Thursday, December 01, 2005


"The goods and services tax is a stupid, inept and incompetent tax''
--Paul Martin, House of Commons, November 28, 1989

After every Liberal spin, repeat. After every Martin speech, repeat.

The Conservatives have announced that they will immediately cut the GST by 1% and then another percent by the end of their term. I love this policy, so I will do my duty and defend it. Some arguments are political, some policy.

Argument #1: It's symbolic.

If anything, this annoucement tells Canadians: "You're overtaxed. We get that." This isn't the government's money, its our money. Yes, there have been many tax cuts announced by the FIBerals, but none that will affect each and every Canadian.

In that sense, this is the most progressive tax cut we have seen in 12 years.
Its also bold--it reenforces the idea that the CPC are agents of change and that we are thinking outside of the box. Don't forget--almost 60% of Canddians think itas time for a change. This policy is unlike anything else at out there.

Argument #2: Why stop there?

In 2000, Andrew Coyne stated that cutting the GST is bad policy:

"Why is cutting the GST a bad idea? The issue isn't cutting taxes per se... the question is which taxes. It's no good saying "all of them" -- if it is more urgent that some taxes be cut than others, than any cut in the [GST] must leave less room to cut [income taxes]."

That's a big "if". While I agree that income taxes should be cut, who says they won't be? Yearly budget surpluses tell me that the government is taking in too much revenue. That revenue needs to be given back to the people. The GST cut will undoubtedly spur economic growth, which will lead to more opportunities to cut other taxes.

Tax cuts aren't made in a vaccuum--they have a positive economic effect on the economy. Coyne is unfortunately buying into the idea that you lose revenue when you cut taxes. But study after study (and my 1st year Economics textbook from university) will twll you that when people keep more of their money they will spend a lot of it.

Even still, are you telling me that under a Harper government we won't find further efficiencies? I'll point you in the right direction: the gun registry.

Argument #3: The FIBs can't say boo

In 1993 they promised to scrap the GST. If that was a good policy then, with such a wonderful economy (says Martin) then it MUST be a great policy now.

So says PM Chretien AFTER the '93 election: "We hate it and we will kill it" (House of Commons, May 2, 1994).

Oh, and for good measure, I'll throw in an NDP quote: "[The GST is] the most regressive and difficult tax in the history of this country" (Lorne Nystrom, November 1, 1999).

Apparently, this policy has all the support of the national parties. Should get through even a minority parliament.

Argument #3: Timing couldn't be better

What a wonderful time to be announcing a cut to the GST: when regular, working families are out buying gifts for their loved ones.
No where does that policy hit you in the face than at the cash register.

Argument #4: We control the agenda

CP is now reporting that Martin and the Liberals are defending the GST. He has to defend the status quo. He has to defend what has been called the "most hated tax in history".

Sucks to be you. Don't think that was what their message of the day was.

Now we only need 50-odd more days of that.

Great announcement.

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