Federal Budget 2016: Increase the Gasoline Excise Tax!

[August1991]

As I drove home tonight, gas was at 89.4 in Montreal. WTF? (My tank was full because I bought at 92.9 - CdnTire, so I got the points.... )

If I were a politician, I reckon that now is the time to raise taxes on gasoline.

At present, there is a federal excise tax of 10 cents per litre on every sale of gasoline in Canada. (Some people are exempt from this federal excise tax: Indians, farmers (blue gas)... ) Note that this federal excise tax is before any calculation of GST/PST/HST etc.

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1) I suggest that the federal government raise the excise tax on gasoline from 10 cents per litre to 20 cents. In Canada, gasoline sales are about 40 billion litres per year. The federal government could raise about $4 billion more, each year.

2) This is environmentally friendly. It's a carbon-dioxide tax.

3) The $4 billion will pay for urban infrastructure/subways or paved rural roads. Wahtever.

4) The next federal budget deficit looks very ugly. (Morneau needs money.) Gasoline tax now when the price is low? A political no-brainer.

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IMHO, if the next federal budget doesn't include an increase in the federal gasoline excise tax, these guys are amateurs.

Edited February 16, 2016 by August1991

[poochy]

Perhaps 30 cents would be better, think of the green jobs that would be created.

[Smoke]

Maybe it's time to make reductions where they are sorely needed....public service unions.

[Boges]

Then when/if Oil gets up to $100/litre then what?

[GostHacked]

Then when/if Oil gets up to $100/litre then what?

Then you STILL pay that extra tax. So much for a capitalistic economy. This is all on the heels of the oil sector loosing lots of money due to the low price of oil per barrel on the market. This is nothing more than a bail in of sorts.

Now you see Russia and Saudi Arabia agreeing to halt production to get the supply back in the right spot. Meaning they are loosing money too. Interesting to see all major players in trouble due to the low price of oil.

[Boges]

Then you STILL pay that extra tax. So much for a capitalistic economy. This is all on the heels of the oil sector loosing lots of money due to the low price of oil per barrel on the market. This is nothing more than a bail in of sorts.

Now you see Russia and Saudi Arabia agreeing to halt production to get the supply back in the right spot. Meaning they are loosing money too. Interesting to see all major players in trouble due to the low price of oil.

I think what people on the left, don't want to admit is that technology has already greatly reduced oil usage, driving the price down further than if OPEC thought it would.

[Big Guy]

I agree. I would also increase the HST by 2% to where it was before. We need the money for infrastructure spending.

[Boges]

I agree. I would also increase the HST by 2% to where it was before. We need the money for infrastructure spending.

But it'll just go to hiring more civil servants.

[Argus]

The problem with Socialists is there is never an end to the number of 'good' things they want to do with other people's money, nor ever an end to their determination to take as much of that money from other people as possible. After all, they can use your money more wisely than you can.

What they have never seemed to understand, however, is that the more you tax people, the less they spend. The less they spend in a consumer economy, the poorer the economy becomes. The poorer the economy becomes, the less tax money flows to the government. So increasing taxes too much can actually wind up bringing the government LESS money, not more.

Of course, their answer to that is to simply increase taxes again...

Edited February 16, 2016 by Argus

[cybercoma]

As opposed to Conservatives who like to give other people's money to businesses, removing the ability of the market to signal demand and causing those businesses to stuff all that money under their mattresses until people are able to spend again, which of course never happens under a Conservative corporate welfare government.

[overthere]

Raise it by $1 per liter at least.

Bombardier and Coderre will need at least that much.

[ironstone]

The more money the government gets,the more likely they are to squander it.High taxes are not helpful in a struggling economy.Lowering taxes will encourage people to spend and invest more.

[msj]

Raise it by 25 cents.

Lower the bottom income tax bracket from 15% to 14%.

Voila: taxing consumption, taxing carbon, lowing income taxes, gives Trudeau further political capital to build the pipeline out east.

[Argus]

Raise it by 25 cents.

Lower the bottom income tax bracket from 15% to 14%.

Voila: taxing consumption, taxing carbon, lowing income taxes, gives Trudeau further political capital to build the pipeline out east.

The lower tier of Canadian income earners already pay too little taxes. The bottom 30% pay none. The bottom 50% pay only 4% of all income taxes. If you don't pay income taxes you have little care or interest in electing a government which safeguards those taxes and doesn't waste them. Instead your interests lie in electing a government which will spend like money is going out of style. Hey, it's no skin off your nose. We already have too many voters who pay very little attention to what is going on. The last thing we need is to increase the number of voters whose interests lie in government spending as much money as possible, regardless of deficits or taxation levels.

Edited February 17, 2016 by Argus

[cybercoma]

It's been pointed out repeatedly that you're completely wrong when you say the bottom 30% pay no taxes. They pay consumption taxes like GST, PST, and HST, as well as excises on fuel, tobacco, and alcohol. They pay service fees to the government that everyone else pays (eg, license registration, plates, parking fines). The measly pittance they get in "GST cheques" doesn't come anywhere near covering what they pay.

[msj]

The lower tier of Canadian income earners already pay too little taxes. The bottom 30% pay none. The bottom 50% pay only 4% of all income taxes. If you don't pay income taxes you have little care or interest in electing a government which safeguards those taxes and doesn't waste them. Instead your interests lie in electing a government which will spend like money is going out of style. Hey, it's no skin off your nose. We already have too many voters who pay very little attention to what is going on. The last thing we need is to increase the number of voters whose interests lie in government spending as much money as possible, regardless of deficits or taxation levels.

Where does it say one must pay income taxes in order to vote?

Canada wisely chooses to tax on a broad basis: consumption, tariffs, income, fees.

Any citizen should be free to vote, or not, whether they pay net taxes into the coffers, or not.

Most people move up and down the tax brackets throughout their lives.

As a tax accountant I see it all the time: Jonny went to school for several years and paid no taxes. Now he's making $100,000 per year. Then he takes a year off to find himself in Timbuktu, pulls out some savings from his RRSP (tax free $10,000) and the rest from his TFSA.

Then he goes back to work, makes good dough, gets laid off for a few months, lands somewhere, makes less money, etc etc.

Happens to people all the time.

As for deficits and government spending: this is a tax shift from income taxes to consumption taxes. There is no assumption that this should lead to more taxation necessarily nor more spending.

BC has done this many years ago and we are producing balanced budgets more or less with reasonable taxation levels (except for MSP premiums, gggrrrrr).

[msj]

. The measly pittance they get in "GST cheques" doesn't come anywhere near covering what they pay.

Well if a person who is making, say, $20,000 per year does not choose to buy cigarettes or alcohol, then, yes that $415 that this single person without children receives most certainly makes up for the GST he/she may be paying out of pocket.

After all, many groceries, rents, and other items are GST exempt.

Even if it does make up for every last cent I still think this person deserves to vote though.

[cybercoma]

I find it pretty unlikely that the combined taxes a person making $20k a year pays is less than $400.

[msj]

I find it pretty unlikely that the combined taxes a person making $20k a year pays is less than $400.

Sorry, I meant for a single parent making $20,000 with one kid. In BC that would be zero income taxes (federal/BC - technically a $10 refund from the working income tax benefit), GST credit of $687, PST amount of $231 plus a child tax benefit amount of $3,750.

On a net basis, clearly this person not only is not paying any income taxes but is effectively not paying any GST.

I agree that there is the chance that the PST nets out in favour of the government.

But overall, this person is effectively not paying most taxes and is obviously receiving more from the government (thanks to the CTB).

This is the type of person Argus would like to strip of their right to vote. A position I think you and I both disagree with.

The fact that we have a system that is set up to provide material transfers to the poor is a fact.

A fact that I agree with.

Let's use another example: a senior couple making $6,600 in OAS each, $4,400 each from CPP and GIS of $3,000 each.

Here they pay no income taxes despite earning $28,000.

They get GST credit of $544 and PST of $231.

This couple would have to spend more than $10,880 on GST taxable items before the GST they pay is more than the credit they receive. Possible, yes.

But, once again, they are receiving their OAS and the GIS amounts which are transfers from the government.

I think that these people (who really do exist) are also on Argus' hit list.

[Bryan]

I don't think it's necessarily a bad idea to make paying tax a requirement to be able to vote. If you take more from the government than you give back, maybe you should be exempt from voting until that situation changes.

Of course, that would also mean that government employees would all be exempt from voting too, since they take far more in from government revenues than they contribute to.

Edited February 17, 2016 by Bryan

[Boges]

I don't think it's necessarily a bad idea to make paying tax a requirement to be able to vote. If you take more from the government than you give back, maybe you should be exempt from voting until that situation changes.

Of course, that would also mean that government employees would all be exempt from voting too, since they take far more in from government revenues than they contribute to.

Excellent idea. Public servant only have one goal. Grow government.

[Argus]

Any citizen should be free to vote, or not, whether they pay net taxes into the coffers, or not.

My point is the higher the percentage of voters who don't need to care about how much government taxes and spends the more screwed up that government will be.

Most people move up and down the tax brackets throughout their lives.

Usually not that far. If you're working in Wal-Mart at thirty, you're probably not scanning the investment pages of the Financial Post at forty or fifty.

As a tax accountant I see it all the time:

Do poor people seek much assistance from tax accountants?

As for deficits and government spending: this is a tax shift from income taxes to consumption taxes.

No, it's not. If it was simply a shift from income taxes to consumption taxes you'd be lowering income taxes generally, not lowering taxes on only the lowest tax bracket. This is a further offloading of taxation from lower income Canadians. While I agree with the theory of a progressive tax system I do not like the fact people pay little or nothing. That gives them no responsibility for the government they elect.

[GostHacked]

I think what people on the left, don't want to admit is that technology has already greatly reduced oil usage, driving the price down further than if OPEC thought it would.

The left-right ideology does not come into play much if at all when talking about the money. I would say we are using MORE oil on a daily basis. More cars on the road all the time. The biggest area oil is used is plastics. Oil is not just used for transportation and manufacturing and packaging, in many cases it is the product too in the form of throw away or so called 'recyclable' materials.

[Argus]

But overall, this person is effectively not paying most taxes and is obviously receiving more from the government (thanks to the CTB).

This is the type of person Argus would like to strip of their right to vote. A position I think you and I both disagree with.

You are bringing a different argument into this topic where it has not been raised.

[Bonam]

...

This is the type of person Argus would like to strip of their right to vote. A position I think you and I both disagree with.

I don't think Argus mentioned stripping anyone of the right to vote anywhere.

Rather, his point was that voters that don't pay any net tax don't have as much reason to care about how taxes are spent, compared to voters who pay tax. Therefore, if a large fraction of the voter base doesn't pay any net tax, he reasons that the wise spending of tax dollars will not be among their highest priorities in electing a government. The implied solution to this is not to strip anyone of the right to vote, but instead to modify the tax system so that everyone has some "skin in the game", even if it's a relatively small amount.