Harmonizing the GST and PST

[madmax]

The GST tax credit ensures that people of limited means get a refund for the tax paid. No one can credibly argue that the GST is worse for the poor than income tax.

Only people with no knowledge of make that claim. Paying the GST costs people far more then what they receive in Government rebates, if they receive those rebates at all, and many times they don't.

It definitely worse for lower income households and particularly fixed income households.

There is no rational reason for exempting services from sales taxes (they never had to before is not rational).

The reason that many items of necessity were not taxed SUCH AS MILK, Shoes... etc.. is because of the undue hardship and burdens upon families. The very fact that it costs lower income households more and they are least able to afford these purchases. Its why McGuinty heard the Shit fit and backed down on taxing diapers.

It is rational..... It is irrational to suggest that every consumer item should be taxed. Personally, I am against the tax applied when resell car. If the car is sold 10 times, the government gets 10Xs its value in taxes, compared to a vehicle sold once. This is purely a tax grab. Now the Conservatives are in on the game.

An government needs taxes to function. It makes zero sense to depend entirely on income taxes since punative income taxes hurt the economy more than punative sales taxes. A 12% HST is quite reasonable and should be nothing to complain about.

Just another tax scam, and the government wants more money.... and the general public is going to foot the bill.

Its just about WHO pays and WHO doesn't.

And punative income taxes just happen to be progressive and HST just happens to be a double bag of regressive taxes.

Besides, the government is cutting back on services so why should those at the bottom pay more?

If the wealthier are getting more of a free ride, and getting more money back, and the object is to be revenue nuetral, then it is clear that the middle, and lowermiddle class are going to pay more.

[Riverwind]

Paying the GST costs people far more then what they receive in Government rebates, if they receive those rebates at all, and many times they don't.

People who don't receive the rebates are not poor. They are middle class and are will be paying income tax as well (i.e. they benefit from the lower income taxes that are the result of the GST).

The reason that many items of necessity were not taxed SUCH AS MILK, Shoes... etc.. is because of the undue hardship and burdens upon families.

Since when are restaurant meals and hair stylists necessilties?

The very fact that it costs lower income households more and they are least able to afford these purchases. Its why McGuinty heard the Shit fit and backed down on taxing diapers.

Dumb move on McGuities part. Kids are a choice. People should not have them if they cannot afford to pay the cost.

It is rational..... It is irrational to suggest that every consumer item should be taxed.

No less rational than taxing income. Why should someone have to pay the government a share of their income?

Its just about WHO pays and WHO doesn't.

Consumption taxes are the best kind of taxes because everyone pays something which means everyone has a stake in ensuring that the taxes are used effectively. Tax systems that depend too much on income tax are disfunctional because only a minority of people pay taxes.

If the wealthier are getting more of a free ride, and getting more money back, and the object is to be revenue nuetral, then it is clear that the middle, and lowermiddle class are going to pay more.

The wealthy don't consume the majority of services provided by government. The people who use the services should expect to pay a reasonable share of the cost. Edited July 30, 2009 by Riverwind

[msj]

... and the object is to be revenue nuetral

There is no claim by the government that the HST is to be revenue neutral.

In BC the government claim is that the carbon tax will be revenue neutral.

What this means, from the governments' POV, is that for every dollar that they collect in the carbon tax, they will offset that somehow against other taxes (or with transfers to individuals such as the carbon tax dividend).

That claim is becoming impossible to track, however.

I do note, having looked at some BC Public Accounts the other night, that BC's share of revenues has been in a narrow range (as a % of provincial GDP) for the past many years which is an indication that taxes have changed (the mix) while the overall total has remained in a tight range whereby there is too much "noise" in the data to reasonably conclude the extent to which total taxes are higher or lower.

[madmax]

People who don't receive the rebates are not poor. They are middle class and are will be paying income tax as well (i.e. they benefit from the lower income taxes that are the result of the GST).

People who are poor often do not receive rebates. Yes there are people who are poor who do receive rebates. Not all poor people receive rebates. Regardless, the rebates do not cover the costs of paying GST. And yes, middle income people often do not receive a rebate. Nor will their income tax cut cover the increased HST. Its not revenue neutral... they will be paying more.

Since when are restaurant meals and hair stylists necessilties?

You are winning the hearts and minds of hairstylists and mothers everywhere. Perhaps your right....the kids can do without a haircut every 4 weeks and go for six weeks or 8 weeks.

From your discussion, you wish to put the HST on every grocery product as well.

Dumb move on McGuities part. Kids are a choice. People should not have them if they cannot afford to pay the cost.

hmmm, better talk to Mr. Canada on some of that... .... ok..... ouch... bad thread drift...

The question is, why shift the burden onto younger families? And why should Conrad Black and his pals get more money and the young family pay more money?

No less rational than taxing income. Why should someone have to pay the government a share of their income?

We had a debate 92 years ago LOL.....

The concept of taxing income is a modern innovation and presupposes several things: a money economy, reasonably accurate accounts, a common understanding of receipts, expenses and profits, and an orderly society with reliable records. For most of the history of civilization, these preconditions did not exist, and taxes were based on other factors.

The Birth of Income Tax (1917)

On that day, the 50-year old finance minister tabled a resolution which called for income tax: 4% on all income of single men over $2,000. For others, the personal exemption was $3,000. For those Canadians with annual incomes of more than $6,000, the tax rate ranged from 2 to 25 per cent.

Consumption taxes are the best kind of taxes because everyone pays someone which means everyone has a stake in ensuring that the taxes are used effectively. Tax systems that depend too much on income tax are disfunctional because only a minority of people pay taxes.

The wealthy don't consume the majority of services provided by government. The people who use the services should expect to pay a reasonable share of the cost.

Its is important to reduce the burden upon those with the greatest ability to pay?

This isn't about the USE of government services, this is about the taxing of private services and consumer goods.

The government is to use our tax monies to provide services. Many of these services benefit the Wealthy in a disproportionate measure. That not a bad thing.... Canals, Highways and Railways lead to greater prosperity.

A Big Income Tax Break for John Deere is great, because they can use that NEW found capital to invest in Mexico. Then those out of work people earning EI income, or in new occupations earning significantly less pay less in Taxes as well. GOOD EH... so to boost up this loss of Income Tax, we tax those same people on the bottom end to recoup what has been lost. Unfortuneately their purchasing power has diminished as well, and this extra tax isn't givign them a whole lot to cheer about.

YEAH!!! more tax 8% extra on each visit to the pump, hurray!!!

Income taxes have not proven to be disfunctional...

[madmax]

There is no claim by the government that the HST is to be revenue neutral.

Then we pay more... Hurray....More burden on lower middle income families...

[madmax]

Once again, Riverwind, well stated.

He always does explain his position clearly.

Edited July 30, 2009 by madmax

[msj]

He always does explain his position clearly.

And he also reads things carefully, too.

[msj]

Then we pay more... Hurray....More burden on lower middle income families...

See post #175:

The "rich" will continue the whine about paying too much while the "poor" and "middle class" will continue the whine about not getting enough services (since the "poor" really don't pay much, if any net tax) and/or getting squeezed in the middle.

Same as it ever was....

[madmax]

See post #175:

I knew you were going there... LOL....

Go to post #1

While I do follow your information on BC Provincial Taxation, and you have lots of other Provincial Taxes that we do not have here in Ontario.

BC has not Harmonized the Tax and quite frankly when you suggest that RENT is NOT Taxed with the PST, you can be rest assured that RENT will be taxed with BOTH PST and GST under the HST. Last statement I read on Rent and Condo fees in Ontario was that the HST would apply to both.

That is a HUGE money grab.

When you talk about an income of $16,000 or less receiving up to $385. you assume that only close to $8000 of that income will be spent.

What you are suggesting is that they are paying GST on More then Half their income, because I would think in BC it would be unlikely to attain much in savings after general living expenses. Considering that one could assume that RENT would eat up the other half of that income, this will now (In Ontario) be subject to the HST, and according to Riverwind, all consumption and services should pay.

Edited July 30, 2009 by madmax

[msj]

The concept of taxing income is a modern innovation and presupposes several things: a money economy, reasonably accurate accounts, a common understanding of receipts, expenses and profits, and an orderly society with reliable records. For most of the history of civilization, these preconditions did not exist, and taxes were based on other factors.

The Birth of Income Tax (1917)

On that day, the 50-year old finance minister tabled a resolution which called for income tax: 4% on all income of single men over $2,000. For others, the personal exemption was $3,000. For those Canadians with annual incomes of more than $6,000, the tax rate ranged from 2 to 25 per cent.

You do realize that the top federal tax rate is 29%, right?

In BC that means the top tax rate is 43.7%. Not progressive enough for you, I suppose?

Its is important to reduce the burden upon those with the greatest ability to pay?

This isn't about the USE of government services, this is about the taxing of private services and consumer goods.

The government is to use our tax monies to provide services. Many of these services benefit the Wealthy in a disproportionate measure. That not a bad thing.... Canals, Highways and Railways lead to greater prosperity.

All the more reason to bring in tolls for highways, canals and railways!

We'll make those rich pay since they get so much benefit out of them!

YEAH!!! more tax 8% extra on each visit to the pump, hurray!!!

In Ontario, I guess. In BC the 7% is not to be added on the gasoline.

Income taxes have not proven to be disfunctional...

Sez who? The guy who wants to see the "rich" pay more income taxes?

How quickly people forget the days of 54% marginal tax rates starting around $80,000 of taxable income (in BC in 1998, for example).

[msj]

BC has not Harmonized the Tax and quite frankly when you suggest that RENT is NOT Taxed with the PST, you can be rest assured that RENT will be taxed with BOTH PST and GST under the HST. Last statement I read on Rent and Condo fees in Ontario was that the HST would apply to both.

That is a HUGE money grab.

When you talk about an income of $16,000 or less receiving up to $385. you assume that only close to $8000 of that income will be spent.

What you are suggesting is that they are paying GST on More then Half their income, because I would think in BC it would be unlikely to attain much in savings after general living expenses. Considering that one could assume that RENT would eat up the other half of that income, this will now (In Ontario) be subject to the HST, and according to Riverwind, all consumption and services should pay.

Long term residential rent is exempt from GST and will presumably be so in BC (and probably Ontario too).

I will believe long term residential rent is taxable when I see the government bulletin rather than rely on you for that information.

As for the person making $16,000 - well, if they pay rent of $600/month then that is not taxed.

Say basic groceries of $200/month which isn't taxed.

Now we're at $9,600 in exempt expenditures per year leaving about $6,400 (at most) to be spent on taxable items which is $320 in GST.

Hell, this person's coming out ahead - no income taxes AND a net GST benefit of $65.

So, yeah, I do think $385 was sufficient for the GST credit.

I am willing to wait and see about the HST tax credit next year.

[benny]

Thanks.....

I did get a kick out of Michael Hardeners Reply....

"So, the tax rate should be voluntary ?"

"It is not commanded, but being a voluntary determination of our judgement, conducive to a moral purpose." (Kant)

http://infomotions.com/etexts/gutenberg/di...t04/ikcpr10.htm

[Riverwind]

People who are poor often do not receive rebates.

Rebates are based on income. If you have low income you receive a rebate. If you don't receive one you either did not apply or you have an income too high to make you poor.

Its is important to reduce the burden upon those with the greatest ability to pay?

Who defines "ability to pay"? I know people with much higher income than me who live pay check to pay check because of the life style choices they make. I know people who make less than me who claim to be comfortable yet I could not live on that income. The point I am making is the vast majority of people are perfectly able to pay their share of taxes if they make the right lifestyle choices. The trouble is most people don't want to make those lifestyle sacrifices and would rather see "others" such as the mythical "rich" pay instead.

This isn't about the USE of government services, this is about the taxing of private services and consumer goods.

You cannot seperate one from the other. Taxes should be levied in a way that encourages accountability on the part of the people demanding the services. A system where a minority pay a majority of the taxes to pay for the services demanded by the majority is an unaccountable and disfunctional system. Broad based consumption taxes are the most effective way to ensure accountability because everyone pays something. Edited July 31, 2009 by Riverwind

[benny]

Who defines "ability to pay"?

Ability means easy money.

[Wilber]

The HST is a flow through tax and it has no effect on my costs (i.e. paying 7% more to my accountant simply means I deduct 7% more from my HST bill).

In the long run a broad based consumption tax is the best type of tax because it means other taxes, such as income taxes, will be lower. The broad based consumption tax also ensures that everyone contributes something to the government which means everyone has a stake in getting value for taxes paid. Income taxes have become so progressive over the years that a large percentage of the population pays no income tax which means they have no stake.

It may not effect your costs but it will the consumer of your product as they will now be paying the additional 7% for your accountant. I don't know what you produce but I don't see how increasing the cost of your product to the Canadian consumer at least is going to increase your sales or profits. Unless of course, all you do is export or government is your only customer.

Since when are restaurant meals and hair stylists necessilties?

I see a revival of seventies hairstyles.

I'm sure all those who depend on these industries for their living thank you for your support. I"m all right Jack.

Bottom line is, it will make most things more expensive and there is only so much money out there. It's a tax increase, pure and simple. More government revenue, less ability for the consumer to spread their income around.

[benny]

I see a revival of seventies hairstyles.

I'm sure all those who depend on these industries for their living thank you for your support. I"m all right Jack.

Bottom line is, it will make most things more expensive and there is only so much money out there. It's a tax increase, pure and simple. More government revenue, less ability for the consumer to spread their income around.

Since not all lifestyles are equally healthy, consumption tax comes to cover healthcares.

[Wilber]

Since not all lifestyles are equally healthy, consumption tax comes to cover healthcares.

Duh! So you agree, it is an overall tax increase.

[benny]

Duh! So you agree, it is an overall tax increase.

All taxes in Canada are currently suboptimal.

[Wilber]

All taxes in Canada are currently suboptimal.

What is optimal to you, 100%?

[benny]

What is optimal to you, 100%?

A capture rate of 100% is optimal only for economic rents.

[Wilber]

A capture rate of 100% is optimal only for economic rents.

Now you want government to pay your rent.

[benny]

Now you want government to pay your rent.

Learn more about economic rent.

[Wilber]

Learn more about economic rent.

Nope

[benny]

Nope

You will learn it the hard way then!

[Wilber]

You will learn it the hard way then!

Mostly it's just because I'm tired of your continual one liners and your reluctance or inability to actually discuss an issue or outline a position.