Canada Day means GST cut

[Simpleton]

Re: RE: Canada Day means GST cut

Low income people will STILL get the rebate.....I believe.

I assumed that the GST rebate will decrease proportionately. I could be wrong. I couldn't find any answers about this on the Canada Revenue Agency website. Anyone know the answer?

I don't know the answer, but I can speculate. My guess will be that the Conservative government will not touch the GST rebates while they remain a minority government.

My Rationale:

The Conservative party, which is a hybrid of the former Progressive Conservatives and Reform parties, is trying very hard to appear as a moderate party that can govern fairly, without being overly biased toward business and higher income individuals. After almost a decade and a half of Liberal rule in Ottawa, and years of fighting Liberal propaganda and scare tactics, the Conservative party wants to demonstrate that they can be the nice guys. The good guys. The caring guys.

When you consider that the Conservative party only won this minority government on the heels of great public discontent, you would expect that the Conservatives are strategically calculating a plan for the next federal election. I would not expect to see any minority government strip Canadians of their GST rebates. Much less a minority government that is still fighting malevolent public perceptions in the provinces of Ontario and Quebec.

 

[gc]

Re: RE: Canada Day means GST cut

You don't have a phone? Phone service is taxed GST.

Yes I do, and that is where I pay the majority of my GST. At about $100-$150 a year for a phone, I save about a buck or buck and half. Yipee.

You don't have electricity? The power company charges GST. You don't have an Internet Service Provider? ISPs charge GST.

Do you have cable television or a satellite dish? Both are services that taxed by the GST.

All these are included in my rent, so I won't benefit from the cut in GST.

And for the record, GST rebate payments are paid quarterly. The first installment arrives in July, the second in October, the third in January, and the final payment is given in April. The GST rebate is a relative pittance, when you fail to grasp the full spectrum of goods and services to which the tax is applied.

Yes I realized it is quarterly after I posted...so what difference does it make if it's annually or quarterly? Also you didn't answer my question: Do you know if the GST rebate will decrease along with the GST, or stay the same? If it decreases as well, then I won't benefit at all from the GST cut. If it stays the same, I might save $5 a year...but I'll be paying an extra $150 in income taxes.

EDIT: Oops, didn't see your post above. Ignore this.

Ever buy a snack food?

Rarely.

A video game?

No.

A piece of furniture?

Garage sales don't charge GST.

Ever rent a movie?

Rarely.

Attend a sporting event or a concert?

No.

The GST is as pervasive as humanity in Canada. If you're alive, you pay the GST.

I pay a lot more in income tax than GST, I would much rather see a decrease in income tax.

 

[Mogz]

RE: Canada Day means GST

Are you kidding. I held off getting gas today (ran my tank until the light came on) so I can get gas tomorrow and see. I know it'll be a drop in the bucket, but i'll feel all warm and fuzzy.......

 

[BitWhys]

Re: RE: Canada Day means GST

bunch of tinkerputt nonsense that may as well have been handed straight to the banks and probably should have been since at least that way it would have called markers.

The way to measure a tax cut is to ponder the howling if it was an equal tax increase.

GST change to 8% anyone?

so what's your point?

 

[Vicious]

Re: RE: Canada Day means GST

bunch of tinkerputt nonsense that may as well have been handed straight to the banks and probably should have been since at least that way it would have called markers.

The way to measure a tax cut is to ponder the howling if it was an equal tax increase.

GST change to 8% anyone?

so what's your point?

You're telling me you don't understand my statement? I thought you were reasonably intelligent.

 

[BitWhys]

RE: Canada Day means GST

I'm telling you that you don't understand mine if you think it has anything to do with popularity.

 

[yballa09]

The GST cut of 1% really doesn't add up to a whole lot, but I think it is a step in the right direction. Sooner or later, I hope it can be completely gone, and by taking it down to 5% in another year I think it will be noticeable.

And remember, the Liberal's budget that cut the lowest income tax bracket from 16-15% was right before the election was called. This tax was in for how long, a few months before the Liberals were defeated? After how many years of massive surpluses? I wouldn't doubt that in due time this lowest tax bracket, under a Tory gov't, will drop even more, along with the GST, I just think that Harper had this GST cut planned before the Liberals decided to drop the income tax, and the GSt cut would have not work if he kept the last ditched effort cut by the Liberals. All in all, whoever claims they are now losing more money from these new tax breaks never had the old Liberal breaks for longer than a few months.

 

[Vicious]

Re: RE: Canada Day means GST

I'm telling you that you don't understand mine if you think it has anything to do with popularity.

Well that is more likely.
I understood the phase

bunch of tinkerputt nonsense

as you were against the tax cut.

I didn't interpret your statement as one about the popularity of the tax cut. In fact the bit about the banks and markers lost me. If you are saying that the banks will benefit most from the GST cut I would extend that to business that already include GST in the price.

If you are saying that the Conservatives paid off the banks with the GST cut I'm not sure what the Cons got in return.

In fact it sounds like your hatred/fear of the Conservatives has lead you to that conclusion. If you see keeping a campaign province as some pay back to the banks.

I know most of the centre left never expect a campaign promise to be kept. If you are a blue dipper (I think you referred to yourself as that once) you are quite happy with promises being made that will never have to be kept.

My point. Any tax cut is good. I don't understand peope who complain about a tax cut.

 

[BitWhys]

RE: Canada Day means GST

do you know who holds most of the Federal debt? are you aware that paying off said debt effectively offsets lack of savings? are you also aware that the last thing we need this days is more upwards pressure in the exchange rate?

considering you think "any tax cut is good" its safe to conclude you don't.

but "it sounds like" you know all about me based on the phrase "tinkerputt nonsense". I suggest you quit analyzing yourself in public.

 

[LittleRunningGag]

RE: Canada Day means GST

The lost revenue should have been used to pay down the federal debt.

If there needed to be a tax cut it should have been in income taxes. Consumption taxes are the fairest way to tax as they only tax what you spend, not what you earn. So instead of being penalised for being a productive member of society, you are only penalised when you spend your earnings.

If anything the GST should be increased and income tax reduced. We are moving in the wrong direction.

 

[BitWhys]

Like I already said, the timing stinks. We DON'T need an influx of consumer dollars in the economy right now. In fact its the last thing we need. In the context of our current situation, the time to roll back taxes is, IMO, when we need an economic stimulus (ie. recession), the GST being a great mechanism for that since it puts money in people's pockets right away.

All I see is Harper screwing up Plan A to get a few votes. More than one economist has said: good politics, bad policy.

I've got no problem with a rolling surplus as long as our economy is healthy which by all accounts, although it can change, it certainly is. Slap a good chunk on the debt and pass out some candy; you earned it. sort of.

bloody hell, even the OECD says Harper's toying with the wrong revenue source. I'm still trying to get my head around that one. :lol:

 

[Toro]

From an economic standpoint, this tax cut is a decent but sub-optimal policy that is poorly timed, at least in textbook economics. But it is good politics, and in fact may be more positive than economists think if people still have a high aversion and resentment to paying the tax. However, we'll assume that the textbooks are correct and it is sub-optimal.

Remember that the Liberals were offering to cut taxes as well, so the macroeconomic consumer effect would have been more of less the same (though the Liberal policy was probably a bit better).

Most - but not all - of the time, its better to cut taxes than increase spending, given the level of government spending in Canada. But any tax cut should have been saved for a recession.

An income tax cut would have been more efficient. Taxing income distorts resource allocation more so than sales taxes because income taxes take resources out of consumers hands before the individual has allocated his resources to the source where he is most likely to optimize utility. Sales taxes do not cause this distorting effect since the individual is optimizing his utility at the point of purchase.

However, because the wealthy consume relatively less than the poor, taxes on consumption hurt the poor relatively more than the wealthy. You can design a system to lessen this effect - i.e. no tax on food or shelter - which alleviates this. But even after that, it is still likely to hurt people with less income than more.

EDIT - There are some on the Right in the US who are calling for an end to the income tax, and it being replaced by a sales/consumption tax.

 

[BitWhys]

RE: Canada Day means GST

bump

although I will add on edit that I think that if "we" were bound and determined to cut taxes (not an entirely bad idea in the current climate) what "we" should have done is look at that arm's length of surtaxes and and other clutter that's built up over the years and considered cleaning some of that crap up. bad politics. good policy.

and being a blue dipper I'll add that the study would include how to redeploy the public servants who babysit whatever stupid one-offs we cleared up effectively.

 

[LittleRunningGag]

However, because the wealthy consume relatively less than the poor, taxes on consumption hurt the poor relatively more than the wealthy. You can design a system to lessen this effect - i.e. no tax on food or shelter - which alleviates this. But even after that, it is still likely to hurt people with less income than more.

If the poor are only spending money on neccessities, they will pay zero tax under a consumption tax (if it works the same way as the GST does). It is only the left over income that they would be taxed on. That seems fair to me.

 

[BitWhys]

RE: Canada Day means GST

Taxes are not the solution to the problems of "the poor". I'd be more interested in entertaining ideas how to rattle up all the dead weight "the rich" managed to squirrel away.

 

[notme01]

the joke is on us they lower one tax but increase another so it almost equals out in amount spend on taxes it just politics a big ad for lowering the taxes (they want power again) but a very small print for the increase

 

[Vicious]

Re: RE: Canada Day means GST

bump

although I will add on edit that I think that if "we" were bound and determined to cut taxes (not an entirely bad idea in the current climate) what "we" should have done is look at that arm's length of surtaxes and and other clutter that's built up over the years and considered cleaning some of that crap up. bad politics. good policy.

and being a blue dipper I'll add that the study would include how to redeploy the public servants who babysit whatever stupid one-offs we cleared up effectively.

I can agree with your points on clutter and public servants. I even agree with your bad politics good policy thoughts. However, you can't forget that it's not economists who can make these changes, it's politicians and all they care about is politics. So politics will win the day every time. I will take my tax cuts on any form of tax. I would like an income tax cut too. But I'll take a GST cut anyday of the week. As you have already guessed I'm no economics major. I don't care about the timing of the tax cuts. I'll take em when I can get them.

 

[Vicious]

Re: RE: Canada Day means GST cut

the joke is on us they lower one tax but increase another so it almost equals out in amount spend on taxes it just politics a big ad for lowering the taxes (they want power again) but a very small print for the increase

I cannot understand why the conservatives would add that half percent to the lowest income tax bracket. I guess it allowed them to keep the GST promise, and allow them to spend on the military as they promised. But, I think it just looks mean; cut a bit off most types of tax but increase the lowest bracket. The increase costs all income earners but looks like a shot at the lower income folks. Hopefully they will correct that mistake next budget.

 

[notme01]

Hopefully they will correct that mistake next budget.

hahahahaha what a joke