http://www.canada.com/windsorstar/news/editorial/story.html?id=f5b7a1c8-a8d8-48e4-b9e2-e4e9b9663339
Ch 4
Cut Meaningful Taxes!
The article above was found in an Ontario newspaper last July. It is a response to the government’s much-heralded GST cut... from 7% to 6%. According to it, the average household would save about $300 a year because of this decrease in Goods and Services Tax. However, the government’s surplus last year was TWENTY-SIX BILLION dollars. The writers of this article suggest that this surplus would warrant more substantial tax relief than a 1% cut. They also divide the category “tax cuts” into two slightly more specific ones:
1) Tax cuts that improve the economy
2) Tax cuts that don’t do much
1) Cuts That Improve the Economy
Tax cuts that do fall in Category One, such as income tax cuts, encourage people to be more productive at work. Why? Income tax rates in Canada are pretty high, meaning that the harder you work, the more taxes you have to pay (because you earn more money). Doesn’t make much sense, does it? If the government lowered INCOME taxes, people would feel better about putting more effort into their jobs because they know that they’d get to keep more of their money. Canadians, then, could be persuaded to work harder, save more, and invest more - activities that would significantly improve the economy.
2) Cuts that Don’t
The average consumer’s reaction to a 1% decrease in GST:
“Oh joy! Instead of paying SEVEN percent GST, we’ll only pay SIX percent now!” Was that your reaction? …Because it kind of was mine.
Anyway, that said, our tax cuts would fall in Category Two. The reason: What does a lower GOODS & SERVICES tax make YOU want to do?
I can think of a four-letter word starting with S. Next letter’s H. Shop! A lower GST (even though it’s only one percent, hardly noticeable) would only encourage people to spend more and not save their money, which… wouldn’t be much good when they retire and realize they’re going to have to live off canned tuna for the rest of their lives.
Chapter 4 in the book explains Canada’s high tax rates, and the uses the money generated from these income taxes are put to. Canada uses a progressive income tax system; the more you earn, the more you have to pay. Which could be translated to be an undue penalty for ambitious people willing to work hard at their jobs. However, we also have a public health care system that many people are proud of. The flip side of this is the access to health care is sub par when you consider how much money is put into it. Instead of encouraging consumer spending by decreasing GST, the government should think about decreasing income tax rates to drive Canadians to work, save, and invest.
Ch 4
Cut Meaningful Taxes!
The article above was found in an Ontario newspaper last July. It is a response to the government’s much-heralded GST cut... from 7% to 6%. According to it, the average household would save about $300 a year because of this decrease in Goods and Services Tax. However, the government’s surplus last year was TWENTY-SIX BILLION dollars. The writers of this article suggest that this surplus would warrant more substantial tax relief than a 1% cut. They also divide the category “tax cuts” into two slightly more specific ones:
1) Tax cuts that improve the economy
2) Tax cuts that don’t do much
1) Cuts That Improve the Economy
Tax cuts that do fall in Category One, such as income tax cuts, encourage people to be more productive at work. Why? Income tax rates in Canada are pretty high, meaning that the harder you work, the more taxes you have to pay (because you earn more money). Doesn’t make much sense, does it? If the government lowered INCOME taxes, people would feel better about putting more effort into their jobs because they know that they’d get to keep more of their money. Canadians, then, could be persuaded to work harder, save more, and invest more - activities that would significantly improve the economy.
2) Cuts that Don’t
The average consumer’s reaction to a 1% decrease in GST:
“Oh joy! Instead of paying SEVEN percent GST, we’ll only pay SIX percent now!” Was that your reaction? …Because it kind of was mine.
Anyway, that said, our tax cuts would fall in Category Two. The reason: What does a lower GOODS & SERVICES tax make YOU want to do?
I can think of a four-letter word starting with S. Next letter’s H. Shop! A lower GST (even though it’s only one percent, hardly noticeable) would only encourage people to spend more and not save their money, which… wouldn’t be much good when they retire and realize they’re going to have to live off canned tuna for the rest of their lives.
Chapter 4 in the book explains Canada’s high tax rates, and the uses the money generated from these income taxes are put to. Canada uses a progressive income tax system; the more you earn, the more you have to pay. Which could be translated to be an undue penalty for ambitious people willing to work hard at their jobs. However, we also have a public health care system that many people are proud of. The flip side of this is the access to health care is sub par when you consider how much money is put into it. Instead of encouraging consumer spending by decreasing GST, the government should think about decreasing income tax rates to drive Canadians to work, save, and invest.
posted by Grace at
8:03 PM
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