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One Percent Solution?Category: Politics I was looking at computers in a local store when a woman asked me some questions about computers. (For some reason, strangers seem to think I know something about computers!) After a short discussion, she commented that perhaps she should buy her computer after the election when the Conservatives will have eliminated the GST. When I pointed out what Stephen Harper really promised, she wasn't too impressed. You've heard the old joke: How do you know when a politician is lying? When his lips move. I wouldn't necessarily accuse Harper of trying to mislead the voters of Canada. But when he talks about cutting the GST by 1%, a lot of people who aren't really paying attention will hear what they want to hear. Others have done the math. Harper claims that the typical family of four earning $60,000 a year will save $400 with his cut to the GST. That means they must be spending $40,000 a year on taxable goods and services, leaving $20,000 for other things like housing and taxes. That just doesn't add up. But listen carefully to Harper, very carefully. Although a savings of $400 a year is unrealistic for a 1% tax cut, he's probably referring to the savings when (or if) his promised 2% cut comes into force. He's only promising a 1% cut initially. According to a CBC report, Jim Davies, who teaches economics at the University of Western Ontario in London, referred to Harper's idea as "Stupid, stupid, stupid, stupid". (Other economics quoted in the article were more diplomatic.) Most economists agree that the better way to stimulate the economy would be to cut personal income taxes. The government could also cut income taxes in a way that would benefit the people who really need a break the most, the low income earners. However, most voters are not economists, and most politicians know how unpopular the GST is. So it's not surprising that a political leader who so desperately wants to become prime minister would try to buy votes in this manner. Hans path: /Politics | permanent link to this entry  | |||||||||||||||||||||||||||||||||||||||||||||||||
