Monday, November 12, 2007

Walkom On The GST

The T.O. Star's Thomas Walkom thinks Harper's GST cut is a terrific idea, and thinks "left-liberals" shouldn't be criticizing him for it.

The New Democrats say the tax cut favours the rich. Liberal leader Stéphane Dion says it is so odious that, if elected, he might reverse it.

And yet many of these same left-liberals were equally outraged this week by a new study pointing out that the tax system has become less fair since 1990 because (wait for it) governments have been relying too much on regressive sales taxes like the GST.

First, note the clever phrasing: "sales taxes like the GST". These words are all that prevent Walkom from utterly mis-representing the study in question, which 1) does not call for GST cuts and 2) singles out the GST for being unlike these other sales taxes in not contributing to an increase in regressiveness in the Canadian tax system from 1990 on. Author Mark Lee writes:

...an important caveat is that at the bottom of the distribution, the regressive impact of the GST is offset by the GST credit.

Overall there was essentially no change arising from the shift to the GST in 1991. The GST generated net revenues similar to the federal manufacturers sales tax that it replaced...

Okay, Walkom might argue, but the GST is still a regressive tax, and cutting it is still a "small blow for social justice". Well, maybe, but the problem is that cutting a sales tax is the least effective means of getting money into the hands of low income Canadians. The cut has to make it through to the consumer without first getting scooped up by manufacturers, wholesalers, and so forth. And if you want to see an example where this did not happen, just take a look at the Tories first GST cut.

Here's Stats Canada from June of 2006 (emphasis mine):

Since the price changes measured by the CPI take into account the value of the consumption taxes paid by Canadians, this 1% decrease will have an impact on the CPI.A rough estimation of the impact of this reduction on the level of the CPI suggests a decrease in the order of 0.6%.

This estimation is based on the assumption that the entire amount of the decrease will be transferred to consumers and that the industrial structure that underlies the way that prices are determined will remain the same.

And here's Stat's Canada from the very next month (emphasis mine):

On a monthly basis, the CPI increased 0.1% in July. This suggests that price increase pressures were important enough in July to more than compensate for the expected effect of the 1.0% reduction in the GST.The CPI release in The Daily on July 21, 2006, suggested that the CPI could fall by roughly 0.6% following the 1.0% reduction in the GST. Based on a simulation exercise, this estimation rests on the assumption that the entire amount of the decrease is transferred to consumers and that the industrial structure that underlies the way that prices are determined remains the same. In addition, this measure of impact does not take into account the increase in the Federal excise taxes on tobacco products and alcoholic beverages announced by the government.

Clearly, a good portion of the cut went down the rabbit hole long before it got to the consumer.

PS. Mr Walkom suggests at the beginning of his piece that Stephen Harper is not Satan, but I don't understand how he can know that. We won't know that for certain until we can get a cell sample from Stephen's horn.

20 comments:

Ti-Guy said...

I love the dainty asterisk the anonymous cunt uses as an homage to civility.

Anonymous said...

The more money that stays OUT of any gov'ts hands, the better.

I'll contribute money to my own social causes, not the ones somebody else decides are valid.

Anonymous said...

ti-guy, you are as classy as ever.

Anonymous said...

"The T.O. Star's Thomas Walkom thinks Harper's GST cut is a terrific idea, and thinks "left-liberals" shouldn't be criticizing him for it."

What a monster! Somebody muzzle him quick lest the Toronto Star join the rest of our media and becomes nothing but a pro-Harper echo chamber. Harper is pure evil and will destroy the country (only if he gets a majority, though).

"Well, maybe, but the problem is that cutting a sales tax is the least effective means of getting money into the hands of low income Canadians."

Which is precisely why we need to elect Stephane Dion and bring in what the poor really need ... deep corporate tax cuts.

Raging Ranter said...

What sales tax increases have we seen since 1990? Most provincial sales taxes are about where they were then, give or take a point. The exception is Saskatchewan, which had a 9% PST in the early to mid-90s, that since been cut to 5% by their former NDP government. (Seems like Conservatives aren't the only ones favouring sales tax relief.)

Also, the argument that the GST credit offsets the regressive effects of the GST is a complete red herring. The GST credit is the same size now as it was when the GST was 7%. The poor are getting the exact same GST relief they were getting then, and also paying less GST on clothing, toiletries, and other necessities. I'm not trying to portray the GST as a fantastic strike against poverty - clearly it's not. Nor is it completely insignificant.

Finally, the argument that the GST cut hasn't reached comsumers is BS. Has 100% of it reached consumers? No. Many small shop keepers, convenience stores, etc. have absorbed the difference. And why not? It's not like the small grocery store owned by the nice family down the street from me is pulling in millions a year. I don't begrudge the extra cent going to them at all. However, most businesses did not raise prices in response to the GST cut. And right now, many are in fact cutting prices in response to the strong dollar.

bigcitylib said...

RR

"Has 100% of it reached consumers? No. Many small shop keepers, convenience stores, etc. have absorbed the difference. And why not?"

If Harper portrayed it as a cut primarily for middle-men, and then kind of loosely for the consumer after the majority of it has already been divvied up, then I suppose it wouldn't be an issue.

Ti-Guy said...

The only thing Flaming Panties and I ever agreed on was consumption taxes. And just look at how he's defending his stupid Conservatives now.

...Round up the accountants (they're all Arthur Andersen types) and gas them. It's the only way to be sure.

Raging Ranter said...

Actually Ti-Guy, I've haven't exactly stated enthusiastic support for the GST cuts have I? I'm only defending the cuts against some of the more specious claims out there.

In fact, I've always had and continue to have a very strong preference for income tax cuts. However, given the option between paltry income tax cuts and expensive new social programs from the Liberals, or significant GST relief from the Conservatives (along with restoring the paltry Liberal income tax cuts), I'll take the Conservative option.

I will concede, though, that you have a point. Congratulations. While having a point is the reason most of us post in the first place, it is a rarity for you, and I commend you for it. Baby-steps.

Ti-Guy said...

I'm only defending the cuts against some of the more specious claims out there.

...and those specious claims would be?...

While having a point is the reason most of us post in the first place, it is a rarity for you...

Why so conciliatory, Flaming? Did "Knight of the Right" give up sucking your cock?

I refuse to take you seriously until I have documented proof that you've touched a woman's breast.

Raging Ranter said...

Specious claims such as these:

"Retailers have simply raised their prices and absorbed the entire GST cut for themselves."

"The Liberals would be slashing income taxes right now instead of the GST."

"The poor don't pay any GST."

"The GST cut is inflationary."

"Economists say the GST is bad for the economy." (This last one is especially moronic. Economists are unanimous in their belief that income tax cuts and corporate tax cuts are better for the economy than GST cuts, but they do not argue that the GST cut is bad. It's just not as good as other tax cuts.)

BCL has touched on some of the above themes, though not all of them. There are numerous other ridiculous claims made against cutting the GST, but those are a few.

I was conciliatory because, unlike you, I am able to read comments and respond objectively, even if I normally disagree with the person, and even if that person is a disturbed, degenerate asshole. You made a valid point, and I acknowledged it. Also, since I am not a sociopath like you, I am capable of feeling pity for someone so obviously......troubled.

As for the rest of your comment, I had no idea you'd be so emotionally scarred by those few posts I made on KOTR's site. Had I known, I'd have left many more. In any case, I suspect your emotional difficulties (extreme narcissism, paranoia, inability to stop talking about men's cocks, constant suggestions of fellatio) started well before that.

Ti-Guy said...

Specious claims such as these:

Unsourced as usual. Jesus, Flaming..doesn't H&R Block deal with ethics?

By the way, Flaming...what happened to the lovely photo of you that used to grace your blog? The one where, despite your doughy complexion and your melon-like face, you looked so fetching in your Tilley hat?

In any case, I told you...documented proof of hand on, or near, aureola...

Raging Ranter said...

That's an entire post without one reference to cocks. Congratulations again!

As for your request, does it not strike you as a little strange to be asking another man over the Internet for pictures of him engaged in a sexual act, even if it only involves breasts? I mean, I'm no prude, but that just seems so....inappropriate.

Can I not instead just refer you to some websites where numerous pictures of breast activity are available for your enjoyment? I'll even see if I can find some cocks for you to look at. Shouldn't be hard - ahem, difficult really.

Ti-Guy said...

Stop deflecting. You're a virgin...admit it.

Anonymous said...

It's no use arguing with ti-guy. He's like a bitter, emasculated weed who's angry at the world for some reason, with an angry fascination about all things sexual. He always seems to use sexual imagery in his derogatory comments.

Actually, it's pretty clearly now what his problem is.

Ti-Guy said...

He always seems to use sexual imagery in his derogatory comments.

Because sexuality outrages fascists. Fascism is fundamentally anti-eros.

Think about that the next time you're strapped to the butt-plug chair with a ball-gag in your mouth.

Raging Ranter said...

Anonymous said...

It's no use arguing with ti-guy. He's like a bitter, emasculated weed who's angry at the world for some reason, with an angry fascination about all things sexual. He always seems to use sexual imagery in his derogatory comments.

Actually, it's pretty clearly now what his problem is.


His problems are as numerous as they are incurable. If the Ti-Guy in real life is anything like his online persona, he is quite possibly a danger to those around him.

Anonymous said...

ti-guy is just trying to prove that even though he wears dress socks with sandles he can still pretend he's a "tough guy"

Raging Ranter said...

Are you kidding? I call the police whenever I see socks with sandals.

Ti's not kidding here. He calls the police for all kinds of reasons. He reported me to the police once for reasons known only to himself. He felt threatened by one of my posts or something. Of course, the Gatineau Police humoured him to his face, then dismissed him for the loon that he is. They get guys like that wondering into the police department every day.

As for socks and sandals, I believe Ti-Guy once commented that he prefers argyle socks when he wears sandals. Ideally, he likes the socks pulled right up to the knees, but that can vary depending on his mood.

Ti-Guy said...

I've seen your picture, fatty. Fashion insults aren't where you should be going in this lame-war.

And it wasn't the Gatineau police...it was the RCMP.

Raging Ranter said...

Given that you've spent a good portion of your adult life in an orange jumpsuit, I guess fashion isn't your favourite topic.