a side on an issue. He will 'consider' raising the GST? wtf?

No way it gets raised. That is absolute suicide politics.

[Canuck E Stan]

The GST is the greatest example of a credibility chasm between "experts" and the people

Nothing makes my blood boil more than to see a parade of so-called experts trashing reductions to the Goods and Services Tax. Having endured the scars of that hated tax a, I welcome any move by any government to listen to the people.

Thank you Sheila.

[Guest trex]

How about some new spending initiatives besides the military. If we are doing so well financially as a nation, why not re-invest the in this country, for the betterment of the people. Isn't that what we are trying to do here, with Canada, with our government, to make a great place for us to live in peace and prosperity? One thing we all want to see improved is the health care system, as well as educational facilities and standards. The quality of these services has dropped substantially over the years, due to many successive deep cuts in funding by previous governments, in the name of "fiscal responsibility". Well Mr. Prime Minister, how about some responsibility back to the people now, you are holding our money and we pay you your salary.

[jdobbin]

Here is Greg Weston's take on the GST.

http://lfpress.ca/newsstand/News/Columnist...08/4639645.html

As a tax cut, for instance, the staggering $6 billion it will cost the treasury to reduce the GST to 5% would have been better spent on lowering income taxes.

But if not a tax cut, what about all those other worthy causes?

Aside from saving a few bucks on GST, here are a few other things we could do with $6 billion a year (in no particular order and with some generous approximations).

- For seniors: Almost double the guaranteed income supplement for the poorest pensioners, or increase old age security payments to all elderly Canadians by 25% -- immediately;

- For students: Give free post-secondary education -- including living expenses -- to more than 500,000 Canadian students per year, or wipe out all student loans;

- For working parents: Give all Canadian parents, regardless of financial status, access to the same $7-a-day subsidized daycare program currently offered in Quebec;

- For families: Quadruple the monthly universal child care benefit;

- For the disabled: Double the total amount of support the federal government provides to the 3.6 million Canadians with disabilities, including 180,000 kids and 1.5 million seniors, and the 23% of working-age disabled citizens who live in poverty.

- For the homeless: Provide over $9,000 a year in support, services and facilities for all of the 150,000 homeless Canadians, and the other 500,000 who spend more than half of their income on housing, otherwise known as the homeless-in-waiting.

- For poor families: Almost double the national child benefit supplement for low-income families, increasing support to more than $12,000 a year for a family with two children;

And more.

http://www.edmontonsun.com/Comment/2007/11...634339-sun.html

Figures compiled by Statistics Canada and the Canadian Taxpayers' Federation show that cutting personal income taxes instead of the GST would have put far more money in the pockets of all but the richest Canadian taxpayers.

For instance, consider an average family with each spouse earning $40,000 a year.

Based on StatsCan household spending figures, our sample family will save around $320 annually from the latest reduction in the GST.

But the same couple would have saved a whopping $1,103 a year if Canadian income taxes had been cut by the same amount it is costing to reduce the GST.

The only way they could save that much from a 1% cut in the federal sales tax is if they spent $110,300 a year on consumer goods -- $30,300 more than the family's combined gross annual income.

There is no magic in all this.

The 1% cut in the GST announced in last week's Conservative mini-budget will cost the treasury more than $6 billion a year in lost revenues.

That would have been more than enough to finance a full 2% reduction in the lowest personal income tax rate paid by all Canadians who file returns.

How do the two compare?

If you happen to be buying a brand new home, luxury car or dream yacht, odds are good you will be further ahead with the cut in the GST than a reduction in the base income tax rate.

But if you are like the vast majority of average working stiffs, shaving a point off the sales tax won't exactly leave you rolling in dough.

The reason is most of the big-ticket items in the standard family budget -- food, rent, taxes, pension contributions, mortgage and other loan payments -- are not subject to the GST, and therefore obviously not affected by a reduction in the sales tax rate.

MINIMAL SAVINGS

Subtract those exempt expenses from our sample $80,000-a-year household, and StatsCan estimates the 1% cut in the GST would apply to roughly $32,000 in remaining family expenditures, a saving of $320.

It doesn't get any better in the lower-income brackets.

A couple earning $60,000 a year -- one $40,000, the other $20,000 -- would save about $760 a year from a two-point cut in the base income tax rate.

But again according to StatsCan's average spending figures, the same couple will be lucky to save $275 from the GST cut.

And so it goes down the income ladder.

At $25,000, an income-tax cut yields $308; a GST cut, less than $100.

All of which was not lost on the political strategists around the prime minister.

[geoffrey]

I don't want more spending. Weston's ideas are all about more ridiculous transfers to individuals that by and large shouldn't get them (students, seniors, ect). It's not the government's money to handout. They collect billions extra to what they plan to spend. It's time to have that returned to those that pay it. I don't write a blank cheque to the government, I expect them to write a budget and stick to it. Extra-program spending is completely absurd and unacceptable for a government.

[jdobbin]

I don't want more spending. Weston's ideas are all about more ridiculous transfers to individuals that by and large shouldn't get them (students, seniors, ect). It's not the government's money to handout. They collect billions extra to what they plan to spend. It's time to have that returned to those that pay it. I don't write a blank cheque to the government, I expect them to write a budget and stick to it. Extra-program spending is completely absurd and unacceptable for a government.

It wasn't the only thing he wrote about. He wrote on how an income tax would have been better than a GST cut.

[geoffrey]

It wasn't the only thing he wrote about. He wrote on how an income tax would have been better than a GST cut.

Believe it or not (if you read academic lit and some MSM stuff), there is two sides to that argument. The CBC won't tell you that, but there is. There are ways of proving incentives to invest other than income tax cuts and consumption tax hikes (RRSPs are one... it turns Income tax into a VAT).

The bottom line is that we have $6b more. I don't think it matters in what form it comes as long as it does.

[jdobbin]

Believe it or not (if you read academic lit and some MSM stuff), there is two sides to that argument. The CBC won't tell you that, but there is. There are ways of proving incentives to invest other than income tax cuts and consumption tax hikes (RRSPs are one... it turns Income tax into a VAT).

The bottom line is that we have $6b more. I don't think it matters in what form it comes as long as it does.

I don't need the CBC to tell me that I would have done better with an income tax cut.

Tell me how much GST do you save from shopping in the U.S.?

Edited November 9, 2007 by jdobbin

[geoffrey]

Tell me how much GST do you save from shopping in the U.S.?

None. Customs charges it when I import anything on top of any duty.

I really don't think you'd have done better Dobbin. Consumers saved $6b. I tend to believe that your making decent cash, neither of us is likely consuming less GST applicable goods than the average. Meaning we're getting more of a share of that $6b.

[jdobbin]

None. Customs charges it when I import anything on top of any duty.

I really don't think you'd have done better Dobbin. Consumers saved $6b. I tend to believe that your making decent cash, neither of us is likely consuming less GST applicable goods than the average. Meaning we're getting more of a share of that $6b.

By my calculation, the GST saves me just over $300, perhaps $400.

I would save over $1000 and maybe up to $1500 with an income tax cut. That is just my calculations for me personally.

[geoffrey]

By my calculation, the GST saves me just over $300, perhaps $400.

I save in the ballpark of the same on normal spending. If I buy a new house, which I may soon, it would benefit me. It would be a second property (I'd rent out my condo), so GST affects this.

What's your car worth Dobbin? $100 savings per $10,000 in car cost. A $30,000 car adds $300 to that GST savings, perhaps spread over 3 years.

It all adds up.

Eliminating all GST on house purchases would be a big step towards having young people get into ownership faster. It would also lower rental costs indirectly.

I would save over $1000 and maybe up to $1500 with an income tax cut. That is just my calculations for me personally.

What are you proposing? A 5% Income tax cut? That would save you $1,500. I personally think that a 5% cut to the lowest rate would require cuts to the upper brackets as well.

I haven't looked at the numbers either, but I figure a 5% Income tax cut would be way more costly than a 1% GST cut.

Edited November 9, 2007 by geoffrey