Canadian Federal Politics Thread v5

[Slava]

Originally Posted by GioforPM

No states have only consumption taxes. The non-income tax states all have property taxes (in some cases pretty high property taxes).

Yeah but is there anywhere that has only income tax and no property tax or anything else? I don’t think that’s a fair comparison.

[Doctorfever]

Definitely need property taxes, but I am not sure making property taxes high and income taxes low (or non existent) is the answer. Will just make rents higher, and properties less affordable / desirable for people. Likely increasing the gap between wealthy and poor.

[timun]

Originally Posted by Fuzz

Oh, quick math looks like 2% of 2.7 trillion GDP = ~$54 billion a year. Our spending is $467 billion, so that's more than 10% a year to defence. Not sure I can agree with that priority...

Originally Posted by belsarius

FWIW I did some quick calculations of other countries (Latvia and Germany) and yes, 9-10% of actual spending seems to be what they would need to do to meet the 2% of GDP.

For reference, the US defence budget last year was US$857.9 billion against a $25.46 trillion GDP, or about 3.3% of GDP. Their overall federal spending was $6.272 trillion, making their percentage spend on their military about 13.7%.

Nobody else comes close to this.

[timun]

Originally Posted by Doctorfever

Definitely need property taxes, but I am not sure making property taxes high and income taxes low (or non existent) is the answer. Will just make rents higher, and properties less affordable / desirable for people. Likely increasing the gap between wealthy and poor.

Replacing income tax revenue with property tax revenue is nuts: it'll make property unaffordable to anyone but the rich. We're almost already there as it is... You'd create modern-day serfdom.

[bizaro86]

Originally Posted by timun

Replacing income tax revenue with property tax revenue is nuts: it'll make property unaffordable to anyone but the rich. We're almost already there as it is... You'd create modern-day serfdom.

Much higher property taxes would quickly and permanently lower the cost of real estate. It would suck for those who currently own.

[Derek Sutton]

Originally Posted by bizaro86

Much higher property taxes would quickly and permanently lower the cost of real estate. It would suck for those who currently own.

And those with limited income; Not enough homeless seniors, jacking up property taxes will create some.

[bizaro86]

Originally Posted by Derek Sutton

And those with limited income; Not enough homeless seniors, jacking up property taxes will create some.

I'm not advocating for that policy, just disagreeing with Timun's take on how it would affect affordability.

It would probably motivate some seniors to downsize (which is probably good for housing supply). And most provinces have the ability for seniors to defer their property taxes until death already iirc.

[GGG]

Originally Posted by Derek Sutton

And those with limited income; Not enough homeless seniors, jacking up property taxes will create some.

You are correct there are not enough homeless seniors. They have the lowest rates of poverty of any age group within Canada.

Seniors who own their homes are among the wealthiest Canadians. As they sell their homes it’s a massive wealth transfer from current buyers to those leaving the market.

Home owning seniors should be the last people we consider when we make policy.

[Yoho]

Could be some trouble in the Liberal hen house.

https://twitter.com/user/status/1648804636638302208

[iggy_oi]

Originally Posted by bizaro86

Sure - that would definitely get them closer - any non-taxable number you add to spending makes higher consumption taxes less favorable. I'd comment that the GST rebate actually goes up with a child. I'll go throught the math again and see whether that makes a big enough difference to swing the result.

I found the same benefit calculator I think it's likely you used to determine that number, and of the $11k per year $205.25 per quarter is a GST rebate, or $821/year, so I'll use that for the GST rebate portion.

So let's re-run the numbers for your scenario. $14k+11k tax benefits is $25k total cash. Now we have a kid involved, which probably makes it harder to find shared accommodations at $500/month. Let's be very aggressive and assume we're still sharing rent somehow at $500/month. I think this is almost certainly going to be higher but a lower number benefits your side of the argument so I'll assume the roommates were cool with having the kid stay for no extra rent split. So keep the same $6k.

To get that level of subsidy the child has to be under 6 years old (the subsidy goes down once the gov't assumes they're in school). So lets take our $3k/year food cost and add a single child from the ages 1-3 category from the report I linked above, rounding down to $2200. This is generous to your cause, as both younger and older groups are more expensive according to the report. That gets us to $5200/year in food.

So a total of $11,200/year of exempt/zero rated spending. You've specified a single mom so some of the other exempt categories almost certainly apply eg feminine hygiene products, but we'll assume zero for those (could be a single dad), transit, bank fees, medical, etc as well to benefit your case.

That leaves $25k - $11.2k = $13,8000 of spending that attracts GST, or $690 of GST paid. Still less than the $821 GST rebate per year, so this hypothetical person with all assumptions maximized in favor of this not working still benefits from a doubling in GST/GST credits.

Basically, I still think you're wrong and while I took the time to go through the math on what is likely the most favorable situation to your opinion I don't think you can get there (and my rent assumption especially is pretty generous I think - I suspect a single mom+toddler would have a very hard time finding something at $500/month).

I actually think this is symptomatic of a major problem in our public discourse. Many people on the left care about people but haven't reliably costed their ideas to see whether they'll actually benefit the people they're trying to help. And many on the right are good at math but don't give a #### about people, especially poor people. I really believe that when you're considering public policy change how it quantitatively affects the most vulnerable in society over the long term should be a key factor, and I think higher consumption taxes paired with increased tax credits would absolutely help that demographic.

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.

[Looch City]

Yes it was me, I leaked the story. AMA.

[GGG]

The government just introduced funding to build software to auto file taxes for vulnerable Canadians to get them access to those benefits so as of sometime next year that should be taken care of.

[iggy_oi]

Originally Posted by GGG

The government just introduced funding to build software to auto file taxes for vulnerable Canadians to get them access to those benefits so as of sometime next year that should be taken care of.

I for one look forward to seeing how they plan to auto file taxes and get rebates to people who have no jobs or fixed addresses.

[Wormius]

Originally Posted by iggy_oi

I for one look forward to seeing how they plan to auto file taxes and get rebates to people who have no jobs or fixed addresses.

How does it work now? I am not clear on this, but can’t someone without a fixed address still have a bank account where rebates can get deposited - or do they need to get a physical cheque and take it to a cheque cashing outlet?

[iggy_oi]

Originally Posted by Wormius

How does it work now? I am not clear on this, but can’t someone without a fixed address still have a bank account where rebates can get deposited - or do they need to get a physical cheque and take it to a cheque cashing outlet?

Either is an option right now, but what percentage of homeless panhandlers or drug addicts do you think have a bank account or file their taxes?

[Wormius]

Originally Posted by iggy_oi

Either is an option right now, but what percentage of homeless panhandlers or drug addicts do you think have a bank account or file their taxes?

What potential problem are you foreseeing as a result of auto-filing a zero-dollar income tax return for the above scenarios?

For all intents and purpose, we can assume everyone has a SIN, so the government knows if you made money or you’re deceased or whatever.

I’d imagine the government would just make some announcement that rebate cheques are available, so go to Harry Hays or wherever and pick them up.

[iggy_oi]

Originally Posted by Wormius

What potential problem are you foreseeing as a result of auto-filing a zero-dollar income tax return for the above scenarios?

For all intents and purpose, we can assume everyone has a SIN, so the government knows if you made money or you’re deceased or whatever.

I’d imagine the government would just make some announcement that rebate cheques are available, so go to Harry Hays or wherever and pick them up.

The concern is that they don’t actually receive the money and that that combined with paying a higher GST would negatively impact their already challenging lives.

[GGG]

Originally Posted by iggy_oi

Either is an option right now, but what percentage of homeless panhandlers or drug addicts do you think have a bank account or file their taxes?

What is the typical spend profile of a pand handler or drug addict? For the homeless addict I think the gat is meaningless to their day to day life and potential to get out of homelessness. For better or worse it won’t have any impact on life outcomes in this group.

Your strongest argument is the lumpy nature of gst payments but they could be moved to monthly. None of the things you are identifying aren’t solvable.

[iggy_oi]

Originally Posted by GGG

What is the typical spend profile of a pand handler or drug addict? For the homeless addict I think the gat is meaningless to their day to day life and potential to get out of homelessness. For better or worse it won’t have any impact on life outcomes in this group.

Your strongest argument is the lumpy nature of gst payments but they could be moved to monthly. None of the things you are identifying aren’t solvable.

That’s all well and good but until the problems are actually addressed they’re still valid concerns IMO. I respect that you disagree though.

I’m not sure how you don’t see an increase to prices for people who have almost no money but still need to buy things with the money they do manage to scrape together won’t have a negative impact on them.

[Firebot]

It seems really odd to be bickering on the hardships that a homeless could be facing by talking about GST of all things. Most basic groceries and necessities have GST exempt status.

You know what taxes we have that homeless or addicts use as escapism? Smokes, alcohol. Sin taxes are much more oppressive to the poor yet are the ones who use it the most. Look at the breakdown of taxes.

https://www.smoke-free.ca/pdf_1/taxrates.pdf

Impact of GST on those at the bottom of the poverty line that may not think to file a tax return to get a GST rebate is such an odd virtue signaling grandstanding position to try to make an argument on when there are so many other things that could be done with a far better and direct benefit on their hardships. It's just so inconsequential.