[iggy_oi]

Originally Posted by Fuzz

That's the same line dragged out by people against the carbon tax rebate, even though it is pre-paid. But it's paid out quarterly as well, so I find this argument kind of silly. You qualify at 19, and maybe start getting it then. I'm sure most people do. As you earn more, you stop qualifying. If you earn less, you qualify. So at times you are getting it while not deserving it. But I'd imagine in general those getting it have never not got it(other than retirees?) for the most part? The reality is, with the quarterly payment the worst you would ever be is out ~$116 over 3 months, but that would apply to very few people.

I don't think any working poor would be upset about getting a bigger rebate than they pay out, which is probably almost universally the case, unless you can show a financial illustration where it is not that would apply to more than 10 people.

Originally Posted by bizaro86

Doubling down on being wrong, alrighty then.

That $14,000 income earner who pays no income tax. Let's assume they spend a total of $500/month on rent (clearly with roommates etc). That's pretty frugal, and uses up $6k per year.

According to a Dalhousie study (https://cdn.dal.ca/content/dam/dalho...23_Digital.pdf)

A Canadian woman aged 19-30 spent $3564 on average on groceries in 2022. Food price inflation has been high so I'd expect 2023 to be more, but we're assuming someone who is both low income and very frugal on zero-rated items here, so lets assume only $3000/year of groceries. That gets our hypothetical low income person to $9k per year in zero rated/exempt supplies.

I'm also neglecting possible expenses that are exempt or zero rated in other categories (public transit, feminine hygiene products, bank fees) that would bump that number up.

That leaves them with $5k per year to spend on taxable goods and services, on which they'd spend $250 in GST and receive the $467 rebate.

If the GST doubled, they'd spend (at most) $500 in GST and receive a $934 rebate, being better off per year by $217. An extra $217 matters to someone at that income bracket.

In terms of interest, if we assume they borrowed to pay the first quarters GST at the maximum legal rate of 32% and then used the first quarters rebate to pay the second quarters GST and so on, they'd have $125 of high interest debt in perpetuity. That would add $40 in annual costs, making the net benefit to that person $177 per year.

Anyway, I'm curious which of my assumptions you think are wrong here to justify someone at this income level being worse off under a higher consumption tax/lower income tax regime? Because I can't see how spending less on food and shelter is very likely...

Fuzz touches on part of the issue in his first post, but firstly you don’t start getting these rebates right out of the gate when you enter the workforce. This puts low income earners behind to start. While I’d agree that the number of people who would be negatively impacted by this would not make up the majority of people who collect GST rebates, those people who are affected are societies most vulnerable and in my opinion any discussion around policies to help lower income Canadians should focus on them first.

Bizaro86 your math, while being well presented, is overly simplified as you do not take into account additional spending of non taxable income received through things like government programs. For example a single mother with a baby and an income of $14k would receive roughly an additional $11,000 to spend. If they spend only half of that on taxable items(which seems conservatively low considering the annual costs of raising a child) adding an additional 5% to GST would cost them an additional $275/year. According to your math bizaro86, that would put them at a loss would it not? I’m happy to read any of your takes in response but given that you’ve accused me of being wrong multiple times now I hope you’re at least willing to answer that question.