Prometheus The Supremo
►Member №41+⅜◄
don't you guys watch the commercials? steven harper knows where he stands. what else do you want?
With potentially more oil than Saudi and half the population it'll be 1AB$ = 5 CA$. I have always thought that the Albertans had much more of a reason to separate than the Quebecers....
Now that is not being a solid Canadian as I see it......this is a good example why this country is so divided, we live among people who would sell out their own country for the power of a buck.
Harper good for economy?
Let's see our economy was stable until the Conservative/Reformers took over. Now it's facing trouble and Harper has been slow to acknowledge this.
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Given this preformance people think Harper is more qualified than Dion? Harper's steady hand is steering up onto the rocks.
As to Harper's supposed mismanagement....what's he done wrong? Point it out. Show me one specific policy that's ruined the economy. The GST cut provided more stimulus per capita than all the US tax cuts last year combined. The simple fact is that our largest export market (the US) is tanking.
As for Dion...the Green Shift might be a good idea for the boom times. What impact do you think re-jigging the tax structure is going to have if we are in the midst of a recession?
As to Harper's supposed mismanagement....what's he done wrong? Point it out. Show me one specific policy that's ruined the economy. The GST cut provided more stimulus per capita than all the US tax cuts last year combined.
^^ Harper cancelled the tourist tax rebate. That makes the Canadian tourist industry less competitive, especially when the Canadian Dollar is so strong. We're one of the only places in the world where overseas tourism has gone down.
And if he really cared about the Ontario car industry, why did he wait until now to announce funding? You'd almost think there was an election campaign going on!
Cutting the GST is not sound fiscal management. It was the worst tax to cut, as you have acknowledged. It was crass politics, not sound fiscal management, but I can 'forgive' Harper this. He did after all have a 'mandate' (as he called it), with a whopping 36% of the ~60% of eligible voters cast a ballot in support of a conservative.
Cutting GST stimulates spending, which is good in the near term, but over the long haul will have negative implications for Canadian competitiveness. The GST was at least somewhat a tax on foreign goods. Now the tax burden falls more heavily on domestic producers, and less so on foreign producers. Way to stimulate the domestic manufacturing sector!
It will be phased in gradually, over four years, giving plenty of time to adjust. The tax, when fully implemented, is equivalent to $17.20 per barrel of crude ($40 per tonne, 0.43 tonne CO2 per barrel). Not exactly earth shattering, plus it will displace the existing excise tax on gasoline.
Frankly, this tax will only be a mild incentive. It's a good start, and it will enhance Canada's competitiveness by attracting foreign investment through lower income tax rates. The Liberals have also committed to lowering the corporate tax rate at the same rate (or perhaps better, with the Green Shift), as the Conservatives. That, to me, means they have a more economy-friendly tax plan.
Remember, CO2 is not a 'good' like a car, toothpaste, or a haircut. It's waste: a means to an end. It is way more appropriate to tax the means, waste, than the end, wealth (income/capital tax).
First thing he did in office was change the rules on income trusts which he said wouldn't be touched severely impacting many retirement plans, increased income tax on Canadian workers, and lowered sales tax on primarily non-necessities imported from China.
He has since lowered sales tax further and cut income taxes again but now the country has little fiscal room to maneuver with and he is rushing to the polls before people see the deficits or spending/service cuts his tax changes are about to create.
Most economists would disagree with you. Some argued that the government over-stimulated the economy and possibly contributed to inflation. Ideally, the cut would have been timed for a downturn, like now.The GST cuts did not stimulate the economy...
an increase in public sector spending stimulated the economy. Tax cuts have reduced the amount that can be spent.
David Wolf, economist at Merrill Lynch, Canada:
The annualized rate of economic growth was just 0.3% in the second quarter and government spending contributed one percentage point, annualized, to growth, meaning everything else shrank; that is the 78% of spending accounted for by consumers, private investment and net foreign demand.
If that's your yardstick, find me a government at the provincial, federal or municipal (Hazel McCallion excepted) level in the last quarter century that has gotten more than 50%. If Liberal supporters really felt that the Conservatives were so evil they would have turned out in droves to prevent their election. You can't not vote and then complain about the outcome.
That's how democracy works.
How is it a tax on foreign goods? Given our incredibly liberal trade practices, very little of what comes into this country gets duties assessed against it. Yet, unlike domestic producers, foreigners aren't paying taxes every step of the way. Foreign goods are only getting taxed at the point of retail where GST is assessed. So we could say the GST hurts domestic producers more. I am not arguing for the GST cut, but your argument against it does not apply. And the point still stands, that for our current economic situation the GST cut was an excellent stimulus.
I haven't said it would be onerous when steady state is reached. But if you think that our manufacturing sector can become efficient in 4 years you are dreaming. Most companies use time frames of anywhere between 5 and 20 years for capital cost recovery. Phasing in a tax over 4 years would be well inside their capital cycles, and therefore would be devastating. This would be like giving someone 4 years to buy a new car before you jack up the price of gasoline. As presently implemented, a Liberal government would have to give much more than a few measly points off the corporate tax rate to pull of its 'Green Shift'. It would have to give a significant tax cut or risk rising unemployment as good chunks of our manufacturing sector decide now is the right time to move overseas. That being said, its not like they can't tweak the plan to make it better....ie forget that 2012 Kyoto deadline and find a target that industry can actually achieve with less pain.
Remember, CO2 is not a 'good' like a car, toothpaste, or a haircut.
Harper gained the smallest minority in history, and took that to mean he had carte blanche. He played chicken with an opposition that couldn't afford to stage an election, because they were broke. He very deliberately avoided any real attempt at collaboration, which I would argue is what the public asked for by giving Harper the weakest mandate ever. I don't think that behaving in this way because the opposition parties are financially stressed is particularly in the spirit of democracy.
Think of it this way, the higher the value added tax (GST), and the lower the corporate tax, the more we can shift the tax burden onto foreign producers and off of domestic producers. This makes our producers more competitive, and better able to export goods, while simultaneously making imports relatively less attractive. It's tipping the playing field in favour of our firms. Don't believe me? I think the C.D. Howe website has a paper on the subject. I'll repeat, the GST cut was the worst tax to cut. The least bang for the buck. Yes, cutting tax was a good thing--they cut the wrong tax. Ask any economist.
If companies are making 20 year capital investment decisions without considerations for mitigating the risk of future energy cost increases, they are foolish and neglecting their duty to shareholders.
The tax will not be devastating, as you say. The price of oil has already declined from its peak by well over the size of the carbon tax. From present prices, the carbon tax works out to a 3.8% annualized increase in the cost of oil. If this would be devastating, the price spike of the past year must have caused the Canadian economy to close up shop for good.
I think you're also understating the effect of reducing corporate income and capital taxes, and way overstating the effect of the carbon tax. The industries that might be threatened by the carbon tax are those which aren't particularly good for our economy, such as pulp and paper. Most other industries, the ones that actually form the basis of our economy, would do quite well.
You are muddling two concepts. I agree that taxing consumption is an effective economic policy and method of raising revenue. However, your argument that the GST helps hold off foreign competition is flawed. It's trade barriers such as duties that hold off foreign competition. The GST is especially ineffective if it applies to products that were manufactured in other (lower tax) jurisdictions. For example, most countries don't tax exports. Now if we have free trade with one of these countries, the exports come here and are only taxed at the point of sale, when GST is applied. Conversely, the domestic manufacturer has to pay GST for his supplies, and he charges GST to the retailer who then also charges GST to the consumer. That's exactly what makes the GST so effective, that it takes a cut at every step of the process. And that's exactly what makes it ineffective against many imports.