About all this talk about cutting taxes
First off, the Goodale pre-election mini-budget tax cut is one heck of a lot of spin. 5% of the tax cut is retroactive for 2005 and doesn't reduce anyone's tax bill by very much. And the bulk of the tax cut starts in 2010... That and the $30 Billion he talks about is only about 30% of the excess tax take they publicly expect to have between now and then. I say publicly because I think they know there is a potential for a much larger surplus, but they are going to do everything in their power to spend as much of it as they can.
Second, the supposed leak about the Conservatives cutting the GST to 5%. Sounds like great electioneering. Bad fiscal policy. The GST isn't hurting productivity as much as capital taxes, payroll taxes and income taxes. The only good thing about cutting the GST is that it helps out low income people. But a lot of the "working poor" would get more help from a significant increase in the personal exemption. Plus every tax payer would get that benefit. I would just mean the most to low income people.
But if the Conservatives want to campaign on cutting the GST - lets do it. The Liberals will have one hell of a time dealing with that.
Second, the supposed leak about the Conservatives cutting the GST to 5%. Sounds like great electioneering. Bad fiscal policy. The GST isn't hurting productivity as much as capital taxes, payroll taxes and income taxes. The only good thing about cutting the GST is that it helps out low income people. But a lot of the "working poor" would get more help from a significant increase in the personal exemption. Plus every tax payer would get that benefit. I would just mean the most to low income people.
But if the Conservatives want to campaign on cutting the GST - lets do it. The Liberals will have one hell of a time dealing with that.
posted by Technical Bard | 10:29
3 Comments:
I have a question about the 5% tax cut. Is it the personal income tax they take off our paycheques? If the 5% is retroactive to the beginning of 05, let's say that works out to say $300.00 a year, do we get that 5% before the end of
the year. If so, we could be getting maybe $30.00 more a week. That really is a bribe. And I'll take the money and still won't vote
liberal. Their lose. Anyways, can someone answer that question. Thx.
Allan. Toronto.
My understanding of the tax cut that is retroactive for 2005 is that the lowest bracket rate is being lowered by one percentage point (ie. from 17 to 16%). When you file your 2005 taxes in the spring of 2006, you will calculate using this new number. Therefore, if your employer was deducting taxes in 2005, you will have SLIGHTLY overpaid, and therefore get a smaller refund of that amount. So at most it's like $150.
Consumption taxes are seen as regressive (placing a higher burden on the poor) because a greater proportion of purchases made by the poor is tied up in necessities.
While I'll agree with the Bard that cutting the GST isn't the most efficient tax cut available, at least it's a cut. And, it's easy to sell. Most people dislike sales taxes, even though they're better for the economy than a payroll tax like CPP.
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