Dion says Liberal government would not cut GST

[mykalberta]

Agreeing with the general point aside.

Wouldnt this be better to be kpet secret until after you "win" an election?

http://www.ctv.ca/servlet/ArticleNew...hub=TopStories

For me, when a goverment cuts income tax, I never notice even if I am affected because the drop is so little - I notice the damn CPP contributions ending earlier more than income tax.

I do notice almost daily when I buy stuff that it may be only a percentage but its real.

It would seem a mistake politically especially if you are going to get an election soon, called within weeks before or after the QC result if positive for Charest.

I dont have an economics doctrate or a polic sci degree so I dont really have any trainging to back it up other than what seems to be common sense.

MYK

[Table 5]

hey, atleast he's honest about it.

[Hemi-Cuda]

i just want it dropped to 5% so that it's a nice easy # to figure out in your head when buying stuff

[Flame Of Liberty]

All tax cuts are good cuts, but if given the choice, i prefer income/capital gains/etc tax cuts before GST/VAT/etc tax cuts.

If you are so hell bent to tax, tax consumption, leave production alone.

[Slava]

Cutting the GST down a penny at a time is not that great of an election platform either; I hardly noticed with the initial cut, and couldn't care less about the next one. All that has done is made it more frustrating for business owners to convert each time.

[Table 5]

Originally Posted by Hemi-Cuda

i just want it dropped to 5% so that it's a nice easy # to figure out in your head when buying stuff

don't say that or they will just jack it up to 10%!

[MarchHare]

I will have paid more in taxes this year than I did the previous one because the Harper government scrapped the most recent income tax cut passed by the Liberals. The only people who come out ahead because of a one or two percent reduction to the GST vs. an income tax cut are those who are planning to purchase a new home or maybe a new vehicle.

My two biggest expenses -- rent and groceries -- aren't subject to the GST anyway. I'd much prefer a cut to income tax than a reduction of a sales tax.

[mykalberta]

Originally Posted by Table 5

hey, atleast he's honest about it.

True, and I get the economic reasoing I think, I dont get the political reasoning.

It would be a change from the 92? Red Book about Nafta, GST, etc - and a welcome change at that.

I just dont think its sound politically and it doesnt appear to the base he needs, NDP voters will not cast a vote for the Liberals if they are going to tax cut big buisness.

Normally you announce items that will either retain or gain voters, I dont see this doing either for the Liberals?

Has there been any studies done on persons making less than 50k a year and what is better, gst cut or income tax cut. I would think for those making 35k or less a year the gst would be better because they already pay so little income tax but they do buy alot of stuff to live.

Definate two different viewpoints, CPC and LIB.

This election will be great to watch.

MYK

[mykalberta]

Originally Posted by MarchHare

I will have paid more in taxes this year than I did the previous one because the Harper government scrapped the most recent income tax cut passed by the Liberals. The only people who come out ahead because of a one or two percent reduction to the GST vs. an income tax cut are those who are planning to purchase a new home or maybe a new vehicle.

My two biggest expenses -- rent and groceries -- aren't subject to the GST anyway. I'd much prefer a cut to income tax than a reduction of a sales tax.

Good point on the rent and groceries thing. For me, I already save what I think is enough and have my Dave Ramsey 3 month coushin in place and I would likely blow the rest on vacations etc or paying down debt.

I was thinking this more as a political move than economic.

MYK

[MarchHare]

I would think for those making 35k or less a year the gst would be better because they already pay so little income tax but they do buy alot of stuff to live.

Low-income Canadians don't pay much in the way of taxes, period. As you noted, they don't pay much income tax, but items deemed essential for living, such as housing costs* and food, aren't subject to the GST anyway. Someone who only has enough money to afford the necessities and isn't buying any expensive electronics or luxury goods isn't going to be paying much because of the GST.

*with the exception of new homes, which are subject to the GST

[mykalberta]

Originally Posted by Hemi-Cuda

i just want it dropped to 5% so that it's a nice easy # to figure out in your head when buying stuff

You and me and probably everyone else out there - WTF with 7, I would rather 10 than 7, ok maybe not but you get it.

MYK

[albertGQ]

Of course they're not going to cut the GST, aren't they going to ABOLISH it?

Anyway, I want my GST cut, but the first place the feds should do is increase the basic personal excemption. I believe its roughly at $8,000 right now

I think it should go to at least $12,000.

This will force the Alberta flat tax to be lowered as well since the Tories promised that with the flat tax, Albertans will always be better off with that tax structure as opposed to piggybacking off the federal system like they used to.

So I would think the flat tax can get lowered from 10% to 8% and maybe even increase the provincial personal excemption too. Might as well eliminate health care premiums while we're at it

[MarchHare]

Anyway, I want my GST cut, but the first place the feds should do is increase the basic personal excemption. I believe its roughly at $8,000 right now

For the record, the Liberals did exactly that in the last budget passed by Paul Martin's government. The CPC repealed that measure last year in order to offset their cut to the GST.

[Edit]
Actually, I'm wrong on this. The Liberal budget in 2005 set a framework to raise the personal exemption from $8012 in 2005 to $10,000 in 2009. Harper's government made no change to this policy. They did, as albertGQ noted, raise the lowest tax bracket by 0.5%, though. Throughout last year's election campaign, Harper spoke of reducing the GST and scrapping the latest Liberal income tax break to offset the difference. I incorrectly assumed this also included reversing the changes the Liberals made to the personal exemption amount.

[albertGQ]

Originally Posted by MarchHare

I will have paid more in taxes this year than I did the previous one because the Harper government scrapped the most recent income tax cut passed by the Liberals. The only people who come out ahead because of a one or two percent reduction to the GST vs. an income tax cut are those who are planning to purchase a new home or maybe a new vehicle.

My two biggest expenses -- rent and groceries -- aren't subject to the GST anyway. I'd much prefer a cut to income tax than a reduction of a sales tax.

Well, it wasn't completely scrapped. Before the Liberals dropped it to 15%, the lowest tax bracket was at 16%. The Conservatives raised it to "only" 15.5% when they formed a minority

[mykalberta]

Originally Posted by Slava

Cutting the GST down a penny at a time is not that great of an election platform either; I hardly noticed with the initial cut, and couldn't care less about the next one. All that has done is made it more frustrating for business owners to convert each time.

True but the it does at least give voters a blueprint as to what they will do and if they dont do it they can be held accountable.

Alot of times in elections, these fantastical promises get made and then when its over you were liek, so what did they promise again?

I think for the CPC especially, the GST is a big part of what killed the PC Feds so as a statement it was good for them to make in an apologetic gesture without really apologizing.

MYK

[mykalberta]

Originally Posted by MarchHare

Low-income Canadians don't pay much in the way of taxes, period. As you noted, they don't pay much income tax, but items deemed essential for living, such as housing costs* and food, aren't subject to the GST anyway. Someone who only has enough money to afford the necessities and isn't buying any expensive electronics or luxury goods isn't going to be paying much because of the GST.

*with the exception of new homes, which are subject to the GST

I was thinking more along the lines of gas, clothes, home essentials etc.

The problem with messing with the lower tax brackets alot is that there are so many people in them that a small shift can cause tremedous shift in tax recieved. Same goes with the personal exemption, there are probably alot of students out there making more than 8k over the summer not to mention part time housewives etc.

From a political stand point cutting the lower end tax bracket or raising the personal exemption does little or nothing to attract votes for the CPC. It does attract voters for NDP/Libs etc and had Dion delivered it like that as a cut for the poor etc then it wouldnt have been so strange but he made it sound like a biz/middle income tax cut which doenst really help him.

I agree with the economic argument for it, but in politics if a 5 year old cant understand the argument then its likely too complex for the average voters attention span.

MYK

[albertGQ]

I think people making $1000 a month should not have to pay taxes. That's why the personal exemption limit should be increased to at least $12,000

[mykalberta]

Originally Posted by albertGQ

I think people making $1000 a month should not have to pay taxes. That's why the personal exemption limit should be increased to at least $12,000

If that is single person income I agree. If say a couple is married and one spouse makes 60k and the other 12k working part time out of the house, I dont think that spouse should have to pay nothing.

Good point on the 1k/month, I never though of Alberta's as that way.

MYK

[MarchHare]

Originally Posted by albertGQ

I think people making $1000 a month should not have to pay taxes. That's why the personal exemption limit should be increased to at least $12,000

Indeed.

The other thing I like about raising the personal exemption is that it affects everyone equally, unlike Bush's tax cuts in the US that really only benefitted the wealthy while making no difference to the poor or middle class. By increasing the exemption amount from $8000 to $12,000, every Canadian taxpayer earning at least $12,000 annually keeps an extra $620 in their pocket, regardless if their annual income is $12,000, $120,000, or $1,200,000.

[Hack&Lube]

It think a 5% GST will save enough brainpower to increase output

Just take 10% and divide by two. Easy enough! I hate figuring out tax and then being lazy and then just getting a pile of change back.