Ottawa on track to beat deficit target

[Jacks]

Originally Posted by Cowboy89

You're missing the other half of the arguement being that economists in general agreed with consumption taxes as opposed to income taxes.

This.

The people, including the opposition, who opposed the GST cuts generally supported other tax cuts in it's place. Either way you still had the lost revenue. You could argue that we should have left all taxes alone but it's hard to say how that would have affected our economic recovery. As it is we are doing pretty good, better then almost any other country, so the plan couldn't have been that bad.

Imagine where the economy and the debt would be if we had left corporate taxes and the GST high and combined that with the Libs carbon tax and even more stimulus spending?

[OBCT]

Here's my question, though, just to play devil's advocate.

If economists were near-unanimously against Harper's GST reduction plan, were they also consistently in favour of a GST increase while the Liberals were in power? If they were, why didn't we hear about that? If not, is there a formula or algorithm that makes 7% the "ideal GST rate" for some reason? Why not raise GST to 10% or 15%? That would benefit the nation's bottom line.

My point is, tax revenue needs to be collected one way or another. In the end, how that's done, while important (for fairness, efficiency, sustainability, etc), is not what matters most. IMO, if the government can balance its budget while working positively for the majority of its citizens, it should be deemed successful within that sector (financials).

Personally, I find the 5% GST rate to be beneficial. I'm relatively lazy, and it makes everyday cost calculations much simpler for me. I imagine it would likewise make retail business owners' lives somewhat easier, too.

Then again, I'm also not the type to complain if the GST was raised to 10% (as long as some other tax(es) were lowered slightly as an offset), because that would make my life easier yet.

[Slava]

Originally Posted by Azure

http://www.theglobeandmail.com/repor...rticle2317307/

Yay?

Slava you might have to reconsider your thread on this subject that you made a while back saying that they should easily be able to balance the budget. Combine this with the pledge made by Harper to cut entitlement spending(about damn time) and Clement saying cuts of up to $8 billion could be made, instead of the $4 billion that he originally said, and we're looking to be in pretty damn good shape.

Interesting note, Paul Martin wanted to restructure OAS back in 1998 but was met with fierce opposition. I guess we'll have to see if Harper gets it done. We can't keep going with what we have. OAS payments will be over $100 billion per year by 2030 with the current rules.

I originally put that thread up because the government said they were not sure that they could meet their targets. I actually want some fiscal conservatism and am not against trying to balance the books. Its good news for Canadians IMO, but there is a point that gets buried here. It looks like a lot of their success so far has been due to BC repaying the $1.9B transition allowance for the HST. That hasn't been repaid at this point and is definitely a one-time thing.

As for the OAS debate that is another issue. Harper hasn't actually said what he plans to do, so we'll see. Talk is of moving the starting age is 67, but we'll see. Awfully interesting that this wasn't forseen during the election campaign!

[Azure]

Originally Posted by opendoor

The United States' problem is more revenue than expenditures. They're using deficit spending to maintain an artificially low tax rate.

Certainly true.

But they can't even commit to an agreement that would cut a measly $1.5 trillion over ten years, which is basically 1/40 of what they would spend over that time.

If they can't agree on what to cut, they certainly won't be able to agree on how to overhaul the tax code to make sure revenues don't fluctuate like crazy every few years.

[Azure]

Originally Posted by Jason14h

None unless you believe the gov't can invest that 2% better then its citizens.

IMO a sales tax like the GST is the most effective way of taxation. Should have kept it at 7%, and lowered other tax rates.

[CaptainCrunch]

Originally Posted by Azure

Certainly true.

But they can't even commit to an agreement that would cut a measly $1.5 trillion over ten years, which is basically 1/40 of what they would spend over that time.

If they can't agree on what to cut, they certainly won't be able to agree on how to overhaul the tax code to make sure revenues don't fluctuate like crazy every few years.

Its going to be interesting to see if the U.S. moves forward with cutting 92,000 military personal and reforming their military at a strategic level

http://bits.blogs.nytimes.com/2012/0...for-the-cloud/


On one hand its a pretty deep series of cuts, on the other hand you're throwing 92,000 people on the streets.

[Azure]

Originally Posted by The Yen Man

I actually do agree with MarhHare though that in the end, cutting the GST was probably not a smart move by the government. On the one hand, I do commend the Harper government for actually delivering on a campaign promise. But realistically, a 1-2% decrease in GST isn't too noticeable to any one person, but the actual additional tax revenues that generates for the government is significant.

Not only that, but you can apply it to certain items, and leave other items alone.

An example being fast food or unhealthy food choices have GST added, while items like groceries not having any GST.

You could specifically target low-income families that way.

Should have kept it at 7%.

[Azure]

Originally Posted by OBCT

Here's my question, though, just to play devil's advocate.

If economists were near-unanimously against Harper's GST reduction plan, were they also consistently in favour of a GST increase while the Liberals were in power? If they were, why didn't we hear about that? If not, is there a formula or algorithm that makes 7% the "ideal GST rate" for some reason? Why not raise GST to 10% or 15%? That would benefit the nation's bottom line.

My point is, tax revenue needs to be collected one way or another. In the end, how that's done, while important (for fairness, efficiency, sustainability, etc), is not what matters most. IMO, if the government can balance its budget while working positively for the majority of its citizens, it should be deemed successful within that sector (financials).

Personally, I find the 5% GST rate to be beneficial. I'm relatively lazy, and it makes everyday cost calculations much simpler for me. I imagine it would likewise make retail business owners' lives somewhat easier, too.

Then again, I'm also not the type to complain if the GST was raised to 10% (as long as some other tax(es) were lowered slightly as an offset), because that would make my life easier yet.

Far as I'm concerned, the GST should be raised to 15%, and other taxes like the income tax cut accordingly to even out revenue lost/revenue gained.

It is by far the most effective way to tax people.

[CaramonLS]

LOL @ CAW actually having an economist.

A union would be the last place I'd expect one of them to end up. Especially given the history of CAW, which generally does not show any regard for 'sustainable' economics for its workers.

[Azure]

Originally Posted by Slava

I originally put that thread up because the government said they were not sure that they could meet their targets. I actually want some fiscal conservatism and am not against trying to balance the books. Its good news for Canadians IMO, but there is a point that gets buried here. It looks like a lot of their success so far has been due to BC repaying the $1.9B transition allowance for the HST. That hasn't been repaid at this point and is definitely a one-time thing.

As for the OAS debate that is another issue. Harper hasn't actually said what he plans to do, so we'll see. Talk is of moving the starting age is 67, but we'll see. Awfully interesting that this wasn't forseen during the election campaign!

From what I understand, the $1.9B from BC isn't even on the books yet. The overall deficit reduction comes from stimulus spending winding down and less government spending in general. Total revenues are up as well.

Not sure what you're talking about.

[Azure]

Originally Posted by CaptainCrunch

Its going to be interesting to see if the U.S. moves forward with cutting 92,000 military personal and reforming their military at a strategic level

http://bits.blogs.nytimes.com/2012/0...for-the-cloud/


On one hand its a pretty deep series of cuts, on the other hand you're throwing 92,000 people on the streets.

Funny how everyone isn't up in arms over that because it is like you said taking jobs away from 92,000 people. Imagine if the rest of the government had to cut 92,000 jobs.

Either way, this is why you have to constantly focus on balancing the budget. Then you don't have to worry about cutting 92,000 people every year. Instead you're only firing a few thousand, which is much easier for the economy to handle.

[CaptainCrunch]

Originally Posted by Azure

Funny how everyone isn't up in arms over that because it is like you said taking jobs away from 92,000 people. Imagine if the rest of the government had to cut 92,000 jobs.

Either way, this is why you have to constantly focus on balancing the budget. Then you don't have to worry about cutting 92,000 people every year. Instead you're only firing a few thousand, which is much easier for the economy to handle.

I agree with what your saying, these are convienient cuts. Lets be honest, the Military isn't unionized, they don't have massive pensions and early retirement packages in place.

There are probably better places to cut if you look at the government and military as one entity.

Its likely that the RIF is going to go after enforced early retirements first and hopefully redundant senior officer postings.

I mean at the end of the day, while the cuts will effect American readiness, the American Military would still be far ahead of any other country.

I also noticed that Obama has opened up Oil exploration in the Gulf of Mexico again to reduce reliance on foreign Oil, guess he doesn't care much about the environmental impact in that Gulf anymore.

[MarchHare]

WRT to reduction in US military personnel, how many of the 92,000 will actually be let go against their will versus how many will voluntarily leave because their term is up without a replacement being recruited (cutbacks through attrition)? It's probably too early to say at this point, but I can't imagine the plan is to have nearly 100k service members forcibly lose their jobs.

[Azure]

Originally Posted by MarchHare

WRT to reduction in US military personnel, how many of the 92,000 will actually be let go against their will versus how many will voluntarily leave because their term is up without a replacement being recruited (cutbacks through attrition)? It's probably too early to say at this point, but I can't imagine the plan is to have nearly 100k service members forcibly lose their jobs.

Getting seriously off topic here, but I would hope so as well.

Would be much easier to handle, although lots of those service members would want to re-enlist.

[Slava]

Originally Posted by Azure

From what I understand, the $1.9B from BC isn't even on the books yet. The overall deficit reduction comes from stimulus spending winding down and less government spending in general. Total revenues are up as well.

Not sure what you're talking about.

I took that from one of the articles you posted actually...thats what I'm talking about.

[Azure]

Originally Posted by Slava

I took that from one of the articles you posted actually...thats what I'm talking about.

Well the $1.9B the Feds should get back from BC is great, but the $8 billion in reduced spending in the 2012 budget is the bigger deal here.

[Slava]

Originally Posted by Azure

Well the $1.9B the Feds should get back from BC is great, but the $8 billion in reduced spending in the 2012 budget is the bigger deal here.

Well $8B would be great. TD estimates they will finish the year at about $27-28B and they budgeted for $32.3B.

So, if they're having such an easy time then why cut OAS? I'm not saying I disgaree, but its an odd position.

[SebC]

If the government really wants to fix the budget, the first thing that should be cut is the omni-bus crime bill.

[Azure]

Originally Posted by Slava

Well $8B would be great. TD estimates they will finish the year at about $27-28B and they budgeted for $32.3B.

So, if they're having such an easy time then why cut OAS? I'm not saying I disgaree, but its an odd position.

OAS is going to cost us over $100 billion per year by 2030. Did you even read the articles?

The $8 billion is what they have said they will cut in the 2012 budget. Finishing the year with a $27 billion dollar deficit has nothing to do with that.

[Slava]

Originally Posted by Azure

OAS is going to cost us over $100 billion per year by 2030. Did you even read the articles?

The $8 billion is what they have said they will cut in the 2012 budget. Finishing the year with a $27 billion dollar deficit has nothing to do with that.

I read the articles, hence my asking you about numbers within them!

So Harper and the Tories had no idea that OAS was going to escalate until now? You're better than that. Its been a known issue for years and frankly some people from a range of parties were asking questions about these coming issues during that campaign (I'm sure it was in the election thread here, I know I brought it up and doubt I was alone). The politicians were too busy buying votes though; we heard nothing about our aging population and the problems it will cause going forward. Now within a year were told to accept major changes...clearly that isn't going to go over well.