Quote:
Originally Posted by bizaro86
I think this is a bad idea. I'd increase the GST and use the money to reduce income taxes. The exemption for necessities/low income rebates means the GST is still progressive. It's also harder to avoid for the very rich - they want to buy stuff but can control the level/type of income they generate.
I'd also rather incentivize productivity/income than consumption.
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The GST is just a tax on people who don't have the means to save.
If you are putting 20% of your income into savings every month, then you are only paying 4% GST, while those who live pay to pay pay 5% GST, and often those who manage to save the 20% are able to recoup the 4% they did spend on GST in capital gains before they actually spend down their savings, It's a terrible tax if you fundamentally believe in progressive taxes.
Also in modern service economies the biggest drag on productivity is often demand. If someone is willing to buy it, someone will supply it.