Should we Spend or Save the Surplus?

[SamStranger]

hey everybody, thanks to the folks who welcomed me back... I missed you guys

Anyways, I think some people here are a tad bit confused. I think, the greatest ways to reduce taxes for Lower Middle Class to High Middle Class is to reduce the GST (or eliminate it) and to reduce how much Federal Tax they take off of each check (income tax) Now... the proposed Liberal Income tax of lowering the bracket from 16% to 15% is a bloody joke. It would save me, personally, around $415 a year, which equals out to about $15.90 less in taxes every two weeks... THATS HARDLY A TAX CUT! If they want to lower Income Taxes they should do it DRAMATICALLY. We have a surplus. Why not lower the bracket 16% to 13%, then we'll save around $900 a year, atleast thats something... right?

The GST is a horrible tax. I strongly think they should eleiminate it 2% right away, then move towards totally getting rid of it in the upcomming election.

I guesse we'll wait till 4pm today to here the final details, eh.

[Hicksey]

I think that we should cut the overall tax rate to 40% including all taxes from all levels of government and cap it there. I think we should cut fat until we're paying down significant deby every year. I think we should set a moratorium on new social programs unless they can be funded under the tax cap.

To truly help the poor we should make our first $20,000 income tax free, but not CPP and EI premium free as these programs cost mega-money and if you want to access them you should be paying.

[geoffrey]

Raising the personal exemption is a great idea. It's more effective a measure than tax cuts of any sort.

[Hicksey]

Raising the personal exemption is a great idea. It's more effective a measure than tax cuts of any sort.

If the Liberals really cared about the poor and disadvantaged they'd have implemented this kind of exemption years ago. Instead they continue to culivate class envy and just keep up with their inefficient and ineffective plan of redistributing wealth.

All that stupidity when the smartest and most effective solution was just to let them keep what they earn.

[Renegade]

Personally I think income tax should be a flat tax, with minimal exemptions. It's the complex nature of tax law and the differential treatment of employed vs self-employed vs business which cause a lot of disparities.

A flat tax would solve the issue of income-splitting, and the inequity caused between families of one earner vs familiies of two earners.

GST should be amended so that there are no exemptions and raised. The additional amounts generated should be used to lower income tax.

Debt repayment should be mandatory even if services are cut.

[Riverwind]

Personally I think income tax should be a flat tax, with minimal exemptions. It's the complex nature of tax law and the differential treatment of employed vs self-employed vs business which cause a lot of disparities.

Canadian tax law is not that complex compared to the US. The major deductions in Canada are: childcare, tuition, medical, RRSP, charities and caregiver credits. Deductions that self-employed get for vehicles and similar expense are required to earn money and are no different that allowing a restaurant to deduct the cost of food the purchase.

[Leafless]

SamStranger

You wrote- " TheGST is a horrible tax"

The GST was introduced in the 90's when the country was in a deep recession and replaced the hidded FST and included many more items including most ready to eat foods.

The GST is a multi-level tax with manufacturers at different levels ending up not paying a cent of GST with the consumer bearing the cost of the whole GST.

According to government we are no longer in a deep recession so the GST should be scrapped all together or returned to the way it was before incoporating the FST.

[Renegade]

Personally I think income tax should be a flat tax, with minimal exemptions. It's the complex nature of tax law and the differential treatment of employed vs self-employed vs business which cause a lot of disparities.

Canadian tax law is not that complex compared to the US. The major deductions in Canada are: childcare, tuition, medical, RRSP, charities and caregiver credits.

No doubt. I certainly don't hold up the US as the model of what a tax structure should look like.

Deductions that self-employed get for vehicles and similar expense are required to earn money and are no different that allowing a restaurant to deduct the cost of food the purchase.

The employed incur expenses as well which are required to earn money (food, clothing, housing, transportation). They don't get to deduct that. The basic personal exemption doesn't even begin to cover it.

I'd like to be taxed the same way as a resturant too. (ie what I have left over after expenses), but that is not the way tax law is structured.

[fixer1]

I would like to see the GST be included on everything including food and health services. It should be raised to 18 % and we should scrap the income taxes completely. That way the provinces could add their sales tax at even a higher rate then now and scrap their income taxes as well. It would mean that every Canadian person no matter if they worked or not would pay proably in the area of 30% in taxes. There would be no cheaters and it would make our cost of living a much better place.

[August1991]

To go further, it is basically impossible for the federal government to know whether it is in deficit or not. For political reasons, the budget tomorrow will likely present a small surplus but it could just as easily present a deficit under different calculations. Why? The government has obligatory payments into the future (pensions for example) and if these payments are discounted to the present, it is easy to show a current budgetary deficit.

A budget deficit/surplus is now a PR exercice and little else.

Yeeeeeesh, what a load of crap.

As much as what you suggest *could* happen ... it really wouldn't. Ever.

Believe it or not, Government cannot do whatever it wants with the way it presents financial figures.

No accountant would sign off on accounting for futurre payments in a current year. It would not be accepted and Bay Street would simply perform the calculations and the real figure would become the conventional wisdom. The Finance Minister would lose such credibility that it would materially effect the market's confidence in the Government (and the economy as a result).

There is no credibile scenario for presenting a budget surplus in the way you outline.

Shoop, I simply can't let your response go unanswered.

You view the government as if it were a corporation or household. It's not. This does not mean that governments can defy gravity. They can't. (I'm beginning to believe that few mortals have a correct undertstanding of government.)

Believe it or not, Shoop, governments can do whatever they want with financial figures in large part because governments can do whatever they want with revenue and expenditures streams. (We just saw today the federal government change taxes and expenditures at will.)

For this reason, the accounts of government cannot be handled like a corporation or an individual. Many future liabilities are excluded. You are welcome to look through the budget papers prepared by Finance officials and you may find a purely arbitrary number described as "budget surplus" based on an equally arbitrary list of revenues and expenditures. (Although I doubt you will because federal budgets are not usually prepared in such a manner. BTW, many of the numbers thrown about are based on five year projections which make these calculations even more difficult.)

If you don't believe me, read this:

The simple fact is that the deficit is not a well-defined economic concept. The current measure of the deficit, or any measure, is based on arbitrary choices of how to label government receipts and payments. The government can conduct any real economic policy and simultaneously report any size deficit or surplus it wants just through its choice of words. If the government labels receipts as taxes and payments as expenditures, it will report one number for the deficit. If it labels receipts as loans and payments as return of principal and interest, it will report a very different number.

Concise Encyclopedia of Economics

The only reliable measure is the size of government expenditure, and what government buys. All indications suggest that this is increasing as a portion of the economy regardless of what party is in power.

[SamStranger]

I would like to see the GST be included on everything including food and health services. It should be raised to 18 % and we should scrap the income taxes completely. That way the provinces could add their sales tax at even a higher rate then now and scrap their income taxes as well. It would mean that every Canadian person no matter if they worked or not would pay proably in the area of 30% in taxes. There would be no cheaters and it would make our cost of living a much better place.

So I would end up paying $6000 in taxes on a $20 000 car.... am I missing something???

Thats a horrible plan! Who wants 30% tax on everything they buy? On a $30 shirt im gonna pay nearly $13 in tax... thats bogus.

Poor people whould be sooo screwed, paying $6 on $20 groceries, that $6 could have bought them 3 loafs of bread to feed their starving children.

I think the GST should be gone, income taxes should be lowered. Social programs should be Cut, and spending should be cut. Thats the best way to insure Canadian Families.

I quote John Tory:

"We should cut taxes, freeze spending, and balance the budget"

[geoffrey]

SamStranger

You wrote- " TheGST is a horrible tax"

The GST was introduced in the 90's when the country was in a deep recession and replaced the hidded FST and included many more items including most ready to eat foods.

The GST is a multi-level tax with manufacturers at different levels ending up not paying a cent of GST with the consumer bearing the cost of the whole GST.

According to government we are no longer in a deep recession so the GST should be scrapped all together or returned to the way it was before incoporating the FST.

Consumers pay the price of all taxes. That has to be the biggest ignorance of the left. They think you can tax corporations without hurting everyday people. Well, I'll let you in on a little secret, you pay corporate tax increases through increased prices. You paid for the MST. You and I pay ever tax imposed on society.

In return we get less, more expensive goods. Both producers and consumers lose out (read: deadweight loss).

A corporate tax cut can be as, or even more, effective than any personal reduction. Not only does it create room for prices to be more competitive, but attracts foreign investment and creates jobs. Corporate cuts are the best way to stimulate the economy and put some money back in people's pockets.

There is a reason that Sweden can stay competitive despite its ridiculous labour laws, its their 8% corporate tax rate.

[GostHacked]

I don't want them to cut the GST. It did help us get out of a recession. Why not just keep going with that? National Debt.

And there really is no surplus to speak of. If the National Debt still exists then we really have no surplus. Surplus in terms of money left over from the budget, but any normal family would rather put that extra money on the mortgage of their house or other debts and or invest it somehow. So they do not really see that money for long.

Same thing with Canada replacing the family home. We all live in this same house and we all must pay for the house.

I say keep the money for now, and if it requires spending then consider it, otherwise throw it to the national debt, because overall there is no surplus.

[geoffrey]

The GST didn't help us out of a recession. It was a tax that helped us out of deficit. We are no longer in deficit, time for us to get our money back!

[shoop]

There is that space on your income tax form to donate money to pay down the National Debt. How much have you taken advantage of that option in the past? Perhaps you could figure out how much you save in GST this year and donate that amount with your income tax next year....

I don't want them to cut the GST. It did help us get out of a recession. Why not just keep going with that? National Debt.

[GostHacked]

There is that space on your income tax form to donate money to pay down the National Debt. How much have you taken advantage of that option in the past? Perhaps you could figure out how much you save in GST this year and donate that amount with your income tax next year....

I don't want them to cut the GST. It did help us get out of a recession. Why not just keep going with that? National Debt.

For one the extra money or 'surplus' I would get would go to my own personal debt. And the amount of money I would save in GST would maybe buy me an ice cream cone.

http://www.cbc.ca/story/business/national/...eax-060503.html

If this is true, then there are no savings here at all, since it would cost retailers lots of money to adjust their systems for the new tax.