Quote:
Originally Posted by iggy_oi
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.
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Sure - that would definitely get them closer - any non-taxable number you add to spending makes higher consumption taxes less favorable. I'd comment that the GST rebate actually goes up with a child. I'll go throught the math again and see whether that makes a big enough difference to swing the result.
I found the same benefit calculator I think it's likely you used to determine that number, and of the $11k per year $205.25 per quarter is a GST rebate, or $821/year, so I'll use that for the GST rebate portion.
So let's re-run the numbers for your scenario. $14k+11k tax benefits is $25k total cash. Now we have a kid involved, which probably makes it harder to find shared accommodations at $500/month. Let's be very aggressive and assume we're still sharing rent somehow at $500/month. I think this is almost certainly going to be higher but a lower number benefits your side of the argument so I'll assume the roommates were cool with having the kid stay for no extra rent split. So keep the same $6k.
To get that level of subsidy the child has to be under 6 years old (the subsidy goes down once the gov't assumes they're in school). So lets take our $3k/year food cost and add a single child from the ages 1-3 category from the report I linked above, rounding down to $2200. This is generous to your cause, as both younger and older groups are more expensive according to the report. That gets us to $5200/year in food.
So a total of $11,200/year of exempt/zero rated spending. You've specified a single mom so some of the other exempt categories almost certainly apply eg feminine hygiene products, but we'll assume zero for those (could be a single dad), transit, bank fees, medical, etc as well to benefit your case.
That leaves $25k - $11.2k = $13,8000 of spending that attracts GST, or $690 of GST paid. Still less than the $821 GST rebate per year, so this hypothetical person with all assumptions maximized in favor of this not working still benefits from a doubling in GST/GST credits.
Basically, I still think you're wrong and while I took the time to go through the math on what is likely the most favorable situation to your opinion I don't think you can get there (and my rent assumption especially is pretty generous I think - I suspect a single mom+toddler would have a very hard time finding something at $500/month).
I actually think this is symptomatic of a major problem in our public discourse. Many people on the left care about people but haven't reliably costed their ideas to see whether they'll actually benefit the people they're trying to help. And many on the right are good at math but don't give a #### about people, especially poor people. I really believe that when you're considering public policy change how it quantitatively affects the most vulnerable in society over the long term should be a key factor, and I think higher consumption taxes paired with increased tax credits would absolutely help that demographic.