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Harper wants a reduction in the GST (and why reducing the GST is not a good idea) (pg. 5)
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| Moral Hazard |
| quote: | Originally posted by rabbitjoker
Interest is already deductible as an expense on investments (including mortgages).
Primary residence mortgage interest deductibility only leads to people over-extending themselves. Massive consumer debt (including mortgages) is a burden on the economy. I suggest you read more into this and you will quickly see that on the surface it appears to make sense, but in practice it is very dangerous. |
True, however, I have not overextended myself and I'm being selfish at the moment. |
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| malek |
| intrests on the mortgage of the house you live in is tax deductible??!?! oMGBBQ |
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| Ub3rBreaker |
Just wanted to metion a couple things that came up to my mind while reading ur argument... I could be wrong, i prob should look more into it but im too lazy
| quote: | Originally posted by rabbitjoker
2) Lowering GST will not increase personal savings or reduce personal debt.
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Yup, it is true that GST does help the economy. But thinking in a two-period closed economy macro level, it would all depend on how the consumer chooses to spend the increase in disposable income.
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Lowering the GST will encourage increased consumer spending (and increased inflation).
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I think that an increase in consumer spending will not technically lead to a increase in inflation. Who controls inflation has you've said is Bank of Canada by adjusting the interest rates (Low Vs. High interest rates)... a increase in consumer consuption only reflects the increase in disposable income, it could potentially lead to an increase in interest rates (becuase of the increased money flow) which would then lead to decrease in the money supply (because of high interest rates) therefore if anything decreasing or keep Inflation constant.
Again... im possibly wrong :wtf: |
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| rabbitjoker |
| quote: | Originally posted by malek
intrests on the mortgage of the house you live in is tax deductible??!?! oMGBBQ |
If it is your primary residence, no. If it an investment property (a property used to generate income of some sort), yes. One deducts the interest as an expense against the income genreated. |
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| malek |
| quote: | Originally posted by rabbitjoker
If it your primary residence, no. |
thought so :) |
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| Jayx1 |
Again, this GST break will simply offset the price increases in gas and electricity. There will be no inflation. If we were to worry about inflation then we should be worring about Liberal spending.
As one economist put it. "Usually government spending is increased to stimulate the economy. However, our economy needs no stimulation. What the Liberals are doing here is stimulating voting instead."
ahahahahahah Brilliant!
And if we were to take this inflation scenerio a step further and assume it's real, then the Liberals should be on the hook for the tax cuts they just proposed as well. Of course the media and lefties would never dare do that would they? |
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| rabbitjoker |
| quote: | Originally posted by Ub3rBreaker
Yup, it is true that GST does help the economy. But thinking in a two-period closed economy macro level, it would all depend on how the consumer chooses to spend the increase in disposable income. |
Decreasing consumption taxes does not change post-tax income. The benefit is only realized if one continues to consume (spend). Thus the reason why a reduction in consumption tax does not increase consumer savings nor does it decrease consumer debt. Reduction in income tax is not related to consumption - thus it's effects are more directly related to savings and debt reduction.
| quote: | Originally posted by Ub3rBreaker
I think that an increase in consumer spending will not technically lead to a increase in inflation. Who controls inflation has you've said is Bank of Canada by adjusting the interest rates (Low Vs. High interest rates)... a increase in consumer consuption only reflects the increase in disposable income, it could potentially lead to an increase in interest rates (becuase of the increased money flow) which would then lead to decrease in the money supply (because of high interest rates) therefore if anything decreasing or keep Inflation constant. |
You've left demand out of your analysis. |
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| Moral Hazard |
| quote: | Originally posted by Jayx1
Again, this GST break will simply offset the price increases in gas and electricity. |
engergy costs are not included in the CPI therefore have no direct effect on inflation. |
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| Jayx1 |
| quote: | Originally posted by Moral Hazard
engergy costs are not included in the CPI therefore have no direct effect on inflation. |
But since all our extra money is going to pay the increases in these things, it wont be spent on other things that may drive inflation. That was my point. |
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| MarkT |
| quote: | Originally posted by Jayx1
*THEY* did not implement that tax. The party that did this no longer exists.
And yes you are correct about double standards. The PCs were damned when they put in the GST and the Conservatives are damned when they want to reduce it. But hey everyone thought it was a great idea when the Liberals promised to scrap it in their red book promises of 1993. Of course Liberals being Liberals they broke that promise. What else is new? |
come on, did you say that first part with a straigh face? :P
Then why did they not just keep the Alliance name and ditch the Conservative one, given that 95% of the MPs were alliance MPs, right? Answer...because they are most definitely tapping into the history of the old Conservative Party (when it suits them).
And you're right, the PCs were damned when they put it in and damned now for suggesting lowering it...but if you're against double standards, then you're against double standards. You can't have it both ways.
i.e. It's a double standard in itself to cry double standard when the Cons are criticized (first for implementing GST, then when they seek to repeal it), yet you invoke a double standard when the Liberals are involved (collectiong too much tax, then giving it back).
so...you either have to allow the Liberals to spend without criticism for over collection...or you have to bash the Conservatives for repealing what they implemented in the first place.
so which will it be? ;)
| quote: | Originally posted by rabbitjoker
If it is your primary residence, no. If it an investment property (a property used to generate income of some sort), yes. One deducts the interest as an expense against the income genreated. |
correct!
| quote: | Originally posted by Matt
That's a really good idea, kind of like how you would close all your Liberal scandal threads before the Gomery report came out. :rolleyes: |
PWNED! :stongue: |
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| Jayx1 |
Hey I have no problems with Liberal tax cuts. I just find it amusing how they were against them until suddenly the polls suggested that Canadians want them. But how are we to believe that the Liberals will implement them? After all they are the party of broken promises arent they?
As for the PC debate. Im sure there are some who consider themselves the old PC party (those who are from the old PC party most notably) and those who do not. I dont happen to think they are. They are a new party with some elements of the old in it.
Just like Borden's Unionists were a whole new party back in 1918 when part of the Liberal party succeeded the party and joined the Conservatives to form a coalition government under the "union banner". |
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| musicsnob_NOT |
| quote: | Originally posted by MarkT
the Liberals are criticized for now spending the money that they "took" from us during the surplus years and are slammed by critics.
the Conservatives will reduce the rate of a tax which THEY implemented in the first place, and it's a "good idea"?
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The Liberals should be criticized for spending the money they took from us - espically here in Ontario.
The PC's did implement the GST and in fact it is a very good tax and much better than the one it REPLACED - it wasn't a new tax -
If any party had any guts what they should do is decrease the GST but apply it to EVERYTHING, including basic food items etc. The simplier the tax, the harder to avoid, the better. Lower it to 4%, put it on everything and give more and bigger rebates to the people who need it.
Will anyone have the balls to do it? No. |
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