Flip Flop Iggy Flips again

[Dave_ON]

Do economists like luxury taxes? They would seem to be even better on these grounds. (And if so, why do we not see more of them?)

In many ways the HST is a luxury tax. The absolute necessities of life aren't taxed. Really the more you spend, the more HST you pay it scales all on its own. Those who can afford luxuries do pay the HST on those items and it tends to be a lot of HST as they are generally bigger ticket items. Honestly I think we should rework some of the exemptions, eliminate the tax credit and just remove tax on clothing, basic school supplies etc. It's cheaper to not collect a tax that will have to be refunded. This cuts down on administration on the government level and on what business have to report. It's win win and an overhaul like the HST is long over due. What we really need to do is eliminate income/payroll/capital gains taxes and implement a higher consumption tax.

[ToadBrother]

Do economists like luxury taxes? They would seem to be even better on these grounds. (And if so, why do we not see more of them?)

Sure, but the point here is to cast a wide net, not just go after people who buy big ticket items. I doubt economists would defend overly much luxury taxes, but they will tell you that consumption taxes are far less of a drag on the economy than income and capital gains taxes.

Edited August 25, 2010 by ToadBrother

[nicky10013]

In many ways the HST is a luxury tax. The absolute necessities of life aren't taxed. Really the more you spend, the more HST you pay it scales all on its own. Those who can afford luxuries do pay the HST on those items and it tends to be a lot of HST as they are generally bigger ticket items. Honestly I think we should rework some of the exemptions, eliminate the tax credit and just remove tax on clothing, basic school supplies etc. It's cheaper to not collect a tax that will have to be refunded. This cuts down on administration on the government level and on what business have to report. It's win win and an overhaul like the HST is long over due. What we really need to do is eliminate income/payroll/capital gains taxes and implement a higher consumption tax.

No income tax and one VAT at say 30% would never happen simply because it's horribly unfair to the poor. You're right, the absolute necessities aren't taxed, but even then, quite a bit of stuff people do need do carry tax on it, all of a sudden the tax burden on people who can really only afford the bottom tiered goods skyrockets while the tax rate on rich people would essentially plummet because "luxury" purchases aren't made nearly as often. What are you going to do? Limit further where the VAT would be applied? Have anyone under a certain income level not be taxed at all?

[Evening Star]

Hm, so catching up on this does make me a little more confident that this will be a progressive enough tax change:

http://www.thestar.com/news/ontario/hst/article/738403--hst-won-t-hurt-much-report-says

(Except that I kind of think that the govt should be trying to increase revenue!)

Now here's an honest question from someone who doesn't know enough about economics: Through the 50s and 60s, which were some of the most productive and prosperous times for the US, high-end American marginal income tax rates were much higher than they are in Canada or the US today: http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#Tax_rates_in_history

I mean, these figures are way beyond what Jack Layton would ever consider advocating. If the economy could prosper with those taxes at that time, why do we feel that it is so necessary to keep income taxes low now for the sake of the economy?

[William Ashley]

The whole flip flop con is a conservative ad slogan to attach to people who vote on issues rather than people.

Point being who cares about who is in your pool, it is the issue that matters.

Of course toppling a government that is corrupt is another responsibility of government in no confidence motions. Get a clue that a no confidence motion is not a vote on a bill.

Get it straight.

[Jack Weber]

Hm, so catching up on this does make me a little more confident that this will be a progressive enough tax change:

http://www.thestar.com/news/ontario/hst/article/738403--hst-won-t-hurt-much-report-says

(Except that I kind of think that the govt should be trying to increase revenue!)

Now here's an honest question from someone who doesn't know enough about economics: Through the 50s and 60s, which were some of the most productive and prosperous times for the US, high-end American marginal income tax rates were much higher than they are in Canada or the US today: http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#Tax_rates_in_history

I mean, these figures are way beyond what Jack Layton would ever consider advocating. If the economy could prosper with those taxes at that time, why do we feel that it is so necessary to keep income taxes low now for the sake of the economy?

Corporatocracy....

[bush_cheney2004]

....Now here's an honest question from someone who doesn't know enough about economics: Through the 50s and 60s, which were some of the most productive and prosperous times for the US, high-end American marginal income tax rates were much higher than they are in Canada or the US today:

That's not the complete picture for highest marginal rates in the USA, as the highest rates were applied to varying income thresholds over time. So today's seemingly lower rates apply to far more income based on this historic example for married-joint filers:

http://www.truthandpolitics.org/top-rates.php

[PIK]

Let's be very clear here, so do the Tories. Harper has just been smart enough to steer well and clear of the whole thing.

Iggy should take note. Sometimes not talking is much more important than talking

All mcliar had to do was adjust some of the taxes on certain stuff, like heating oil and this would not have been so bad. It seems this crew just does not think before it acts.

[Dave_ON]

No income tax and one VAT at say 30% would never happen simply because it's horribly unfair to the poor. You're right, the absolute necessities aren't taxed, but even then, quite a bit of stuff people do need do carry tax on it, all of a sudden the tax burden on people who can really only afford the bottom tiered goods skyrockets while the tax rate on rich people would essentially plummet because "luxury" purchases aren't made nearly as often. What are you going to do? Limit further where the VAT would be applied? Have anyone under a certain income level not be taxed at all?

Can't say I agree with this in the least. Taxing income is counter-productive as the tax burden rests more on the poor as it is. Anyone who makes say 45k or more a year likely has an RRSP, if the contribute say 8k of their income to an RRSP they have effectively lowered their income from 45k a year to 37k a year. This moves them down a tax bracket. Yes when they cash in their RRSP they will be taxed on that, however they will never really pay the tax rate they "should" have according to the scale paid. Those who make substantially less than 45k don't have this tax break available to them.

Consumption tax is unavoidable however, the truth of the matter is, the more money people make the more they tend to spend. This means those of lower income would retain more of their income to spend as they need. As I mentioned I'm not saying jack up the tax as it exists. We need to rework some of the exemptions, there are other necessities that should also be tax exempt, but iPhones, PS3, computers, cars etc. should be taxed. There are many states in the US that do not tax items such as clothing and hair cuts and I think these shouldn't be taxed. But if you eat at McDonald's you should be taxed as this is not a necessity. There are many of little things that people buy daily that would make up for the loss of income tax revenue.

[bloodyminded]

Can't say I agree with this in the least. Taxing income is counter-productive as the tax burden rests more on the poor as it is. Anyone who makes say 45k or more a year likely has an RRSP, if the contribute say 8k of their income to an RRSP they have effectively lowered their income from 45k a year to 37k a year. This moves them down a tax bracket. Yes when they cash in their RRSP they will be taxed on that, however they will never really pay the tax rate they "should" have according to the scale paid. Those who make substantially less than 45k don't have this tax break available to them.

Consumption tax is unavoidable however, the truth of the matter is, the more money people make the more they tend to spend. This means those of lower income would retain more of their income to spend as they need. As I mentioned I'm not saying jack up the tax as it exists. We need to rework some of the exemptions, there are other necessities that should also be tax exempt, but iPhones, PS3, computers, cars etc. should be taxed. There are many states in the US that do not tax items such as clothing and hair cuts and I think these shouldn't be taxed. But if you eat at McDonald's you should be taxed as this is not a necessity. There are many of little things that people buy daily that would make up for the loss of income tax revenue.

But what are you advocating to be taxed that isn't already? Or do you mean the taxes should be higher?

Edited August 26, 2010 by bloodyminded

[capricorn]

Iggy should take note. Sometimes not talking is much more important than talking.

On the question of the HST, Ignatieff is not making any friends in BC.

The HST was announced in B.C. in 2009, just weeks after the ruling Liberals were re-elected after an election campaign during which they made no mention of introducing the tax.

Premier Gordon Campbell said later that the HST was not even considered by the government until after the campaign.

http://www.cbc.ca/canada/british-columbia/story/2010/08/24/bc-hst-ignatieff.html

"The way it's (HST) been implemented in British Columbia is a classic example of how not to do it. It has created a lot of popular anger and every politician has to draw one lesson from it, which is listen to the people, and not introduce taxes after giving the impression that you are not going to do so," he said.

http://www.piquenewsmagazine.com/pique/index.php?cat=C_News&content=Ignatieff+1734

Ignatieff made a good point about not taxing citizens after promising not to do so. But was it wise for him to go to such lengths in BC? If I have a rotten brother-in-law, chances are I know he is a rotten s.o.b. But if a virtual stranger tells me to my face and in public that my brother-in-law is rotten, I would probably resent the stranger for butting into my family's personal business.

Iggy's comments on the HST may come back to haunt him, especially if he becomes PM. He is not paving a very smooth road for future relations between the federal Liberals and British Columbians and their provincial government.

[Dave_ON]

But what are you advocating to be taxed that isn't already? Or do you mean the taxes should be higher?

I'm saying consumption tax, ie. the HST should be higher and offset by the elimination or drastic reduction in income/payroll/capital gains taxes.

[bloodyminded]

I'm saying consumption tax, ie. the HST should be higher and offset by the elimination or drastic reduction in income/payroll/capital gains taxes.

It would have to be an awful lot higher to offset that other tax money, wouldn't it?

[Evening Star]

That's not the complete picture for highest marginal rates in the USA, as the highest rates were applied to varying income thresholds over time. So today's seemingly lower rates apply to far more income based on this historic example for married-joint filers:

http://www.truthandpolitics.org/top-rates.php

No, I get that, but virtually no one advocates, say, a 60% tax rate even on income over $1M today. (I'm sure we could raise a great deal of government revenue by just adding three more tax brackets above our current highest bracket - $127K seems really low for the highest tax bracket to me. And 29% is really not that high of a tax rate beyond a certain income.) I wonder why this has changed so much since a highly progressive tax regime didn't seem to hamper the American economy 50 years ago. Is it just that governments have been dropping their tax rates to compete with each other?

[bush_cheney2004]

.....I wonder why this has changed so much since a highly progressive tax regime didn't seem to hamper the American economy 50 years ago. Is it just that governments have been dropping their tax rates to compete with each other?

No, the practical impact on actual income tax revenue has been minimal, always staying right around 20% of U.S. GDP (Hauser's Law). The growth of the middle class and increases in other revenue streams (e.g. Social Security) has made sky-high marginal rates irrelevant. The changes over time have been more influenced by wars, economic downturns, and politics, and cannot be isolated to your proposed "boom" of 50 years ago.

[Evening Star]

I see. I didn't think Hauser's Law was taken that seriously amongst economists?

[Jerry J. Fortin]

Just the other day a newspaper in Edmonton had a front page ad about a sales tax for Alberta. As most of you know there is no such animal in Alberta, and the public here will have something to say about creating such an animal. For the rest of you folks who do have a sales tax in your province, I feel for you guys. The harsh reality is that it is a very blind and equally applied tax, everybody eats it, and it is a huge revenue stream for provincial income. The damned governments of this nation gobble up wads of cash daily and these sales tax things feed its hunger for ever increasing funding. In my mind it is better than raising income tax revenues by any means, but I am in a unique position along with my fellow provincial citizens.

[punked]

We Have our latest Flip Flop from Ignatieff. This one is on a Mining Bill put fourth by a Liberal, which had wide support. Ignatieff show up and voted for the Bill the first two times. This last time Mr. Ignatieff was no where to be seen and his party whip told enough Liberals to say home so the Bill will die. The Globe says it is because of the Lobbying of big Liberal donors in the mining sector. Sure glade Mr. Ignatieff cares about us, wait he just cares about winning and that means he needs money and donors.

Some Liberals are confused as to where their leader, Michael Ignatieff, stands on issues. Wednesday night was a good example.

Liberal Leader Michael Ignatieff, a human rights expert and former academic, indicated last week in caucus he was not in favour of a private member’s bill by Scarborough MP John McKay that called for Canadian mining firms to act ethically abroad or face sanctions, including being denied taxpayer funding.......

http://www.theglobeandmail.com/news/politics/ottawa-notebook/ignatieffs-mixed-message-on-mining-leaves-liberal-heads-spinning/article1776539/

Flip Flop Flip Flop. No one knows where the Liberals stand on any issue.

[Keepitsimple]

We Have our latest Flip Flop from Ignatieff. This one is on a Mining Bill put fourth by a Liberal, which had wide support. http://www.theglobeandmail.com/news/politics/ottawa-notebook/ignatieffs-mixed-message-on-mining-leaves-liberal-heads-spinning/article1776539/

Flip Flop Flip Flop. No one knows where the Liberals stand on any issue.

I like reading the comments by readers after the article. G & M readers are largely Liberal, yet there are a huge number of them who are completely frustrated with Mr. Ignatieff. His thought process - or lack of it - really does boggle the mind.

[punked]

I like reading the comments by readers after the article. G & M readers are largely Liberal, yet there are a huge number of them who are completely frustrated with Mr. Ignatieff. His thought process - or lack of it - really does boggle the mind.

Seriously these should be winning issues for the Liberals but their leader keeps Flip Flopping like a fish out of water.

[Shakeyhands]

I like reading the comments by readers after the article. G & M readers are largely Liberal, yet there are a huge number of them who are completely frustrated with Mr. Ignatieff. His thought process - or lack of it - really does boggle the mind.

G&M readers are mainly dippers I believe.

[punked]

G&M readers are mainly dippers I believe.

No way do you become Canada's largest newspaper by selling to 16% of the public that is crazy talk.

[The_Squid]

Seriously these should be winning issues for the Liberals but their leader keeps Flip Flopping like a fish out of water.

Punnishing companies who behave badly in terms of human rights should be a winner for any party. Who the hell likes to see Canadian resource extraction companies killing/maiming people abroad for the almighty dollar? Not even reasonable Conservative supporters are in favour of that.

But when corporations speak, Liberal and Conservative politicians listen... even if it means that people die.

Edited October 28, 2010 by The_Squid

[M.Dancer]

No way do you become Canada's largest newspaper by selling to 16% of the public that is crazy talk.

My Gosh, I agree with Punk. Globe and Mail readers are 4 times as likely as the average canadian to have a personal income over 125K while 24% are described as senior management.

As contrary as this sounds, the Toronto Sun probably has more NDP supporters than the Globe.

[nicky10013]

Get your head out of the sand. It's not just the leader - it's the party - it's the party that's been fighting among itself for 30 years - Turner/Chretien, Chretien/Martin, now Ignatieff/Rae. It's the backroom boys that led to importing both Rae and Ignatieff - causing a squabble that led to Stephane Dion as leader. It's the backroom boys who "annointed" Ignatieff. It's Chretien sticking his nose in the Coderre business. It's the lack of democracy within the party that allows for so many "appointments" and a leadership process that marginalizes the grass roots. There is so much pushing and pulling going on, absent of any policies, absent of any purpose, absent of any direction......and you think that simply finding "the right leader" will make people want to put the Liberals back in power. The rot in the party is wide and deep and will take many years to repair. That's why Mmanley, Rock and McKenna said "thanks, but no thanks"......they knew. There are no quick fixes back to power.

Infighting in the Liberal Party has been absolutely nothing compared to the infighting in within the CPC. Harper is the first leader in Conservative history since Diefenbaker that hasn't been completely undercut by their own party. It's called the Blue Curse.