GST Fall Out

With a bit of cut and paste here is what folks think of the Harpers proposed creation of a 5% GST. While consumption taxes are regressive in principle, they do impact more on the rich than the poor. So consider this another tax break for you know who.....

Speaking at a suburban electronics store near Toronto, Harper said the tax relief will save Canadians a total of $4.5 billion. While he he admitted that will not necessarily stimulate investment, he said "it's more effective in stimulating consumption Heading into the holiday season, the idea of consumers paying less GST is a happy thought for Future Shop salesman Jafra Husein. "As a retailer we love it," he told CTV News. "It motivates the buyer." Among the criticisms levelled at the GST cut is the disportionate 'savings' it would afford people who spend more. Lower-income Canadians, because they're not spending as much, would not realize as much savings. New Brunswick Finance Minister Jeannot Volpe says Conservative Leader Stephen Harper's promise to slash the GST would hurt this province. But party loyalty hasn't stopped Volpe, also a Conservative, from criticizing the plan. He says municipalities that have finally received a piece of the GST will suffer without it. "One per cent is over $90 million for us," said Volpe. "It means that the money will have to come from somewhere else." Finance Minister Ralph Goodale said reducing the GST favours the rich on Thursday.In an interview with CBC Newsworld, Goodale said lowering consumption taxes such as the GST is good for people who spend a lot of money. "The biggest savings will go to the biggest spenders," he said. Herbert Grubel, a senior fellow at the right-wing Fraser Institute and a former Reform MP, Grubel and Harper, also a trained economist, were once caucus colleagues, told the Vancouver Sun last month that "cutting the GST rather than business or personal income taxes may be good politics, but it is definitely very bad economics."Grubel and several other economists say business and personal income taxes are a much stronger drag on the economy because they create a disincentive for consumers. Jim Davies, who teaches economics at the University of Western Ontario in London, "Stupid, stupid, stupid, stupid," he said.