Dion to "Re-visit" GST Tax Cut if Elected

[betsy]

So, he is going to bring back what Harper had taken away.

His election campaign will be, "Vote Liberal and I promise to raise the GST Tax again!"

Liberal MPs' jaws must've dropped when Dion delivered his bombshell.

According to Duffy, there's rumor of a coup to happen before Christmas.

[Michael Bluth]

Liberal MPs' jaws must've dropped when Dion delivered his bombshell.

According to Duffy, there's rumor of a coup to happen before Christmas.

Hmm, the Liberals are finally strating to make sense.

Is that a good or a bad thing?

[sharkman]

That Dion is a real knee slapper, eh? Dollars to donuts within a couple days he will 'explain' what he really means, which will involve much in the way of back-pedalling. This alone ought to be worth a 2 point drop in the next poll.

[capricorn]

His election campaign will be, "Vote Liberal and I promise to raise the GST Tax again!"

When Chretien flip-flopped about eliminating the hated GST, he said he could not cut it because he needed the revenues to attack the deficit left by the previous government. Dion won't be able to use that excuse against the Conservatives, will he? So how will he explain to Canadians why he needs the GST revenue in an election campaign?

Liberal MPs' jaws must've dropped when Dion delivered his bombshell.

You mean he didn't consult his caucus?

According to Duffy, there's rumor of a coup to happen before Christmas.

If there's a coup, it will be another one by the Conservatives.

[Shakeyhands]

did you guys read the whole article or did we stop after the title?

Dion told reporters he would open a debate on the idea during an election campaign. When asked by reporters whether he would reverse the tax cuts, Dion responded: "We will consider that."

Dion made the comments a day after Finance Minister Jim Flaherty unveiled a mini-budget that outlined $60 billion in cuts to personal and corporate taxes as well as a one percentage point cut to the GST.

Dion said the money from the two per cent cut to the GST — which includes a one percentage point cut implemented in 2006 — could have been spent in other areas or put into different types of tax cuts.

"That [the proposed GST cut] means $6 billion, $7 billion every year, on an ill-advised choice," Dion said.

http://www.cbc.ca/canada/story/2007/10/31/...et.html?ref=rss

Having said that... bring on the coup

[Michael Bluth]

did you guys read the whole article or did we stop after the title?

Having said that... bring on the coup

Actually I did. All of the responses here seem to be in line with the contents of the article.

[capricorn]

did you guys read the whole article or did we stop after the title?

http://www.cbc.ca/canada/story/2007/10/31/...et.html?ref=rss

Having said that... bring on the coup

shakey, there was no article linked in the op. I had already read said article in full.

And yes, bring on the coup! A Christmas gift so to speak.

Edited November 1, 2007 by capricorn

[Michael Bluth]

And yes, bring on the coup! A Christmas gift so to speak.

Good edit. Didn't make sense at first.

In a large sense a gift to almost all Canadians.

A coup would take months and months to unfold, in a better case scenario for the Liberals.

Worst case it could be almost two years of battering Dion's leadership while he hangs on until the October 09 election.

The only people a coup doesn't help are the members of leadership factions within the Liberal Party of Canada.

[capricorn]

Good edit. Didn't make sense at first.

I've made it a life long quest to catch my own bloopers.

The only people a coup doesn't help are the members of leadership factions within the Liberal Party of Canada.

They're working on their own coup against Dion, so they won't see Harper's coming.

[betsy]

did you guys read the whole article or did we stop after the title?

http://www.cbc.ca/canada/story/2007/10/31/...et.html?ref=rss

Having said that... bring on the coup

Duffy ran the tape of the interview again (after a Liberal strategist flatly denied that the GST wouldn't be cut and tried to spin it). On the tape, Dion explicitly stated that he would revisit the GST tax cut. That's how Duffy and the journalist-pundits understood it and that was how they discussed it. It was clear.

I think I'd rely more on the tape rather that a newspaper clip.

Edited November 1, 2007 by betsy

[Shakeyhands]

Duffy ran the tape of the interview again (after a Liberal strategist flatly denied that the GST wouldn't be cut and tried to spin it). On the tape, Dion explicitly stated that he would revisit the GST tax cut. That's how Duffy and the journalist-pundits understood it and that was how they discussed it. It was clear.

I think I'd rely more on the tape rather that a newspaper clip.

Dion told reporters he would open a debate on the idea during an election campaign. When asked by reporters whether he would reverse the tax cuts, Dion responded: "We will consider that."

seems pretty clear to me, but then again I'm not looking for negatives.

Edited November 1, 2007 by Shakeyhands

[Michael Bluth]

seems pretty clear to me, but then again I'm not looking for negatives.

That's not what the aide said shakey.

Not looking for negatives? When talking about the Liberal Party of Canada that is.

[mikedavid00]

So, he is going to bring back what Harper had taken away.

His election campaign will be, "Vote Liberal and I promise to raise the GST Tax again!"

Liberal MPs' jaws must've dropped when Dion delivered his bombshell.

According to Duffy, there's rumor of a coup to happen before Christmas.

I agree.

That was one of the dumbest thing I've ever heard a political leader say (beside funding of 'faith based schools').

[Shakeyhands]

That's not what the aide said shakey.

Not looking for negatives? When talking about the Liberal Party of Canada that is.

No, thats what Dion said.

As to your second point.... Duh...

[Amazing Atheist]

I personally don't have a problem with this at all.

Harper has adopted the republican way of conducting business. Lower taxes and increase spending.... Not very conservative IMO

For example he just spent hundreds of millions on tanks for our military which I am not necessarily opposed to but this being said big spending like this as well as other big purchases etc and scandalous behavior it is certainly not the time to be lowering taxes.

Taxes pay the bills..

I hope people this time vote on a parties environmental platform as the single most important issue in the world today and Canada as opposed to who lowers taxes the most.

[Michael Bluth]

Harper has adopted the republican way of conducting business. Lower taxes and increase spending.... Not very conservative IMO

In which areas was spending increased in the fiscal update?

Nice mention of the US apropos of nothing. Did an American kid beat you up on the way to school every day when you were young?

[Shakeyhands]

he's pointing out that the conservative are like the Republicans, not conservative. How is that linked to anything remotely anti american?

[Michael Bluth]

he's pointing out that the conservative are like the Republicans, not conservative. How is that linked to anything remotely anti american?

The fiscal update didn't reflect what he attributed to the Republicans. What was the relevance to the debate?

[Shakeyhands]

Nice mention of the US apropos of nothing. Did an American kid beat you up on the way to school every day when you were young?

my comment was derived from this gem. Nothing to do with fiscal anything. Knee jerk response from an american apologist I guess eh?

[Higgly]

ROBTV, our very own (and very good) business channel is saying that economists would rather see cuts to income and corporate taxes, which are disencentives to earn. Consumption taxes like the GST are discretionary, sort of like the lottery, and are much better at providing an incentive to the government to make the economy run well so everybody has loose cash jingling their pockets. A system which leans on consumption tax also favours saving, and the poor.

You want blue line seat to see Leafs lose, mistah? Cost you extra.

Edited November 1, 2007 by Higgly

[August1991]

ROBTV, our very own (and very good) business channel is saying that economists would rather see cuts to income and corporate taxes, which are disencentives to earn. Consumption taxes like the GST are discretionary, sort of like the lottery, and are much better at providing an incentive to the government to make the economy run well so everybody has loose cash jingling their pockets. A system which leans on consumption tax also favours saving, and the poor.

Income tax with RRSPs achieves the same goal as the GST. In both cases, we tax consumption (and not savings). IOW, we tax money when it is spent and not when is it earned.

The income tax plus RRSP method has the advantage of being easily progressive. The GST requires a rebate system to be progressive. (Progressive in the sense that higher earners pay a higher percentage of tax than low earners.) Note too that the GST does not apply to food and rent - two relatively large expenditures of poor people.

IMV, the true advantage of the GST is that once implemented, it is easier to collect. With the GST, the tax authorities have fewer people to deal with than with an income tax. Several hundred thousand businesses in the case of the GST vs. several million people in the case of income tax.

All things considered, I'm going to agree with Dioon on this. He was right to say that at some time in the future, we may see the GST rise to 10% or 15%. At the same time, we would see a cut or even an elimination of income tax. (BTW, European countries have VAT that typically varies between 20% and 35%.)

----

Harper chose to cut the GST because it was a sharp political move. The Liberals and NDP had so often criticized teh GST and yet had done nothing about it. Harper did something. He delivered.

With that said, it is ironic that a Liberal now defends the GST. That point is the subject of this thread.

[Michael Bluth]

With that said, it is ironic that a Liberal now defends the GST. That point is the subject of this thread.

How high will Stephane go? 11%? 12%? 13%?

There has to be a point where revenue from the GST could make personal income tax unnecessary.

[August1991]

How high will Stephane go? 11%? 12%? 13%?

There has to be a point where revenue from the GST could make personal income tax unnecessary.

Exactly.

I think Dion is being intellectually honest - if he's not being politically astute.

IMV, the federal government would be wise to rely far more on the GST and then have an income tax only for the top 20%, say, of income earners. There is much evidence that plain vanilla consumption taxes such as VAT or GST are better for economic growth. In theory, consumption taxes avoid a major distortion of an income tax. (Bermuda for example has only VAT and no income tax. In Ireland, often described as a "smart tax" country, VAT is 21%.)

Our tax regime exists in a political world however. For example, the US does not have a federal VAT and hence such a tax in (English) Canada is difficult politically to implement. For purely political reasons, the Liberals first opposed the GST. For purely political reasons, Harper promised to cut it by 2% in his first mandate.

Nevertheless, the GST is a good tax - even better than the income tax - in terms of how little damage it does to the economy while raising revenue for the government.

I supported Harper's decision to cut the GST simply because so few people believe politicians any more. On this one major, extremely visible point, Harper has earned tremendous credibility. He said he would do it and he did. Every time we buy something, the evidence is there for us to see.

Incidentally, this situation is due in part to Mulroney, Michael Wilson and David Dodge (now of the Bank of Canada). They decided, in their wisdom, that the GST would be a visible tax at every purchase. They chose this for political reasons. (If the GST was included in the price as it is in Europe and as the old MST was, future (Liberal) governments would be tempted to raise it.) There is also a constitutional argument that the federal government cannot impose such hidden taxes.

Anyway, in Europe, the advertised price includes VAT whereas in Canada, GST is added at the cash register. GST is visible. Harper used this fact to make apolitical point.

If Dion were more politically astute and less honest, he would say nothing about the GST at all.

Edited November 2, 2007 by August1991

[ScottSA]

I supported Harper's decision to cut the GST simply because so few people believe politicians any more. On this one major, extremely visible point, Harper has earned tremendous credibility. He said he would do it and he did. Every time we buy something, the evidence is there for us to see.

That's the crux. The Liberals variously promised to cut it, scrap it, and pay down the debt with it, and each time things became "too complicated" to follow through; the complication apparently being a majority mandate and a few more years for the electorate to forget. Even if the Tories had kept a couple of their promises, they'd be head and shoulders above the Libs, but instead, for the first time in well over a decade, a political party has actually kept most of its promises. During a minority government, yet.