Does anyone think that cutting the GST was a good idea?

[ThatGuy]

In my opinion, it was a horrible ecnomic decision. Other than to gain votes, there is virtually no benefit to the country in cutting a consumption tax, especially at a point in time where it was vitally necessry. Billions were removed from the coffers.

Many people will argue that we are overtaxed and that is a Liberal creation, but, wouldn't the economy have had a better impact from a small slice to income tax?

When it comes to consumption taxes like the GST, those with the most money to spend would see a bump in savings. Well, when on one is willing to spend, how exactly does it help? I mean, I could care less if my Tim Horton's cup of coffee cost me 2-3 more cents.

[M.Dancer]

All consumption taxes hurt those least likely to afford it.

Ask someone on a fixed income if they like paying an extra 15% for a winter coat.

[madmax]

All consumption taxes hurt those least likely to afford it.

Ask someone on a fixed income if they like paying an extra 15% for a winter coat.

Ok M.Dancer I will bite. I have three questions for you.

Were you for the creation of the GST?

Do you believe in Income tax cuts over cuts to the GST?

Would you favour the elimination of the Regressive GST?

I have my helmet and flak jacket r......eady for return fire.

[ThatGuy]

I will watch your back MadMax

[M.Dancer]

1)Were you for the creation of the GST?

2)Do you believe in Income tax cuts over cuts to the GST?

3)Would you favour the elimination of the Regressive GST?

1) No

2) Prefer both, but you can only cut a low income earners taxes to zero, they still will pay sales taxes on everything they need...

3) Don't know what "regressive GST" is.

[madmax]

I will watch your back MadMax

Thanks.

Been feeling the heat here, and at babble. Warnings no bannings yet ...

[ThatGuy]

I got a warning once.

They said my quotes were too big?

[August1991]

When it comes to consumption taxes like the GST, those with the most money to spend would see a bump in savings. Well, when on one is willing to spend, how exactly does it help? I mean, I could care less if my Tim Horton's cup of coffee cost me 2-3 more cents.

About 35% of adult Canadians pay no income tax at all because their income is below thresholds. What good is an income tax cut to them? With a GST cut, at least they get something.

In fact though, this approach misses two major points. A tax should also be measured by its effects on people's behaviour and by how easy it is to collect. On this score, the GST is arguably better than an income tax.

-----

Taxes exist in a political world. The Liberals (and Jean Chretien in particular) have decried the GST ever since Mulroney introduced it to eliminate the MST. Chretien promised on several occasions to get rid of the GST. He never did.

Harper promised to reduce the GST and then he did it.

Canadians are used to politicians who lie, make promises and then never keep them. We are cynical of the political process. In one very visible way, Harper kept an important promise. On this point alone, he enjoys credibility that many Liberal politicians simply do not have.

Edited December 3, 2008 by August1991

[madmax]

1) No

2) Prefer both, but you can only cut a low income earners taxes to zero, they still will pay sales taxes on everything they need...

3) Don't know what "regressive GST" is.

He looks up, sees no enemy and sighs. Then takes a shot... Nothing like friendly fire to lighten the mood.

Seriously, your answers are similar to what mine would be.

With regards to "regressive" GST, it is means exactly what you described for an example.

All consumption taxes hurt those least likely to afford it.

Ask someone on a fixed income if they like paying an extra 15% for a winter coat.

Will have to mix it up in another thread.

[ToadBrother]

In my opinion, it was a horrible ecnomic decision. Other than to gain votes, there is virtually no benefit to the country in cutting a consumption tax, especially at a point in time where it was vitally necessry. Billions were removed from the coffers.

Many people will argue that we are overtaxed and that is a Liberal creation, but, wouldn't the economy have had a better impact from a small slice to income tax?

Who the hell says it's a Liberal creation? It was Brian Mulroney that brought in the GST.

When it comes to consumption taxes like the GST, those with the most money to spend would see a bump in savings. Well, when on one is willing to spend, how exactly does it help? I mean, I could care less if my Tim Horton's cup of coffee cost me 2-3 more cents.

At least some economists seem to think that in many ways consumption taxes are superior to income taxes.

Edited December 3, 2008 by ToadBrother

[ThatGuy]

Harper lived up to his promise on that issue. My idea is that the cut did nothing more than erase some much needed stimulus. That could be in hindsight, but it is the case right now.

As for poorer Canadians, if they aren't paying income tax, what are they saving per year from an across the board GST cut? We lose far more as a nation than they save. Staples aren't taxed anyway.

One guy called in and said he could buy an extra case of beer a year.

Edited December 3, 2008 by ThatGuy

[madmax]

In my opinion, it was a horrible ecnomic decision. Other than to gain votes, there is virtually no benefit to the country in cutting a consumption tax, especially at a point in time where it was vitally necessry. Billions were removed from the coffers.

Many people will argue that we are overtaxed and that is a Liberal creation, but, wouldn't the economy have had a better impact from a small slice to income tax?

When it comes to consumption taxes like the GST, those with the most money to spend would see a bump in savings. Well, when on one is willing to spend, how exactly does it help? I mean, I could care less if my Tim Horton's cup of coffee cost me 2-3 more cents.

The problem with the 2 Cent cut, is that it has little effect on everyday life of many Canadians. The biggest savings would come from buying a big ticket item like a Car. But other then that the effect has been to lower government coffers. A government that was dependent upon money generated from Consumption.

The GST/Income tax debate is one between LPC and CPC, and it is debateable which generates more spending for an average Canadian.

The problem with the GST is that when the economy shrinks so does government revenues, which are dependant upon the tax to provide services. So just when you need it most, the money isn't there.

The GST provided more money then the FST and was designed to take advantage of the FTA and reduce taxes on Industry, and shift it to the consumer. With Industry moving regardless of the tax break, there may be less reason to justify the GST and the extra burden it places upon the poor, many who would see no benefit from an income tax break.

Your on "That Guy"

[ThatGuy]

Who the hell says it's a Liberal creation?

I don't think it is, but, from what you read and hear on the radio, many people do. It is unfortunate.

They would much rather blame Chretien for not lowering it than Mulroney for creating it.

[M.Dancer]

With regards to "regressive" GST, it is means exactly what you described for an example.

Oh...in that case, I am in favour of eliminating the GST and the Provincial sales tax...especially at Christmas....

What a needed boost to the economy it would provide if you had an extra 15% in your pocket

[ThatGuy]

At least some economists seem to think that in many ways consumption taxes are superior to income taxes.

Could very well be. But, in this particular case, those getting the greatest pleasure out of the GST cut aren't the middle-lower class.

We aren't going to save enough money to fire enough back into the economy in order to 'stimulate' it. We will stimulate our savings accounts a little if anything.

Who wants to save a few cents here and there while they lose their job? It would have been nicer to have the extra tax bounce to put into credit fluidity for example.

[ThatGuy]

Oh...in that case, I am in favour of eliminating the GST and the Provincial sales tax...especially at Christmas....

What a needed boost to the economy it would provide if you had an extra 15% in your pocket

If I had an extra 15% in my pocket it would be going into my savings account to ride out the storm. I have nothing I want to buy with it either. I would assume many Canadians would do the same. What happens then?

If you saved $150 on $1000 of purchases, are you going to quickly spend that saved $150 on something else right now?

[noahbody]

The problem with the 2 Cent cut, is that it has little effect on everyday life of many Canadians. The biggest savings would come from buying a big ticket item like a Car.

So what you're saying is that it's a stimulus for the auto industry. And that's not needed.

[ThatGuy]

With Industry moving regardless of the tax break, there may be less reason to justify the GST and the extra burden it places upon the poor, many who would see no benefit from an income tax break.

Ok, I can live with that assessment of the poor and the income tax break. I guess it just comes back to my thinking that the poor aren't going to see much in terms of GST savings due to their low spending power. But, they could see somewhat of a bump in terms of keeping lower end jobs via the business benefit from credit fluidity and some form of financial barrier against the crisis we are in.

[M.Dancer]

If I had an extra 15% in my pocket it would be going into my savings account to ride out the storm. I have nothing I want to buy with it either. I would assume many Canadians would do the same. What happens then?

If you saved $150 on $1000 of purchases, are you going to quickly spend that saved $150 on something else right now?

Definately. It's christmas, it's winter, I have kids and their feets won't stop growing...

[ThatGuy]

So what you're saying is that it's a stimulus for the auto industry. And that's not needed.

If someone has enough money to go buy a car right now, they could afford to pay 15%*

*former Ontario PST + GST rate.

[ThatGuy]

Definately. It's christmas, it's winter, I have kids and their feets won't stop growing...

Ya, but it is Christmas, you will spend the money anyway. What happens on January 1st when the economy is still in trouble?

[M.Dancer]

Ya, but it is Christmas, you will spend the money anyway. What happens on January 1st when the economy is still in trouble?

Will theeconomy be in trouble by then? I repeat, the last quarter saw growth....and if it is, then everyone could use an extra 15% in their pockets....after all, the only way to stimulate an economy is to spend...

[M.Dancer]

If someone has enough money to go buy a car right now, they could afford to pay 15%*

*former Ontario PST + GST rate.

That quite the supposition given that most cars are financed..meaning exactly, they don't have enough money...

[noahbody]

If someone has enough money to go buy a car right now, they could afford to pay 15%*

*former Ontario PST + GST rate.

Further to Dancer's reply, do you think it's better to have a stimulus at the consumer level, which benefits the consumer, dealer and the manufacturer or a plan that gives money directly to the top? Also, if billions had been given to the auto industry a year ago, what do you think would have changed?

[blueblood]

Further to Dancer's reply, do you think it's better to have a stimulus at the consumer level, which benefits the consumer, dealer and the manufacturer or a plan that gives money directly to the top? Also, if billions had been given to the auto industry a year ago, what do you think would have changed?

That "stimulus" to the auto industry reeks of the "stimulus" that happened to the cattle industry in 03, spraying money around like a fire hose and nothing getting done.