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Changes to GST


Topaz

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I'm sure if you watched the evening news you heard about the economist from the U of Calgary, saying the government should place GST on EVERYTHING, including food and medicine, so the government could take more money in and help out the lower income more. He thinks the 100,000 incomers shouldn't get the benefits the low income need, like no GST on food. I don't know if this is another fishing events on the Tories part, but people won't stand for this one. IF they want more money than hit the 100,000 incomers with an increase in taxes or reduce a write on their incomes but leave the food and medicines alone. Thoughts? http://www.ctv.ca/CTVNews/TopStories/20120224/food-economists-gst-120224/

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yeah, not gonna happen, why not tax the rich? what is with these assholes and their obsession with taxing the poor?

People would buy less healthy foods because food that is bad for you is generally cheaper than food that is healthy

Paying taxes is good for the country only if the country isn't wasting it...the CPC are spending billions & billions of dollars on their ideologies when they should be spending as little as possible to get the deficit reduced.. that is hardly fiscal

Go ahead Harper and try it, see where you end up

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Back to the article, the study makes some interesting conclusions.

For example, the current food exemption is worth $8 billion. But the economists said that not applying the GST to food is actually an inefficient way to help the poor because it mostly benefits wealthy Canadians.

"Over a third of that value goes to people with families whose income is more than $100,000. So we exempt food to help low-income people, but it's a very costly way of doing it," said Mintz.

I don't doubt that it is the wealthy that spend the most on medicine and food. From my experience, most people who are poor don't see a doctor or get meds unless they are on death's door... and they obviously spend a lot less on food.

If you're on a tight budget you can get by with $200/mo on food if you shop for discounts at the grocery store. If you are wealthy you can spend $200 a day at fancy restaurants.

Edited by CPCFTW
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I think it makes a lot of sense.

A better off family who make good money would likely pay $500 to $600 (or more) of GST per year on groceries.

Meanwhile, a poorer family may pay $300 to $400 more on groceries but with an increased GST tax credit they would likely get this all back.

End result would be the "rich" paying more in tax.

But we live in a world where people see the tax being paid everyday and conveniently forget the quarterly payment they receive from the GST tax credit which is meant to offset some, or all, of it.

Stupid people = bad policy.

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If you're on a tight budget you can get by with $200/mo on food if you shop for discounts at the grocery store. If you are wealthy you can spend $200 a day at restaurants.

Sure, but if you spend $200/day in restaurants then you are already paying GST.

But if you spend $200 on manchego cheese, caviar, fresh papaya, prosciutto, and other good food then you pay nothing in GST.

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Sure, but if you spend $200/day in restaurants then you are already paying GST.

But if you spend $200 on manchego cheese, caviar, fresh papaya, prosciutto, and other good food then you pay nothing in GST.

Ah it's only groceries... yeah there is a lot of discrepancy in product pricing at grocery stores too. I also feel like poorer families are more likely to buy a tub of KFC or bring home some big macs for dinner. Home-cooked family dinners are increasingly becoming a luxury.

Edited by CPCFTW
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I'm sure if you watched the evening news you heard about the economist from the U of Calgary, saying the government should place GST on EVERYTHING, including food and medicine, so the government could take more money in and help out the lower income more. He thinks the 100,000 incomers shouldn't get the benefits the low income need, like no GST on food. I don't know if this is another fishing events on the Tories part, but people won't stand for this one. IF they want more money than hit the 100,000 incomers with an increase in taxes or reduce a write on their incomes but leave the food and medicines alone.
Topaz, you're the go-to-person for an opinion on such a question.

If we extend the GST to everything, this simplifies the tax collection. The State will be able to collect taxes more easily from corporations, businesses, rich people. There will be fewer loopholes.

But if we extend the GST to everything, people will pay tax on food and rent, for example.

If we extend the GST to everything, the government promises larger GST refunds. They'll call it the Food Tax Refund.

====

For people other than Topaz, should we decide tax policy in a democratic society - one person=one vote - where many citizens receive more from the State than they pay in taxes?

IOW, what happens when a democratic society (50% + 1) decides its tax policy through majority vote?

Well, look at cigarette taxes.

About 20% of Canadians - according to Statistics Canada - smoke cigarettes. (I suspect that many more Canadians smoke cigarettes than the Statscan number. Why? Because we live in the 21st century and Statistics Canada bureaucrats collect data in 19th century terms.)

Whatever the Statcan number, cigarette smokers (closet smokers included) are likely a minority in Canada - less than 50%.

If we decide tax policy by majority vote, the majority - the non-smokers - will agree to tax cigarettes. In a democracy where the tax regime is decided by 50% +1, the majority of non-smokers can make the minority of smokers pay higher taxes.

And poor people, if more than 50%, can vote to impose income taxes on the richer 49% - while exempting the poorer 51% from any tax at all. This is the tyranny of the poor.

Edited by August1991
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I think it makes a lot of sense.

A better off family who make good money would likely pay $500 to $600 (or more) of GST per year on groceries.

Meanwhile, a poorer family may pay $300 to $400 more on groceries but with an increased GST tax credit they would likely get this all back.

End result would be the "rich" paying more in tax.

But we live in a world where people see the tax being paid everyday and conveniently forget the quarterly payment they receive from the GST tax credit which is meant to offset some, or all, of it.

Stupid people = bad policy.

It makes no sense for the government to take money from people then give it back. They should ditch consumption taxes, and raise all that revenue through graduated income tax, and just exempt earners under 12k or so.

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It makes no sense for the government to take money from people then give it back. They should ditch consumption taxes, and raise all that revenue through graduated income tax, and just exempt earners under 12k or so.

It makes perfect sense because it:

- Diversifies the tax base.

- People who do manage to evade income taxes (to whatever extent) may not evade consumption taxes to the same extent (and/or vice versa).

- It would be simple to administer (unlike now - GST/HST is becoming a pig of a system and is quite inefficient).

- It would be efficient - or at least more efficient than now.

- It allows the government to correlate business revenue from GST/HST information to their income tax returns which has proven quite useful in targeting certain businesses/industries for either income tax or GST/HST audits.

- It provides and incentive for low income people to file income tax returns which provides useful information to the government.

- Helps reduce income taxes - high income taxes may act as a disincentive to earn more (and pay more income tax).

- Acts as a disincentive to consume more crap.

- etc...

Edited by msj
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It makes perfect sense because it:

- Acts as a disincentive to consume more crap.

Does that really make "perfect sense" in a recovering economy?

If they're going to do anything, they should just revert the damn thing back to 7%. But they won't do that because God forbid they be seen as overtly raising taxes. It's ok to extend them to other things and raise them through the back door, but not out in the open like simply putting the GST back to where it was.

Edited by cybercoma
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If they're going to do anything, they should just revert the damn thing back to 7%. But they won't do that because God forbid they be seen as overtly raising taxes. It's ok to extend them to other things and raise them through the back door, but not out in the open like simply putting the GST back to where it was.

"They" aren't the ones proposing this, a couple of university economists are.

If there is one thing I wish they'd do with all taxes (new and old), it's actually account them for the things they were proposed to be for. Gas tax for infrastructure, GST for paying debt, lotteries for sports, sin taxes for healthcare, etc. Don't dump these things into general revenue, then pick and choose what goes where later. Make them separate line items that are fully accounted for like CPP and EI.

It makes no sense for the government to take money from people then give it back. They should ditch consumption taxes, and raise all that revenue through graduated income tax, and just exempt earners under 12k or so.

Something this simple just makes too much sense. Government's of all stripes don't tend to do simple things with respect to income tax. For some reason, they always want to make it more complicated.

Edited by Bryan
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yeah, not gonna happen, why not tax the rich? what is with these assholes and their obsession with taxing the poor?

People would buy less healthy foods because food that is bad for you is generally cheaper than food that is healthy

Paying taxes is good for the country only if the country isn't wasting it...the CPC are spending billions & billions of dollars on their ideologies when they should be spending as little as possible to get the deficit reduced.. that is hardly fiscal

Go ahead Harper and try it, see where you end up

Very classy, but typical to call people you disagree with "assholes".

Having said that and commenting on the rest of your post:

People would buy less healthy foods that is bad for you, not because they are cheaper, but because it takes no effort to prepare it. A bag of dry beans costs far less than a can of prepared beans, but it would take an effort to cook it. In that community "WORK" is a dirty, four-letter word.

Taxes that are paid by the producers to support the free-loading non-producers is the biggest waste of money. In that community "WORK" is a dirty, four-letter word.

Ideology and spreading thereof is what keeps the NDP in perpetual third place, with occasional exceptions, when the NDP got a foothold in mainstream politics, to the greatest regret of the duped suckers, when the inevitable results emerge.

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Are you trolling? Who in their right mind thinks that consumption taxes are better for economic growth than income tax? You can't possibly be serious. You wrote earlier that it limits consumption. On what world does limiting consumption help the economy?

Edited by cybercoma
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Are you trolling? Who in their right mind thinks that consumption taxes are better for economic growth than income tax? You can't possibly be serious. You wrote earlier that it limits consumption. On what world does limiting consumption help the economy?

Lots of economists think consumption taxes are better for economic growth than income taxes.

Sure, we don't want to tax consumption at high levels.

So while we will see a top marginal tax of 44% in BC in 2012 (as compared to 54% back in 1999) we will never see a consumption tax of, say, 20%.

To think that taxing people way, way, more on their income than on their consumption isn't going to hurt economic growth makes one wonder if you are in your "right mind."

------

You also seem to be fixated on this "limits consumption."

You completely seem unable to comprehend that raising consumption taxes helps to reduce income taxes.

This helps increase economic activity - encourages people to work, invest, save (and consumption taxes may act as an incentive to save too).

On what world does reducing disposable income (through higher income taxes) help the economy?

So, once again, I question your "right mind."

Edited by msj
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I'm focused on consumption taxes being a "disincentive to consume" because that's exactly what you said. Now you're saying it's not going to affect consumption because it allows them to reduce income tax. But if they're just going to balance out a rise in the GST with a reduction in income taxes, what's the point other than to increase the burden on the poor? Their income taxes are already low and a much larger proportion of their income is consumed, if not all of it. Thus it disproportionately affects them and will hinder profits to companies by being a "disincentive to consume", although I wouldn't exactly call it that. What it does in actuality is leaves less money for the poor to purchase the things that they need, in this case medicine and groceries as well as all other consumables, while the government turns around and hands that money over to those that are doing just fine in the form of tax breaks and billion dollar incentives to corporations. It doesn't help the economy at all because businesses can't grow if people are increasingly finding it more difficult to buy things. Money needs to stay in the hands of the people. Through the markets they ought to decide what businesses get their money and what businesses don't.

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