Canada: time to raise the GST back to 6% or 7%

Tuesday, November 03, 2009

The lowering of the GST from its previous 7% to 6% and then 5% was a campaign promise by the Conservatives, but now that the country has been running a deficit for a while it's time to rethink this strategy as only tax hikes or spending cuts will be able to deal with the deficit. Spending cuts can't really be accomplished at this time since it was only a year ago that the opposition attempted to take power through a coalition - the real reason for the coalition of course was the taking of power itself, but the reason given at the time was that the country needed a new economic approach including a lot of stimulus spending, and that's what the country got. Spending cuts at roughly the same time would be an odd counterbalance to this.

The GST needs to be raised again and kept at a higher level until the debt is paid off (though one proposed plan only recommends raising it to 6% over 2 years, perhaps to make it a bit more politically palatable). Only then should the government begin looking at lowering it again. The savings on interest payments alone when debt is paid off is phenomenal.

4 comments:

Anonymous said...

Taking people's money away and spending it on things they don't want is hardly a stimulus. I love your blog, but I suggest you stay away from economics.

데이빛 / Mithridates said...

>I suggest you stay away from economics.

Suggestion denied, Anonymous.

Anonymous said...

The GST was only supposed to be temporary and should not be raised again. I will no longer be subscribing to this blog as at is misinformed.

Socraton said...

hahahaha! Well, I guess that means that we now have to read Pagef30 without Anonymous' intelligent comments on it. :( *sigh*

Agree on first post though, The GST is too low now, and need to be raised. And most likely it will be raised in the near future, too.

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