Wednesday, October 31, 2007

Goods and Services Talk...

Libleader Stephane Dion today said if elected PM (what a dreamer!), he would rescind the GST reductions made in the last year by the Conservative government.

The Grit leader said many people believe the two percentage point cut to the goods and services tax was the wrong move. He said it amounts to $34 billion that the govenrment could spend elsewhere.
Where? Kyoto? And who are these "people"? Economists, professors, blah blah blah. Why doesn't he ask the average Canadian, who in the majority, don't like this tax.

Former Deputy PM, Sheila Copps, wrote today about this very thing and said that the further GST cut was "a masterstroke":

In their rarefied world, budgets are designed solely to boost productivity. Measures to achieve other public policy objectives are deemed political, as if somehow politics has nothing to do with taxation. Economists pontificate without having to get elected. Elected officials have to measure specific advice against the bigger picture.

On that count, Finance Minister Jim Flaherty pulled off a masterstroke yesterday. Flaherty gave half a loaf to those looking for across the board personal and corporate cuts. But he ignored their railing about the GST.

He listened instead to the taxi driver and the small retailer hanging on by a thread.

Most Canadians don't like the GST and want governments to reduce it. Political parties who ignore the consensus do so at their peril. It would be suicidal for any opposition party to bring down the government on the GST.

The biggest argument against a GST reduction is how it will affect inflation and whether the Bank of Canada increased interest rates. When the GST went down from 7 to 6%, did interest rates go up?

Go to the Bank of Canada website and see. Choose the daily Bank Rate from January 1, 2006 to December 31, 2006 and click 'Get Rates'.

Look at what happened from July 1, 2006 (when the GST went down a point) and onward. Did the rate change? Nope, not one bit. The rate held steady at 4.50 all the way until July 2007 when it increased to 4.75.

So should we listen to these "experts" who talk about inflation and all that when it comes to the GST? No. Even they can't find the info, which took me 2 minutes to find on the web.

I just don't see how anyone can disagree with a tax reduction that puts more money directly into the coffers of Canadians. Dion keeps yapping about how income tax reductions are better. The GST cut also helps those who don't pay income tax at all, which they'll be more people in this category now that the personal exemption has been increased and the lowest bracket reduced by half a percent, retroactive to New Years Day of this year. Sure, it's not a lot, but anything is better than nothing.

Reports are showing that the average tax savings for a Canadian will be about $250 a year, or about $21 a month.

Methinks too, that this reduction was just the beginning. In fact, methinks the only tax reduction the Liberals would have ever done was the lower bracket going to 15% if elected.

With the small business tax going down to 11%, guys like me who receive profit sharing bonuses each year also welcome this move as my company will have more money to dish out. Then that bonus will be taxed less as well. Then when I go spend that money, they'll be less taken out even further.

Now that Flaherty has trumped the Liberals on taxes, and believe me, I was getting worried they wouldn't, the Liberals have now been squashed on the right side of the spectrum.

It'll be up to the NDP to further squish them on the left and we can finally get rid of this ideologically and principly void party called the Liberals.

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