Harper's Best Fiscal Stimulus Package: Cut Taxes

[Alta4ever]

There are only two shareholders for my company - the wife and me. But, the number of shareholders is not relevant to the discussion at hand.

You really should get financial advice -- you need it if you believe the nonsense that you have put in this thread.

Are you farming? I'm just curious and tring to get a bead on what is going on in this thread.

[blueblood]

There are only two shareholders for my company - the wife and me. But, the number of shareholders is not relevant to the discussion at hand.

You really should get financial advice -- you need it if you believe the nonsense that you have put in this thread.

Still in the black, must be doing something right.

If you like paying more taxes, have at it. I'll enjoy my savings on my truck, sled, quad, and GPS etc.

[blueblood]

Are you farming? I'm just curious and tring to get a bead on what is going on in this thread.

I'm for lower taxes and lower GST, he is for stimulus spending.

[msj]

Still in the black, must be doing something right.

If you like paying more taxes, have at it. I'll enjoy my savings on my truck, sled, quad, and GPS etc.

I like lower taxes just fine.

That's why I am incorporated and have retained earnings in my corporation - I would rather pay 13.5% in taxes in my corporation than 25% or 30% or 43.7% personally.

What that means is that in order for you to save your precious 2% on your GPS you first have to pay your marginal income tax rate on the income you draw from your company.

Sure, if you spend all of your income on GST taxable stuff then you're saving taxes as compared to getting an income tax cut.

But, if you're like me and have savings and spend money on non-taxable items (such as groceries, used residential home, etc) then an income tax cut would have been much nicer than a GST cut - better to save tax in the first place and then choose to pay GST when you decide to buy something.

[Alta4ever]

I'm for lower taxes and lower GST, he is for stimulus spending.

I asked because I know that you do, and the tax implications to a farm are a far different thing then they are to a small business, they are very different when it comes to financial planning.

[capricorn]

I'm sorry, did you conduct a poll on the matter? You do not equal everyone. The people want tax cuts and spending, but they don't want either to be too much for us to handle.

Speaking of polls and the preferences of the people, in a Jan 12-14 poll Canadians were presented with budget options and graded them as follows:

Out of the 10 choices, a GST cut ranked ninth:

1. invest in infrastructure construction -- especially transit, roads and highways: 54 per cent

2. cut personal income taxes: 39 per cent

3. invest in training programs: 34 per cent

4. make the economy more competitive and productive in the long term: 28 per cent

5. cut federal government spending: 27 per cent

6. ensure private sector pension plans are able to pay out full pensions: 25 per cent

7. provide major financial aid to important sectors such as the auto sector, manufacturing and the forestry sector: 25 per cent

8. increase unemployment benefits : 18 per cent

9. cut the GST by a further percentage point: 11 per cent

10. offer one-time $400 tax rebate: 8 per cent

http://www.ctv.ca/servlet/ArticleNews/stor...16?hub=Politics

In a poll taken Jan. 20-22, 57% of Canadians said they want the budget to pass.

"People want the budget to pass because they're generally in tune with what the government is going to try to do with the deficit - they're not shocked by it," said Darrell Bricker, CEO of Ipsos Reid Public Affairs.

http://www.canada.com/topics/news/national...html?id=1220069

The inevitable conclusion is that Canadians know that the budget deficit will be huge and they know the budget will contain both their preferred options: infrastructure spending and tax cuts. They want the kind of budget Harper has been floating and that includes tax cuts for the middle class.

[Smallc]

They want the kind of budget Harper has been floating and that includes tax cuts for the middle class.

They don't however want a structural deficit. I hope for all of our sakes that the cuts are not all that large.

[cybercoma]

Call me crazy, but I'm not feeling the whole cut taxes and increase spending vibe they've got goin on here.

[capricorn]

They don't however want a structural deficit.

small c, do you think the majority of Canadians know the meaning of a structural deficit? However, they do know about deficits in general. Imagine a pollster asking the question "if tax cuts lead to a structural deficit would you still favour tax cuts?". And pollsters certainly don't have the time or inclination to define a structural deficit in a telephone survey. So I believe that the issue of structural deficit never enters the mind of the majority of Canadians when they are asked if they favour tax cuts as an economic stimulus.

[Smallc]

small c, do you think the majority of Canadians know the meaning of a structural deficit?.

Maybe not in those words, but I think they get the general idea.

Edited January 27, 2009 by Smallc

[capricorn]

Maybe so....

[msj]

Are you farming? I'm just curious and tring to get a bead on what is going on in this thread.

Public accounting - tax and audit.

Which is why I know what I know about taxation.

[msj]

Found this article about tax cuts/spending initiatives and the US economy (although the OECD also is in there).

One would have to read many of the links in the article (I have) and understand what kind of crisis we are facing to understand why targeted spending is better right now as opposed to targeted tax cuts (at least in the US).

Budget Surplus? Tax Cut! Budget Deficit? Tax Cut! High Energy Prices? Tax Cut! Deep Recession? More Tax Cuts!

One last point. I do agree that the "wrong" kind of government intervention can make the recession worse (Limbaugh channeling Cole and Ohanian; see a critique here). But I think the "wrong" kind of interventions include a slavish devotion to tax cuts -- especially when the MPC [3] could be argued to be low in the aggregate (although I still believe it would be relative high for liquidity constrained households). This last figure shows how the relationship between the growth rate of consumption and the growth rate of personal income (both in real terms) has changed in the last year, as compared to the entire 1967-08 period.