Ignatieff flip-flops on tax cuts

[Molly]

GST cuts would have a zero effect on my spending.

You are optimistic, figuring that this recession will be short. I hope you are right, but doubt it.

In the mean time, it's never a bad time to invest in infrastructure.

[Moonbox]

GST cuts would have a zero effect on my spending.

Don't be silly. A GST cut will ONLY affect your spending. You might not consciously decide to spend more, but after a purchase you'll have more money in your wallet. It's better than cutting you an income tax rebate and letting you squirrel it away.

You are optimistic, figuring that this recession will be short. I hope you are right, but doubt it.

I am optimistic but I'm basing this on about 60 years of economic history. Providing the recession doesn't end up as a Depression, we'll be on our way back up by 2010. If it's as bad as you think then we're f'd either way.

In the mean time, it's never a bad time to invest in infrastructure.

To an extent I agree. Investing in transportation, energy and utilities is probably a good idea. Dubious projects of the artistic and social nature, however, are best to be avoided right now IMO.

[bush_cheney2004]

.... If he had meant 'Middle Class' he would have said medium and upper; not lower and medium. A 2007 U.S. report stated that medium income was between $47,000 and $52, 000 per year.

For Canada or the United States.....you guys are comparing oranges and apples across the board. Try Stats Canada!

[capricorn]

I think a tax cut is not very high up with Canadians. People are much more cautious about the deficit than the government seems to be.

On the whole, Canadians are not economists although their views are important for politicians to gauge. But in reviewing the opinions of economists, it appears a consensus is emerging that at this time tax cuts will not provide the stimulus necessary to revitalize the economy. It seems they are more prone to advocating lowering consumption taxes instead, especially to encourage the purchase of big ticket items.

I said earlier if you are going to make a tax cut, make it temporary.

What politicians have to mull over is that a temporary tax cut means that taxes must be raised at some future date. Again, do politicians have the fortitude and breadth of thought to go down that road?

[capricorn]

GST cuts are the only thing that are going to encourage spending.

It seems this is an option gaining popularity. What about provincial sales tax? Shaving both by 2% would spur a lot of purchasing, especially expensive goods, and leave more money in the pockets of Canadians.

[Molly]

"but after a purchase you'll have more money in your pocket."

If I spend my money, I'll have less, not more, in my wallet..... (Pa dump bump)

When I said it wouldn't effect my spending, I meant it. If it makes $50 difference over the course of a year, then there will just be $50 more in my savings account than there would have been-- and that is a fact. Whether that is true of others, I can't say, but I am aware of my own spending habits.

Behind the scenes paperwork has little to do with a decision to spend or save (a pittance of) cash anyway. I fail to see any logic that GST not collected would be any more likely to be spent than income tax not collected.

[KeyStone]

So what I get out of all this crap you spew is that you think that you and government know better then me what I should spend my money on?

Correct. I think that collective central planning will serve the overall interests of the people of Canada better than individuals acting independently of eachother.

I know better then government, you know why the Big three are in so much trouble a failing business model, and more and more people like myself who do and will not support CAW and choose to by Toyota, or Nissan instead of supporting bad corporate decsions by the domestic car companies and the overly power union that is playing a huge role in destorying them. No thanks, I rather see my money go to china Japan or mexico. I want them to go through chapter 11, it will void a lot of over paid union contracts, and get rid of the current management in these companies.

Good for you.

You want to encourage home buying what did that sort of program do to the lending companies in the states? Do you recall the melt down caused by people getting morgages that can't afford them? It just happened in september. Our Banking system is currently ranked best in the world, do what you suggest would put us in the same situation as the US are in now. You sound as idiotic as Barney Frank.

Really? Well considering that you don't even know what I am proposing, I would say that you don't really know.

Programs that encourage home-buying <> Let's force banks to lend to people with bad credit.

<> means does not equal, in case you were getting confused.

[jdobbin]

On the whole, Canadians are not economists although their views are important for politicians to gauge. But in reviewing the opinions of economists, it appears a consensus is emerging that at this time tax cuts will not provide the stimulus necessary to revitalize the economy. It seems they are more prone to advocating lowering consumption taxes instead, especially to encourage the purchase of big ticket items.

There are a few economists quoting Keynes right now about how people may take their tax savings and pay off debt. Good for them personally but so good for the overall economy,

What politicians have to mull over is that a temporary tax cut means that taxes must be raised at some future date. Again, do politicians have the fortitude and breadth of thought to go down that road?

They do seem to have the fortitude to let the deficit rise into the future.

[capricorn]

There are a few economists quoting Keynes right now about how people may take their tax savings and pay off debt. Good for them personally but so good for the overall economy,

I don't know.

But by paying off debt, wouldn't the financial institutions have more money available to extend loans to others? Also, wouldn't those who pay down debt end up with more disposable income thereby increasing their purchasing power? As one who used to pretty well live on credit (I learned my lesson a long time ago ), getting out of debt certainly has positive outcomes.

They do seem to have the fortitude to let the deficit rise into the future.

I have not read anything from anyone that says a deficit is avoidable in this economic climate. To the contrary, experts are saying a deficit is inevitable during this economic crisis. Looks like this line of thinking may let politicians off the hook.

[jdobbin]

I don't know.

But by paying off debt, wouldn't the financial institutions have more money available to extend loans to others? Also, wouldn't those who pay down debt end up with more disposable income thereby increasing their purchasing power? As one who used to pretty well live on credit (I learned my lesson a long time ago ), getting out of debt certainly has positive outcomes.

The Paradox of Thrift doesn't just refer to individuals but companies as well. Companies hoard cash as well and pay off debt.

I have not read anything from anyone that says a deficit is avoidable in this economic climate. To the contrary, experts are saying a deficit is inevitable during this economic crisis. Looks like this line of thinking may let politicians off the hook.

At this point, I agree. I worry about 10 to 20 years of deficits because of the lack of courage.

[Progressive Tory]

The timing of any infrastructure spending is WAY off now. Infrastructure spending needed to start like 6 months ago to have any effect on the recession. By the time contracts bids are accepted and work starts we're already going to be out of the recession. Infrastructure spending takes forever to take effect. I think we need some but $40B of infrastructure spending would be silly. GST cuts are the only thing that are going to encourage spending.

I'm just curious, but why did this government wait so long to start spending the infastructure money already set aside?

http://www.canada.com/ottawacitizen/news/s...b3-dad6366f837e

[Progressive Tory]

I don't know.

But by paying off debt, wouldn't the financial institutions have more money available to extend loans to others? Also, wouldn't those who pay down debt end up with more disposable income thereby increasing their purchasing power? As one who used to pretty well live on credit (I learned my lesson a long time ago ), getting out of debt certainly has positive outcomes.

I have not read anything from anyone that says a deficit is avoidable in this economic climate. To the contrary, experts are saying a deficit is inevitable during this economic crisis. Looks like this line of thinking may let politicians off the hook.

They won't get off the hook so quickly. The Conservatives inherited a 13 billion dollar surplus, and I hate to break it to you folks, but we were in a deficite BEFORE news of the economic crisis. We're just heading for a bigger deficit.

http://www.thestar.com/News/Canada/article/549456

[Progressive Tory]

It seems this is an option gaining popularity. What about provincial sales tax? Shaving both by 2% would spur a lot of purchasing, especially expensive goods, and leave more money in the pockets of Canadians.

With the current and projected job losses, a great many Canadians will have NO money in their pockets. We need infastructure spending to create jobs.

[Alta4ever]

With the current and projected job losses, a great many Canadians will have NO money in their pockets. We need infastructure spending to create jobs.

After the projects are done what then? No more private sector jons were created.

The only reason to spend in infrastructure would be to get more bang for the taxpayer buck, spend on infrastructure that needs to get done not usless ditch digging make work projects.

[jdobbin]

The only reason to spend in infrastructure would be to get more bang for the taxpayer buck, spend on infrastructure that needs to get done not usless ditch digging make work projects.

That is a pretty lengthy list of projects. They will have to be done eventually. Might as well start on some of them now.

[capricorn]

So what I get out of all this crap you spew is that you think that you and government know better then me what I should spend my money on?

Alta, I thought you'd be interested to know that Gordon Campbell agrees with you here.

British Columbia's Gordon Campbell echoed the need for a pumped-up EI program but said he also favours middle-class tax cuts to rebuild the confidence of Canadians in the economy.

"I think having people's paycheques grow is one way that you build their confidence, and I think it's important for us to recognize that many times people make better choices than governments about what they should do with the dollars that they earn when they go to work," said Campbell.

http://www.montrealgazette.com/Business/Pr...4555/story.html

[ToadBrother]

I'm just curious, but why did this government wait so long to start spending the infastructure money already set aside?

http://www.canada.com/ottawacitizen/news/s...b3-dad6366f837e

Likely because they needed to reannounce at a few times. That's usually what happens with infrastructure money before it finally reaches its final destination.

[Smallc]

I'm just curious, but why did this government wait so long to start spending the infastructure money already set aside?

Winnipeg Councilor Gord Steeves called Building Canada a failure because of its funding model. It requires for provincial projects, a 50/50 split in costs. For municipal projects, it requires a 1/3 split in cost between all three levels of government. On top of that, each project has to meet application requirements.

An example of this is the fist leg of rapid transit in Winnipeg. The province and Ottawa can afford to give the money, but the city has to borrow its portion of the funding putting it further into debt. The provinces (for the most part) can afford this type of model, but many of the municipalities cant. I can see the benefit the the split model as it allows the money to go further, but on the other hand, if one level can't afford it at all, it might go nowhere. What the cities want is a model similar to the gas tax sharing model. The money is simply given to them and the only thing they have to do is spend it on infrastructure. It becomes internal city money and they don't have to apply or share to be able to use it.

Edited January 17, 2009 by Smallc

[Pat Coghlan]

In effect, the Liberals want the middle class to continue paying taxes at today's rates in order to minimize any deficit resulting from federal economic stimulus initiatives. This is wrong. The middle class should also receive a tax cut to bolster its purchasing power in order to increase consumption. In addition, it is unfair to use middle class wage earners to cushion the inevitable deficit.

If they're going to cut taxes, how about starting with the thousands of dollars of extra taxes paid by families which have one spouse earning most or all of the income, like they did with pension-splitting?

Ignatieff spent decades in the US, so he must be quite familiar with the US joint tax return.

If he puts THAT in his platform, he'll get my vote.

[whowhere]

In effect, the Liberals want the middle class to continue paying taxes at today's rates in order to minimize any deficit resulting from federal economic stimulus initiatives. This is wrong. The middle class should also receive a tax cut to bolster its purchasing power in order to increase consumption. In addition, it is unfair to use middle class wage earners to cushion the inevitable deficit.

In a free and democratic society there is no room for Class. Class has its origins in communist political structures and the aristocratic structue of Europe. Those in medieval Europe were Given titles by the kings or Queens to seperate themselves from the common folk.

What is middle Class? In a capitalistic tax driven economy the middle class would be those who occupy the middle income tax bracket when they file their tax return. However, people being people are keen and eager to marginalize and exploit people so they will demean their occupation in a move to drive them to low wages.

The United States has a definition of a middle class which I myself in fact meet that definition but I am not paid in accordance with that definition. Why because those who rally around class are eager to look down on people. We are in this financial mess because of the so called "middle class". The so called middle class are the ones involved in the front lines of business and have made decisions out of greed and lack of character that has buckled the world economies.

if Anything in these economic times someone has to pay for bringing the world economy to its knees. That somebody is the so called middle class. If anything tax cuts should be given to the low income bracket and the High Income Bracket.

In these times we need to encourage people to work and stay away from welfare and EI while at the same time rewarding CEO's who have to navigate the business world to calmer waters. These CEO's will have to start evaluating these self described middle class dead weights and get them off of their payrolls and transferring the savings to raise the wages of the working scum the middle class tower themselves above.

The fact is no one is entitled to anything. No to tax cuts but yes to tax increases for the so called middle class.

[Molly]

LOL

Is there anyone here who would not describe themselves as 'middle class'? It's an amorphous term, used politically in much the same way as the NDP would refer to 'the little guy', but even more folks identify with the term.

Promises of tax cuts for the middle class are cynical pandering. Someone has to pay at least some of the bills. It isn't going to be industry or resources in the short term, and it sure as guns isn't going to be the poor who pay it all. It won't be the unemployed, and the rich aren't raking in a lot of income lately. It can't be transferred to property, which is losing value in any case.

Sorry, but those of us who do have a reasonable living income are just goijng to have to pony up to at least the levels that we did last year, and anyone who figures otherwise is downright dangerous.

[Jerry J. Fortin]

LOL

Is there anyone here who would not describe themselves as 'middle class'? It's an amorphous term, used politically in much the same way as the NDP would refer to 'the little guy', but even more folks identify with the term.

Promises of tax cuts for the middle class are cynical pandering. Someone has to pay at least some of the bills. It isn't going to be industry or resources in the short term, and it sure as guns isn't going to be the poor who pay it all. It won't be the unemployed, and the rich aren't raking in a lot of income lately. It can't be transferred to property, which is losing value in any case.

Sorry, but those of us who do have a reasonable living income are just goijng to have to pony up to at least the levels that we did last year, and anyone who figures otherwise is downright dangerous.

Well Molly I hate to burst your bubble but, there are more rich folks than ever before. There are more poor too!

Yet you are right in suggesting the middle class will pickup the tab. Under Harper you can expect two things; 1) increased taxation for the middle class 2) service reductions.

[Smallc]

and anyone who figures otherwise is downright dangerous.

Yes, I honestly don't understand where everyone gets this idea that you can keep cutting taxes and everything will be ok. You get down to a level where you eventually have to cut spending or raise taxes again. It really would be nice if someone would find the balance between taxes and spending that is best for Canadians and that Canadians most like and then stop promising giant tax cuts or huge spending increases (unless they are absolutely necessary).

[Jerry J. Fortin]

Yes, I honestly don't understand where everyone gets this idea that you can keep cutting taxes and everything will be ok. You get down to a level where you eventually have to cut spending or raise taxes again. It really would be nice if someone would find the balance between taxes and spending that is best for Canadians and that Canadians most like and then stop promising giant tax cuts or huge spending increases (unless they are absolutely necessary).

So why not eliminate regressive forms of taxation altogether? Dump income taxes and replace them with consumption taxes, are we not a great consumer society? Dump property taxes on principal residences and raise taxes on ALL other forms of ownership, including leased land.

Restructure our revenue streams, reform our spending practices, reduce our bureaucracy, and enhance our lifestyles.

[Smallc]

Maybe, but nothing is ever so simple as it seems like it would be.