Canadian Federal Politics Thread v5

[Slava]

Originally Posted by iggy_oi

Could there be not be a healthy mix of both?

Ideally, no.

[PepsiFree]

Middle class people aren’t buying airplanes.

[iggy_oi]

Originally Posted by PepsiFree

Middle class people aren’t buying airplanes.

Not with that attitude

[Envitro]

Originally Posted by PepsiFree

Middle class people aren’t buying airplanes.

Sure, they're not buying multi-million dollar jets, but I know lots and lots of middle-class folks that have their private pilots license and have either a full share or part share of an airplane.

[PepsiFree]

Originally Posted by Envitro

Sure, they're not buying multi-million dollar jets, but I know lots and lots of middle-class folks that have their private pilots license and have either a full share or part share of an airplane.

Then they aren’t middle class.

[accord1999]

Originally Posted by PepsiFree

Middle class people aren’t buying airplanes.

$100K threshold covers a lot of the general aviation market, regular people who are flying enthusiasts with a 40 year old single engine Cessnas.

[iggy_oi]

Originally Posted by Envitro

Sure, they're not buying multi-million dollar jets, but I know lots and lots of middle-class folks that have their private pilots license and have either a full share or part share of an airplane.

Lots of people eh? I didn’t realize there were so many middle class folks flying airplanes. Roughly how many do you know?

The more important question is probably what do you define middle class as?

[iggy_oi]

Originally Posted by accord1999

$100K threshold covers a lot of the general aviation market, regular people who are flying enthusiasts with a 40 year old single engine Cessnas.

People who are spending $100k+ on what is essentially a toy probably aren’t middle class.

[TheIronMaiden]

Middle class is between $99,000 and $70,000?

[Derek Sutton]

Originally Posted by speede5

See when you get into that you are only hurting the middle class. People who've saved over their lifetime for one extravagance in their retirement, maybe an RV to tour around in, a small aircraft to enjoy, or a cool car to cruise in. This won't hurt the rich who can lease these items on a business and have a dozen loopholes.

Luxury taxes are sold to the poor saying anything they can't afford is a luxury but they should be based more on the income of the purchaser than the cost of the item.

A one time purchase such as you are describing will increase the price slightly, so a $120,000 RV will increase by about $4000, so not something unattainable by a middle class one time purchase. Families with an ATV for everyone, or a fleet of snow mobiles and Seadoos, yah they can pay a few extra bucks in tax too.

Lease write- offs also have a monthly cap, on vehicles for instance the maximum is $850 a month. Not only that but a leased vehicle still has a "purchase price" so this tax would still apply. There are always loopholes, but less on consumption then on income.

[opendoor]

Originally Posted by accord1999

$100K threshold covers a lot of the general aviation market, regular people who are flying enthusiasts with a 40 year old single engine Cessnas.

The tax only applies to purchases of new planes; the cheapest new Cessna is about $500K CAD.

[Ozy_Flame]

Outside of essentials, any tax based on consumption is a good tax IMO.

Consume more, pay more. I'd probably even levy more tax or an augmenter of sorts if what you're buying impacts others or other things with no discernable benefit. Things like various types of pollution and/or environmental damage would likely meet that threshold.

Maybe such things already exist?

[Jason14h]

Consumption tax is the best type of tax. I would love a proper mix of no-little income tax - Maybe some level is still needed as income levels escalate (or maybe just changes to capital gain if no income tax) and pure/majority of taxes be consumption based.

Piling consumptions taxes on top of income tax just because "These people can afford to pay more" - That isn't an environment I support.

[calgarygeologist]

Originally Posted by Jason14h

Consumption tax is the best type of tax. I would love a proper mix of no-little income tax - Maybe some level is still needed as income levels escalate (or maybe just changes to capital gain if no income tax) and pure/majority of taxes be consumption based.

Piling consumptions taxes on top of income tax just because "These people can afford to pay more" - That isn't an environment I support.

Consumption tax seems good but at what rate would the government need to tax at in order to cover current income tax? Maybe I'm not looking at the big picture properly but currently someone making $500,000 pays about $200,000 in income tax. At 25% consumption tax they would have to spend $800,000 to cover that same tax burden. Are the "rich" people really spending enough money to generate enough revenue via consumption tax especially if we remove essentially items from the tax base?

[Ozy_Flame]

Yeah I'm not seeing a strong argument for getting rid of income tax. I just can't see the tax responsibility to run modern, first-world society being sufficient enough through consumption taxes to supplant it - especially if we want healthcare, public education, child care, etc.

Unless there is statistics I'm missing, or a case study that proves otherwise? Like, how much GST/PST/extra tax would be needed to get rid of it completely?

[opendoor]

Originally Posted by calgarygeologist

Consumption tax seems good but at what rate would the government need to tax at in order to cover current income tax? Maybe I'm not looking at the big picture properly but currently someone making $500,000 pays about $200,000 in income tax. At 25% consumption tax they would have to spend $800,000 to cover that same tax burden. Are the "rich" people really spending enough money to generate enough revenue via consumption tax especially if we remove essentially items from the tax base?

No, they're not. Anyone advocating for income taxes to be replaced by consumption taxes is just asking for lower and middle income people to pay significantly higher taxes to generate the same revenue. Particularly since rich people will just spend money outside the country wherever possible.

Never mind the drag that such high consumption taxes would create on economic activity.

[Locke]

Originally Posted by opendoor

No, they're not. Anyone advocating for income taxes to be replaced by consumption taxes is just asking for lower and middle income people to pay significantly higher taxes to generate the same revenue. Particularly since rich people will just spend money outside the country wherever possible.

Never mind the drag that such high consumption taxes would create on economic activity.

Yup.

Its one of the odd things that I find when people are arguing for Consumption taxes.

"Well if we add a PST or VAT then look at this giant Revenue Gap we can close!!"

Right. Yeah. Because all other factors are going to stay exactly the same right? Wealthy people arent going to choose to spend differently?

Furthermore, wealthy people tend to save and invest their money, they're not NBA ballas on payday going out and buying gold chains and new Ferraris every couple of weeks they're not going to be stumping up as much money as people are hoping they will.

And thats what it is, its not a plan, its hope. Its a wish.

You want a consumption tax? Its going to be levied on top of all the other taxes you pay.

[PepsiFree]

Originally Posted by opendoor

The tax only applies to purchases of new planes; the cheapest new Cessna is about $500K CAD.

Imagine buying a plane that costs more than the average home price in Calgary and crying to everyone that the new luxury tax is “hurting the middle class!”

Hilarious.

It reminds me of the “how much could a banana cost?” bit on Arrested Development. We know the super elite are completely out of touch, but it’s always fascinating to see how out of touch even lower-tier wealthy people are. No dorks, when people talk about middle-class, they aren’t talking about people who buy $200,000 cars and $500,000 planes.

[CaptainCrunch]

I'm surprise that there wasn't an exception on the purchase of Bombardier private jets.

[Slava]

Originally Posted by calgarygeologist

Consumption tax seems good but at what rate would the government need to tax at in order to cover current income tax? Maybe I'm not looking at the big picture properly but currently someone making $500,000 pays about $200,000 in income tax. At 25% consumption tax they would have to spend $800,000 to cover that same tax burden. Are the "rich" people really spending enough money to generate enough revenue via consumption tax especially if we remove essentially items from the tax base?

I don't think that you an blanket it like that, though. With income tax you have ways to reduce the taxable income and things like that. A consumption tax doesn't allow for that.