Quote:
Originally Posted by Bunk
Wouldn't that drive a lot of out of province spending, especially on big items like automobiles?
Also, isn't a consumption tax system (without income taxes) regressive in the sense that it places a disproportionate burden on those that don't/can't save a lot (low income?). Low income earners have to consume large proportion of their incomes just on necessities of life. Wouldn't a lowered income tax rate and no (or low) consumption tax help them more?
|
Well there could be some people who will buy big ticket items out of province, so that is a potential issue. It depends where and what of course. Some of this goes on anyway from time to time.
As far as the regressive part, this can be dealt with. We do this with the GST already where necessities aren't taxed and other items are. So if you're spending most of your income on food, you won't have the extra burden. People buying video games or TVs or Cars though would have the extra taxes.
Its important to note that this wouldn't increase taxes; the point is to offset the current tax collected and that's it. In other words citizens are paying the same amount of tax as before only under a different system of collecting those taxes.