Quote:
Originally Posted by iggy_oi
When it comes to things like this I think the problem goes beyond a lack of understanding by two sides on a made up spectrum. The biggest problem is that the overwhelming majority of people on either “side” don’t understand poverty because they’ve never actually been in it or have really seen it.
Your conclusions aren’t unreasonable based on the calculations you’ve used and I don’t disagree with a lot of what you’re saying but some of the examples you’re using for numbers like rent don’t really accurately reflect the situation for those living in poverty. While $500/month rent seems like a low figure it’s really not for people in poverty who may be living in low income housing for less, people living shelters, etc so to say with certainty that it would be higher isn’t an accurate assessment.
I’m not trying to nitpick or pointing that out to be critical of your arguments or position, I’m pointing it out because I think that it’s very relevant and I know you to be a poster who is typically very analytical and who when presented with facts you may have unintentionally overlooked will actually take the time to reconsider your position.
Also, as you stated and proved, using your figures having the one child reduces the overall benefit of GST rebates. That’s despite a 75% increase from $467 to $821 to the GST rebate. Had you continued to look further you’d see that if that same person has a second child, then despite receiving double in child tax benefits they only see a 20% increase from $821 to $992 in GST rebate.
So while the increase to non GST exempt spending on items needed to raise that child would be consistent with the increase for the first child, the GST credit isn’t as high. Meanwhile life is getting far more challenging for that person who is now living in a far more precarious situation where the likelihood of a random unexpected expense arising, doubling the tax that person has to pay at that moment when they are already broke, even if they know they’ll get it back later, can be devastating if they simply don’t have it.
Like you said $200 is a lot of money for a low income earner, and so is the additional 5% in tax they’d have to pay in an emergency on a non GST exempt item that costs the same.
On paper it looks great and in most situations the GST rebates work, but for the most at risk in society it’s not always practical as is and doubling it will make things more difficult for those already falling through the cracks. That number is certainly higher than the 10 Fuzz tried to downplay it as.
We haven’t even brought up the vulnerable people who still have to buy things they pay taxes on but may not have the ability to file their taxes and therefore don’t receive a rebate. I would hope we can all(even Slava) at least agree that those people aren’t going to benefiting by doubling the amount of GST that they pay.
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Community based housing in Alberta is at 30% of income. For the hypothetical single parent with one kid example we worked through that would work out to $625/month. So even if they could get into community supported housing by my calculation they'd be paying more (non gst attracting) rent. Market rent would be at least that. Shelters would be less, but hopefully that wouldn't be necessary at this income level.
You're correct that adding more kids moves the numbers, although I'd comment that there are some practical limits to how many kids under 6 one single parent is likely to end up with at a time, and kids over 6 get a much smaller child benefit so they move the numbers the other way. Without running the numbers again I concur that 3 kids under 6 and a maximum non-taxable income in a single parent family would be better off under the current system than a double gst/double credits system. However, as part of the change you could increase the gst credit slightly for kids to eliminate this edge case.
I also want to be clear that I understand being poor sucks. This wouldn't fix that. I'm not poor, so while I sympathize I probably can't truly empathize. However I do think this change would help low income people.
I dont think it would help the homeless, because they mostly have problems that aren't the type that tax policy can solve. Someone who has mental illness, addictions, etc doesn't have a problem that the CRA can fix. We have a thread on that already, but basically I don't think taxes moves the needle there either way. And hopefully the extra couple hundred dollars this would give low income folks helps keep them off the streets and in safe housing.