GST and Income Tax cuts announced

[ken0042]

Originally Posted by albertGQ

So if you made exactly $37178 in taxable income,
<snip>
you would save a total of $277.39

So basically, anybody who makes $37178 or more also saves this much in taxes, right?

[albertGQ]

Originally Posted by ken0042

So basically, anybody who makes $37178 or more also saves this much in taxes, right?

Anyone who has a taxable income of $37178 or greater will save that much

Someone could make $40k and someone else make $50k, but the $50k earner may have a lower taxable income


taxable income is different than earned income

As a general rule: You want to maximise earned income but minimise taxable income

[Wookie]

Originally Posted by Stranger

This may be the govrnments plan. First we got to bone up on our seven and six times tables and now we get to practice our five times tables.

And tipping is even easier now. Just triple the GST for good service @ 15%

[MaDMaN_26]

Originally Posted by albertGQ

Anyone who has a taxable income of $37178 or greater will save that much

Someone could make $40k and someone else make $50k, but the $50k earner may have a lower taxable income


taxable income is different than earned income

As a general rule: You want to maximise earned income but minimise taxable income

that would be due to RRSP contributions or Charitible donations etc... etc... right...

But assuming none of that is applicable Ken is correct?

[return to the red]

Originally Posted by Wookie

And tipping is even easier now. Just triple the GST for good service @ 15%

yah that whole double the GST thing just didn't work for me @ 6%

[Bobblehead]

Originally Posted by MaDMaN_26

that would be due to RRSP contributions or Charitible donations etc... etc... right...

But assuming none of that is applicable Ken is correct?

RRSP - yes
Charitable Contributions - no. They don't affect your taxable income (they do reduce your tax, but they are non-refundable tax credits).

[albertGQ]

Originally Posted by Bobblehead

RRSP - yes
Charitable Contributions - no. They don't affect your taxable income (they do reduce your tax, but they are non-refundable tax credits).

Correct.

I don't know why the Conservatives didn't jsut do a simple tax cut like this last time instead of introducing a bunch of tax credits to make tax filing even more complicated.

The employment tax credit and the transit pass tax credit are two obvious examples. You don't even have to provide proof of transit pass purchases either.

[ken0042]

Originally Posted by albertGQ

You don't even have to provide proof of transit pass purchases either.

Well, unless you get audited.

You can claim all sorts of things without proof. When I was running my home business they never once asked for any kind of receipts. But I have them- just in case they decide they want to crawl up inside my butt.

[Rockin' Flames]

Well the tax cuts seemed to have passed thanks to the Liberals who have decided to abstain.

Link

What I find kind of odd in the article is:

"Mr. Dion, who dismissed the proposed GST cut as poor fiscal policy, said the Liberals would also consider rescinding the cut if they formed the next government."

Even if the GST isn't the greatest cut, why in the world would anyone admit that they would consider raising the GST rate if elected.

[ken0042]

Originally Posted by Rockin' Flames

Even if the GST isn't the greatest cut, why in the world would anyone admit that they would consider raising the GST rate if elected.

Perhaps they plan on breaking all of their election promises with respect to the GST. And then they can break a promise and make people happy.

[albertGQ]

I dont' see how a GST cut a "great" cut.

Even the poor people that don't pay income taxes still pay GST. GST cut equals more cash in our pockets to spend which stimulates the economy, or save which banks can lend to investors.

I love this GST cut. What I love even more is the retroactive features of the of both the personal excemption limit and the tax rate cut.

[albertGQ]

Originally Posted by flamesaresmokin

I'd be happy if they'd leave gst alone and lower income taxes to a more reasonable level for the middle bracket....comparitvely it is the worst bracket to be in and most canadians are in that bracket.

But a cut in the lowest tax bracket also helps out the middle bracket.

I do agree though that both the middle and lowest tax brackets should be cut

[ken0042]

Originally Posted by albertGQ

I dont' see how a GST cut a "great" cut.

I think the Liberals are mad at a few things. That it was the Conservatives who brought in the GST, and now are the same once taking it out. I also think they are choked that it never occurred to them to phase it out 1% per year like the Cons are doing. I imagine they looked at it, saw it brought in $20B (or whatever the number is), and figured it couldn't be done.

[MarchHare]

Originally Posted by albertGQ

I dont' see how a GST cut a "great" cut.

Even the poor people that don't pay income taxes still pay GST. GST cut equals more cash in our pockets to spend which stimulates the economy, or save which banks can lend to investors.

I love this GST cut. What I love even more is the retroactive features of the of both the personal excemption limit and the tax rate cut.

Poor people who can only afford the necessities in life (food, clothing, shelter, etc.) don't pay much in the way of GST. Cuts to sales taxes tend to benefit people who buy big ticket items, such as new homes and cars, big screen tvs, etc.

If you do further reading on this issue, you will find that nearly every economist agrees that reducing income and corporate taxes is a better fiscal policy than reducing the GST.

[ken0042]

Originally Posted by MarchHare

If you do further reading on this issue, you will find that nearly every economist agrees that reducing income and corporate taxes is a better fiscal policy than reducing the GST.

While I agree that it is generally better to cut income tax as opposed to sales tax, something in me likes the lower GST. All my adult life I paid 7% or more in sales tax. (There was 7% PST in Manitoba before I moved to Calgary.)

Now that the tax is lower than ever, I notice it and I feel good. Maybe on my next purchase I won't hesitate quite as much. And another part is how I feel about additional charges; like how Enmax charges X amount for electricity, but there's 7 other items for line use, etc. Maybe if there was less or even no sales tax, businesses would be less likely to add on stuff.

[DementedReality]

Originally Posted by ken0042

..

Now that the tax is lower than ever, I notice it and I feel good. Maybe on my next purchase I won't hesitate quite as much. .

i have read that the GST cut can actually be an inflationary trigger which could result in an increase in interest rates. even a minor increase caused by this cut will dwarf the tiny value of the GST cut.

[greyshep]

Originally Posted by loob job

I'm an accountant in the homebuilding industry and here's what we got from the Canadian Homebuilders Association. This should answer the house questions in this thread.

OTTAWA, October 30, 2007 – The Harper government’s decision to cut the GST to 5 per cent,
effective January 1, 2008, will significantly improve housing affordability, the Canadian Home
Builders’ Association (CHBA) said today.
“This is great news for both home buyers and owners,” CHBA President Richard Lind said. “It
will help all owners who are considering renovations and all Canadians who make major
household purchases.”
Mr. Lind said that the announcement in Finance Minister Jim Flaherty’s Economic Statement
fully honours the Conservatives’ 2006 election commitment to reduce the GST by two per cent.
“We are pleased to congratulate a government that keeps its campaign promises.”
He welcomed transitional rules for the further 1 per cent reduction. This reduction applies to
homebuyers who purchase after October 30 and take possession after January 1, 2008. As well,
those who purchase before October 30 and take possession after January 1 will be able to apply to
Canada Revenue Agency for a transitional rebate that reflects the reduction to 5 per cent.

That is great! Thanks for the info.

Is there a public link to the webpage you received this information from?