GST cut

[vonGarvin]

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?

What about those students?  Miss so and so just happens to spend, in taxes, about the same as the student who paid tax for books (which, by the way, aren't they deductibles at the end of the day?)
So, in summation, I take your post to imply that we should tax the rich more and leave the lower income groups alone.  Punishment for financial success?  I don't buy it.

By the way, the 7% on 700 is 49 bucks.  6% on 700 is 42 bucks.  A savings of 5 bucks.  If you feel that this is a pittance, well, good for you.  Send your five bucks to me and we'll call it even

 

[Shec]

Not that I am cynical but how long, you figure, before some provinces start hiking their PST by 1% ?

 

[GAP]

As long as the Conservatives don't have to take the political heat for it, go for it.....but there will be a price at the polls !!!

 

[George Wallace]

Not that I am cynical but how long, you figure, before some provinces start hiking their PST by 1% ?

That would probably be 'political suicide' in the next Provincial Election.

Especially if it were a Liberal Government.

 

[techie]

Not that I am cynical but how long, you figure, before some provinces start hiking their PST by 1% ?

Ill admit, i don't know about how Government finances work, but i don't see how the cut in GST would affect the Provinces. Again as far as i know, the GST is a federal tax, where PST is provincial. If the Cut in GST dosnt affect the Province, there would be no reason to raise the PST.

 

[Sheerin]

Well the government is doing a pretty good job on taxing the poor, raising their tax rate while at the same time lowering the GST.

Why exactly does the government feel the need to punish groups that are hoovering just above the poverty line and in the case of most students, well below the line.  I am by no means an advocating a free ride for anyone, i just would like it if the government didn't make it so difficult for people who are actually trying to make themselves better.  How exactly would harm society by reducing the financial load on university and college students? 

 

[paffomaybe]

Ill admit, i don't know about how Government finances work, but i don't see how the cut in GST would affect the Provinces. Again as far as i know, the GST is a federal tax, where PST is provincial. If the Cut in GST dosnt affect the Province, there would be no reason to raise the PST.

I believe it's called "surplus tax capacity."  A population is used to being taxed on consumption over a period of time, so a drop in the GST leaves room for the provinces to raise their PST in order to lessen their dependence on federal funding like equalization, and pay for their own programs and responsibilities under the constitution.

The Conservatives aren't only being politically smart by enacting a simple tax cut and keeping their promise.  They're being ideologically consistent as well - they believe in small govt, and small govts should naturally collect less tax for their share of governing responsibility, and that provinces should pay for their own responsibilities instead of relying on federal funds like equalization.  By enacting the 1% cut in the GST, they succeed in doing the following:

- Immediately reducing the amount of tax collected by the feds, in effect forcing the govt to be smaller ("making do with less").
- Implicitly winking to the provinces that if they wish to do so, they can raise their PST by 1% (with no political repercussions to themselves, natch.)
- And in doing so, sending out the message that they intend to wean provinces off federal pogey (equalization is the likely victim to be hacked by the Cons.)
- And also sending out the message that stuff like health and education is ultimately a provincial responsibility, the days of feeding off the fat federal trough are coming to an end, so you'd best seriously consider ways to fund it yourselves, kids. 
- Consequently, the big PR blitz in military spending seems to also be sending out a message:  a Conservative govt will take it's own constitutional responsibilities, like defence, very seriously.

 

[dapaterson]

By the way, the 7% on 700 is 49 bucks.  6% on 700 is 42 bucks.  A savings of 5 bucks.  If you feel that this is a pittance, well, good for you.  Send your five bucks to me and we'll call it even

Apparently, vonGarvin wasn't a math student...  

Sheerin: University students are already heavily subsidised.  Perhaps a better method would be to remove all direct and indirect subsidies to universities, have them charge the full cost of education to their students, then governments could use the offset expenditure to reduce income taxes for new grads, helping them pay down their debt.  You stay in Canada, you get a nice tax write-off.  You take your degree to the US or Britain or somewhere else, and our banks make a healthy profit.

 

[vonGarvin]

Apparently, vonGarvin wasn't a math student...  

OK.  49-42 is five bucks PLUS two more bucks for the invisible governemnt

Hey, I'm working on 2 hours of sleep here: give me a break

 

[Shec]

Thanks for responding before I could Paffomaybe.  With the provinces already up in arms about PM's proposed revamping of the equalization program Premiers could make a grab for that surplus tax capacity; plausibly accusing Ottawa of  forcing them to raise PST by shifting the burden to own-source revenues to fund provincial responsibilities.

 

[techie]

So, even though Harper dropped the GST, and raised the Income tax(which as far as i read, we will be paying more in the long run) the provinces can go ahead and raises the PST and in turn, making us pay more.

7% Gst goes to 6% (already happened)
base Fed income tax goes from 15.5% to 16 %(already happened)

8% PST goes to 9%(could happen)

Looks we are paying more now(right?) and after the PST is raised(which might happen?)we will be paying even more. Wow, they did some good manipulating of the public.

 

[GAP]

Yeah, but the point that Flattery and Harper have been making these past months is that The Federal Government get the *ell out of provincial jurisdiction and said funding, they have enough on their own plate to worry about (Libs like the control factor), and let the provinces run and FUND their own social programs. Hmmm....makes sense to me

 

[vonGarvin]

base Fed income tax goes from 15.5% to 16 %(already happened)

Well, last fiscal year, it was at 16%.  Libs lowered it to 15% (I believe).  Cons wanted to delete the liberal cut but deferred to go halfway: 15.5%.  I think these are the numbers.
Anyway, 0.5% on the base amount (15K give or take?) is 75 bucks.  If you spend more than 7500 a year on GST taxable "stuff", you'll come out spending less this fiscal year.

 

[FastEddy]

So, even though Harper dropped the GST, and raised the Income tax(which as far as i read, we will be paying more in the long run) the provinces can go ahead and raises the PST and in turn, making us pay more.

7% Gst goes to 6% (already happened)
base Fed income tax goes from 15.5% to 16 %(already happened)

8% PST goes to 9%(could happen)

Looks we are paying more now(right?) and after the PST is raised(which might happen?)we will be paying even more. Wow, they did some good manipulating of the public.

Your absolutely right !, but every cloud has a silver lining (so they say), to be meaningfull get rid of it all together. But lets face it, its a Cash Cow, so if they did that, I'm sure the Defense Budget would not have been so generous.

Cheers.

 

[techie]

yes, my bad, the year before last it was 16%, then they lowered it to 15, then harper raised it to 15.5%

 

[paffomaybe]

Thanks for responding before I could Paffomaybe.  With the provinces already up in arms about PM's proposed revamping of the equalization program Premiers could make a grab for that surplus tax capacity; plausibly accusing Ottawa of forcing them to raise PST by shifting the burden to own-source revenues to fund provincial responsibilities.

Cool. 

Personally, I think that it's a stretch politically to make the general voting public aware of the nuances of surplus tax capacity, and convert that into votes, especially if you're an unpopular incumbent like the provincial Liberals.  Thus, I don't think Guinty McDalton will be raising the Ontario PST any time soon - which I think they should.  Things are falling apart in this province - power shortages, failing education, failing health, rising urban crime, etc. - and there doesn't look to be any relief on the horizon.  The biggest fear I have is that, the federal Conservatives being undoubtedly western-biased, and with their focus on Quebec for that electoral majority, Ontario will be screwed with an even bigger fiscal imbalance. 

 

[vonGarvin]

yes, my bad, the year before last it was 16%, then they lowered it to 15, then harper raised it to 15.5%

It was lowered to 15% prior the announcement of the election, Revenue Canada amended their forms (which were then shipped out) prior to it receiving approval.  The Conservatives allowed it to stay at 15% for the FY 05-06.  It now stands at 15.5%.  

 

[techie]

It was lowered to 15% prior the announcement of the election, Revenue Canada amended their forms (which were then shipped out) prior to it receiving approval.  The Conservatives allowed it to stay at 15% for the FY 05-06.  It now stands at 15.5%. 

yeah, thats what i meant....

 

[Shec]

Cool. 

Personally, I think that it's a stretch politically to make the general voting public aware of the nuances of surplus tax capacity, and convert that into votes, especially if you're an unpopular incumbent like the provincial Liberals.  Thus, I don't think Guinty McDalton will be raising the Ontario PST any time soon - which I think they should.  Things are falling apart in this province - power shortages, failing education, failing health, rising urban crime, etc. - and there doesn't look to be any relief on the horizon.  The biggest fear I have is that, being undoubtedly western-biased, and with their focus on Quebec for that electoral majority, Ontario will be screwed with an even bigger fiscal imbalance. 

Could be but nuances don't count in campaign politics as much as perceptions do.  If the perception created is that some provinces have to tax you more to maintain a minimum level of already strained services because the Fed is off-loading John Q. Citizen might buy it.    Its just the line I would expect to hear from Premier I'm Named After An Australian Drinking Song.

Under the revamped equalization plan as I understand it, natural resource revenues will be deducted from equalization payments which ticks off Newfoundland & Saskatchewan but, unless poutine is a natural resource, works well for Quebec. 
 

 

[paffomaybe]

Could be but nuances don't count in campaign politics as much as perceptions do and if the perception created is that some provinces have to tax you more to maintain a minimum level of already strained services because the senior government is off-loading John Q. Citizen might buy it. 

Hey, if they do buy it, it'll be the first partisan vomit I'd swallow from McDalton, only 'cause it's actually true!  Too bad his credibility is already gone because of all the other vomit.  Or, maybe not.