GST cut

[The Bread Guy]

Re:  "asking", all I know from one retailer is that Revenue Canada (allegedly) sent out a letter in March, saying that as of 1 Jul, a 1% "inventory" tax that I haven't seen anything about in the media (not that I trust them entirely).  Struck me as odd having a pro-biz gov't (allegedly) levy a new tax on businesses, so I was just wondering if others in the same boat had seen same letter, and, if they had, if this is pulling in more revenue to deal (at least partly) with the 1% GST drop.

Hope this clarifies....

 

[aesop081]

My point is that this tax cut will really only benefit people who make big ticket purchases.

If the government really wanted to give us a tax break they'd either A) get rid of the GST completely, B) give the GST rebate cheques to more people and increase the rebate C) take the GST off of most necessary purchases. 
Theres nothing worse than buying 700 dollars worth of text books and then having to pay 7% on it.  Its great that Miss so and so is able to save 7 grand on her new 700K house, but what about all those students who have to shell out a larger proportion of their income on tax for books and other necessities?

 

:crybaby:

poor freakin students........There's a group i have little sympathy for. Specialy those who live with mom and dad rent-free.  before the CF strted paying for everything i got my education and i shelled out money for books just like any other student.  i was married and raising 2 yound kids.  I didnt get any help like loans and grants....give me a freakin break !!

a 1% GST cut doesnt seem like a big deal to you but every little bit i dont have to shell out on my hydro bill, my cable bill, my phone bill sure helps.  Like you example of the money you save on coffe every year now...well that an extra 10 bucks that gets put in my kid's RESP....seems like small change but it wont hurt.

If you dont like it, go to Russia.

Re:  "asking", all I know from one retailer is that Revenue Canada (allegedly) sent out a letter in March, saying that as of 1 Jul, a 1% "inventory" tax that I haven't seen anything about in the media (not that I trust them entirely).  Struck me as odd having a pro-biz gov't (allegedly) levy a new tax on businesses, so I was just wondering if others in the same boat had seen same letter, and, if they had, if this is pulling in more revenue to deal (at least partly) with the 1% GST drop.

Hope this clarifies....

The governemnt doesnt go and ask for a tax from buisnesses directly.....the democratic process has to take its course first.  Have you seen this letter ?

 

[The Bread Guy]

aesop081:  The governemnt doesnt go and ask for a tax from buisnesses directly.....the democratic process has to take its course first.  Have you seen this letter ?

Nope - retailer talked about a 1% "inventory tax".  CRA has been clear & transparent on a new 1% inventory tax on smokes beyond a certain level of inventory:
http://www.cra-arc.gc.ca/E/pub/em/edn10/edn10-e.html
and I asked about that.  Retailer said no, it was on everything.  Could just be a rant, so that's why I was curious to hear if anyone else had heard of such a beast.

 

[aesop081]

Well until i see it, it is just another BS conspiracy thing. More people having to complain about everything.  I expect that the lineup at the Russian imigration office will grow larger..... ;D

 

[GAP]

The CCRA notice is pretty clear....liable only on inventories over 150 cartons...not applicable to those under and on vending machines.. ???

 

[The Bread Guy]

Barring new info, then, foil hat invited to Russia is it....

 

[Sheerin]

poor freakin students........There's a group i have little sympathy for. Specialy those who live with mom and dad rent-free.  before the CF strted paying for everything i got my education and i shelled out money for books just like any other student.  i was married and raising 2 yound kids.  I didnt get any help like loans and grants....give me a freakin break !!

You do realise that the vast majority of university students go to schools that are outside of their home towns right? 
I suspect you really have no idea what hardships students face, but I don't blame you for that.  You're entitled to your opinion as am I.  Congratulations on surviving without help.  There are many students who attempt this and fail miserably, mostly becuase tuition has increased dramatically over the past few years.  of course that doesn't really mean anything, does it?

And yes, I admit its nice to have the extra money from the 1% cut, but in all honesty the government could be doing so much more to help those who really need it.  That 1% is almost a slap in the face to those who can't afford jack. 

 

[HItorMiss]

OK Sheerin so let me get this straight your saving $9.20 a year "just" on coffee? and your complaining?

As Aesop pointed out, do that 1% decrease in all your bills to which your paying GST and you'll see that it may just be $9.20 on coffee that you see this instant but when the rest of your bills start coming in lower then before how much do you think you will be saving?

Add to that the drop of another 1% in a years time (providing the Conservatives stick to the plan) so everyone will then be saving 2%. I'm not seeing a down side here at all?

Then again, hey what do I know I just count to 29 and change Mag's.

 

[Kat Stevens]

So, as I understand this, and please forgive a dumb ol' Alberta redneck highschool dropout,  I'm paying 1% less tax on every single item I purchase, than I did 6 months ago.  Again, I'm unedjikated, but it sounds okay to me.

 

[HItorMiss]

Yup Kat you have it right.

And even Sheerins "poor" hard done by students are now saving 1% on tuition and books and cost of living. You know there was a time when my wife was a student and in her words every little bit helped. Guess now days it's not how much you can do do help save and make it work, it's more about Hey Government Gimme Gimme Gimme, And when the do give it's not enough for everybody so it can't therefore be a good thing.

 

[aesop081]

You do realise that the vast majority of university students go to schools that are outside of their home towns right? 

Yeah , i realize that

I suspect you really have no idea what hardships students face, but I don't blame you for that.  You're entitled to your opinion as am I.  Congratulations on surviving without help.  There are many students who attempt this and fail miserably, mostly becuase tuition has increased dramatically over the past few years.  of course that doesn't really mean anything, does it?

I've dated enough university girls to know exactly whats its like.  Last year i was dating a girl out of medical school so i am acutely aware of the"hardships" they face.  Dont sit there and type away trying to lecture me.  I did it myself with much larger challenges than paying for books while making sure i have enough money to party every weekend.

And yes, I admit its nice to have the extra money from the 1% cut, but in all honesty the government could be doing so much more to help those who really need it.  That 1% is almost a slap in the face to those who can't afford jack. 

Even someone who can't afford much should be happy to pay less for whatever he/she does have to buy.  I worked hard toget to the point where i can buy just about anything i want, the cut is definately not a kick in the nuts

 

[Kat Stevens]

"That 1% is almost a slap in the face to those who can't afford jack.  "


They can now afford exactly 1% more jack than they did under the Libs, right?  A slap in the face would be tp up the GST by 3%.... less tax good, more tax bad.... really, these complex economic concepts leave me battered and fried.

 

[GAP]

It's not enough, and will NEVER be enough, but you have to start somewhere. 

 

[Redeye]

They can now afford exactly 1% more jack than they did under the Libs, right?  A slap in the face would be tp up the GST by 3%.... less tax good, more tax bad.... really, these complex economic concepts leave me battered and fried.

Well, sort of.  In terms of "complex economic concepts", the GST cut doesn't make sense for a number of reasons.  First, it's not going to passed on to consumers on a lot of things - think of all the services and so on that are rounded off to even numbers, they're going to stay the same price so you get a 1% increase in prices of a few things.  Secondly, if you want to cut taxes to improve the economic conditions of the masses, ie the middle class and so on, a cut in a consumption tax is not the best way to do it.

Then you factor in that the Conservatives actually raised both income tax rates on the lowest bracket and the personal exemption.  That means that now you're paying more income tax, and I suspect that the amount of extra income tax I'm paying is going to be more than the money I save on the GST.  I make a pretty good income, but when you break down what you purchase and whether or not it's GST-taxable, you'll see it's a pathetic amount of savings.

It's a pretty typical political play, they work on the vilified tax (which incidentally is lot more fair than the tax it replaced!), but quietly screw you on income tax.

 

[Gunner]

1% GST cut was good politics but bad government policy. 

 

[a_majoor]

1% GST cut was good politics but bad government policy. 

Cutting the GST was a relatively simple administrative action which Prime Minister Harper could carry out effectively even in a minority government position. Cutting income taxes could be promised, but would be much more difficult to pull off under the current parliament. (Of course even Prime Minister Harper could not have expected the opposition to be so totally incompetent, forgetting to show up for the third reading of the budget etc.). Now the Conservative Government has another notch in it's belt, the electorate sees they do what they say, and as been pointed out, 1% is far better than 0%.

The ultimate solution would have to be a "single tax" (i.e. a flat rate which treats every dollar equally [no special exemptions for interest or capital gains, for example]), but this would probably take an epic battle even in a majority government given the way the tax code has been perverted over the years to grant exemptions to special interests, such as allowing one off shore tax shelter which could be exploited by a shipping company to evade $700 million in Cdn taxes.........(looking up the owner of said company at the time this was done is illuminating as well).

From an economic perspective, tax cuts in general are good, and closing loopholes and exemptions are even better, since they reduce distoritons and perverse incentives in the marketplace. If the Conservatives can rack up a string of mandates, that is the general trend I will predict; cutting out loopholes and exemptions in the tax code and gradually moving towards a "single tax".

 

[GAP]

Now THAT would be nice...  ;D

 

[Gunner]

Cutting the GST was a relatively simple administrative action which Prime Minister Harper could carry out effectively even in a minority government position. Cutting income taxes could be promised, but would be much more difficult to pull off under the current parliament. (Of course even Prime Minister Harper could not have expected the opposition to be so totally incompetent, forgetting to show up for the third reading of the budget etc.). Now the Conservative Government has another notch in it's belt, the electorate sees they do what they say, and as been pointed out, 1% is far better than 0%.

A consumption tax is much more efficient means of generating government revenue, much more so than the large bureaucracy that has become Revenue Canada (or CCRA or whatever they are calling themselves these days).  Consumption taxes focus on taxing what you buy vice what you make, or taxes for simply having a job (ie payroll taxes).  Flat tax critics would point out there is no disincentive to earn as much as you can, whereas with personal income tax, there is.  Hence, the cutting of the GST, a consumption tax was bad government policy.  It was, as you rightly point out, good politics.  The Conservatives can now show that they have kept a promise and wrap themselves in the "looking out for the little guy".  Unfortunately, this move was generally revenue neutral as they reversed the cuts by the Liberals from November.
 

The ultimate solution would have to be a "single tax" (i.e. a flat rate which treats every dollar equally [no special exemptions for interest or capital gains, for example]), but this would probably take an epic battle even in a majority government given the way the tax code has been perverted over the years to grant exemptions to special interests, such as allowing one off shore tax shelter which could be exploited by a shipping company to evade $700 million in Cdn taxes.........(looking up the owner of said company at the time this was done is illuminating as well).

I would be comfortable with a flat tax, with a high personal exemption which is similar to what Alberta has.

From an economic perspective, tax cuts in general are good, and closing loopholes and exemptions are even better, since they reduce distoritons and perverse incentives in the marketplace. If the Conservatives can rack up a string of mandates, that is the general trend I will predict; cutting out loopholes and exemptions in the tax code and gradually moving towards a "single tax".

 

In general yes, however, cutting taxes during a economic boom period places additional stimulus into the economy.  I would have much preferred a legislated 40 year plan to pay off the national debt (or at least significantly reduce it) or, in the short term, move the EI system out of general revenues into a self supporting plan (ie CPP).  Unfortunately the Federal Government is taking in too much and have been spending like drunken sailors (apologies to the drunken sailors out there).  My advice, solidify our current financial picture with a long term view at maintaining financial stability featuring targeted tax cuts at the middle income earners.

 

[paracowboy]

I dunno. I have a certain amount of faith in a man that is an economist by trade, with a vested interest in the situation, to do the right thing when it comes to monetary matters.

More to the point for me, he kept his word. That counts for a lot. And it's certainly far more than his two immediate predecessors ever did.

 

[Gunner]

I have a certain amount of faith in a man that is an economist by trade, with a vested interest in the situation, to do the right thing when it comes to monetary matters.

When you are posted to Goose Bay as part of the new Rapid Reaction Battalions, are you going to say that the MND was a former BGen  by trade, with a vested interest in the situation, to do the right thing when it comes to military matters...  As an economist, he may say something similar to me, but as the leader of a political party, he is carrying out their platform (right or wrong).

More to the point for me, he kept his word. That counts for a lot. And it's certainly far more than his two immediate predecessors ever did.

Totally agree.  The Liberals are famous for doing the opposite of what they campaign on (Trudeau using wage and price controls after campaigning against the Conservatives platfrom in the 70s and Cretien campaign to cut the GST....).  Politicians (of all political stripes) are masters of doublespeak and we need to keep them accountable.