Friday, May 18, 2007

Liberals and the GST: Electoral Suicide

The Federal Liberals are eyeing a campaign proposal to increase the GST to fund more broad based tax cuts.

John McCallum, the party's finance critic, is understood to have pushed the idea of increasing the federal goods and services tax back to 7%.

"It's an option. All I can say is that it is consistent with our approach. But I'm not about to say that the Liberal party will raise the GST because that's not been decided," he said in an interview from Paris, where he is attending an OECD meeting.

This if this first time I ever agreed with the Canadian Taxpayers' Federation... well I only half agree.

John Williamson, national director of the Canadian Taxpayers' Federation, said he would welcome income tax cuts. But he said the idea of linking those cuts to an increase in the GST would be "electoral suicide."


MrvnMouse said...

I have to agree. It's a fantastic idea for the Liberals if they want to lose an election. In fact, it may even beat the incredible effort they put in during the last election to lose it.

There are days it feels like the strategists for the Liberals want the Conservatives to win a majority.

janfromthebruce said...

Well, they could always cut back on corporate welfare, close corporate and large business loopholes. Why do they always go after ordinary folk to pay for their largeness?

rabbit said...

It's been the tories who have been tightening corporate taxes, such as the removal of interest deductability of borrowings for foreign affiliates, and of course the ending of the income trust tax advantage.

Thus it's not quite right to say that they always go for the ordinary folk. The 1% drop in GST was a considerable boon.

Whether the above measures are good or bad, it puts the opposition in the weird position of wanting to oppose the closing of tax advantages for corporations, and for increasing consumer taxes.

Mark Dowling said...

I thought he was going to promise the City mayors (like His Blondeness) the 1 percent but apparently not.

If he had, it would have been a good thing for both urban and suburban ridings which are starting to face huge infrastructure bills and a property tax structure that is not able to handle it. I'd prefer it be a PST cent though - the provinces should not be able to shirk their responsibilities up to the feds as they download them to municipalities.