Quote:
Originally Posted by the_only_turek_fan
I have two questions that I hope get answered....
1. Harper's excise tax cut on diesel.
Now he cut the tax from 0.04 to 0.02. So anyone that produces diesel in Canada now pays two cents less tax, which means that there expenses come down two cents.
Question is, does it mean that these companies will automatically cut there price down by two cents as well? Cause with out them doing that, I don't see how the tax cut helps consumers? If the two cents in savings is trickled down to the consumer, then its a great thing, but does a tax cut necessarily mean that the company producing diesel will charge two cents less?
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Of course they won't... at least not for long. The market value for the product is already set. The companies know what consumers are already willing to pay, and that amount won't change just because they are being taxed less.
Cutting taxes like these never helps the average person. Even the GST cuts are pretty much meaningless to the average person.... but voters fall for them hook, line, and sinker all the time.
The truth is, once a tax on a consumer product is put in place, it rarely makes sense to remove it. The public will just lose the benefit of the tax without seeing any real savings. An income tax break would be more beneficial...