Complete Removal of the GST

[August1991]

I don't buy that. In a competitive market you would be giving all your competitors a 2% price advantage.

If the GST is added after to the price then the savings are immediate because the posted price does not have to change. However, if it was included in the price the reduction would not happen immediately because the marketplace is not that competitive. In many cases it would not happen at all. We are better off with tax added after the price.

By that logic Sparhawk, stores should be able to raise their prices now and make more money.

When you say that "the marketplace is not that competitive", you must be wrong. Unless they are charities, sellers will always keep raising their prices to make more profits until any more price rises will be held in check by competition. In this sense, competition is the wrong word. It's the availability of an alternative.

I think it's fair to say that all sellers try to get the highest price they can. Do you agree?

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When the Tories brought in the GST, they deliberately made it visible to consumers for political reasons. They knew that a hidden tax is easy to raise and difficult for voters to know about. VAT in Europe is hidden and is around 30%. The visible combined GST/PST is around 15% and no political party would dare raise it. In fact, it's an attractive tax to cut because of its visibility - as teh Tories have discovered.

I just wish the consumption taxes were included in the price. Doing all this mental math to figure out how much money you need to actually pay for something is nuts. You know how much of the price is tax. In the case of fuel where unlike other consumer items, we are paying a tax on top of a tax, it is included.

Despite what I posted above, I agree with you Wilbur. It's never clear how much something will really cost and the pennies are irritating for small purchases. It makes it difficult for comparison shopping. IME, only in North America is the price one pays different from the price posted.

Your example of gasoline is how all purchases should be, IMV. In Quebec, the SAQ (liquor store) also includes all taxes in the price.

[geoffrey]

I'm actually pretty sure you can include the GST if you wish. I think its pressure the companies are putting on the Federal government, everytime you go to pay you see the government taking its share.

[Wilber]

"If the GST is added after to the price then the savings are immediate because the posted price does not have to change. However, if it was included in the price the reduction would not happen immediately because the marketplace is not that competitive. In many cases it would not happen at all. We are better off with tax added after the price."

Tell someone who is in the retail business the market is not that competitive. Business will do what it has to do to keep their customers. Some will do it on price, some on service but the competitive pressure on margins will be the same no matter how the tax is applied or even if it is applied at all.

"When the Tories brought in the GST, they deliberately made it visible to consumers for political reasons. They knew that a hidden tax is easy to raise and difficult for voters to know about. VAT in Europe is hidden and is around 30%. The visible combined GST/PST is around 15% and no political party would dare raise it. In fact, it's an attractive tax to cut because of its visibility - as teh Tories have discovered."

VAT is not hidden, it is just included in the price. Everyone knows how much it is. VAT in the UK is 17% although a few things are 5% and some are exempt. The only one who benefits from hidden taxes is government.

[August1991]

I'm actually pretty sure you can include the GST if you wish. I think its pressure the companies are putting on the Federal government, everytime you go to pay you see the government taking its share.

Mulroney required that the amount of GST be explicitly printed on the receipt. That is not the case in Europe.

[geoffrey]

I'm actually pretty sure you can include the GST if you wish. I think its pressure the companies are putting on the Federal government, everytime you go to pay you see the government taking its share.

Mulroney required that the amount of GST be explicitly printed on the receipt. That is not the case in Europe.

Interesting, my bad.

[Boru]

If the Conservatives win on January 23rd, they will bring the GST from 7% to 6% right away. Then, Id say... around 2008 it will go down to 5%. If Harper runs for a second term in 2010, apart of his plan will be to eliminate the GST completely. The Conservatives (Ironically) are the only party with intent to get rid of it. The Liberals and the NDP love the GST, thats why they will never touch it. 2% in the next 4 years may seem minimal, but rest assured that it will be completely gone by 2010, or the next election-- only If the Conservatives Win.

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Ladies and gentelmen, we have a Conservative caucus insider here.