Posted by Questionable Sanity on May 2nd, 2006
A budget for the poor, that’s the only way I can describe the current budget. Let’s briefly run through it, just so you understand where I’m coming from, and how much I love sarcasm. A decrease on business tax, retroactively eliminating the federal capital tax , (which was originally to be phased out by 2008), elimination of the funding of the Kelowna Agreement, elimination of funding of the Kyoto agreement for a “made-in Canada solution,” and an increase in the lowest income tax bracket by half a per cent. There are also tax credits for physical fitness, public transit, work… etc. It goes on. In fact, a new degree will soon be offered at Conservative taxing college in “remedial conservative tax credit 101″ due to the increase in complexity of the new tax code.
Now you say, new tax credits, reduction in GST, saving money on silly agreements made with all provinces and territories and first nations people, how could this possibly be a bad budget?
Well let’s examine the tax credits first, since this is where all the flash is. To get a tax credit, you have to spend money. If you do not have money to spend, (say because you’re in the lowest tax bracket, and they just increased your taxes to help fund the capital tax break for the ri.., I mean socially responsible people who have money to invest), then you can’t exactly get a tax credit. And keep in mind, these tax credits are up to certain amounts. For physical activity, if you spend $500, you can get a percentage of that back, %15.5 per cent… which in Ontario is just more than the tax your paying on your purchase, so really what they’re saying is, well… we shall refund you the tax your paying for physical activity. (Keep in mind, the income you’re spending on this physical activity was already taxed through income tax, so what they’re now doing is eliminating the double taxation you suffered under, not actually eliminating the taxes.) Now if you’re not physically minded, or let’s say, after your income tax, don’t have enough money to pay for sports, (remember that a tax credit doesn’t mean anything until tax time, so you’re still paying for everything up front), then of course, you don’t save your $12 or whatever ridiculously large amount of money it is you’d be getting back until you file your taxes.
Then there’s the of course, the federal capital tax they are eliminating, which is fine, since rich people re-invest that money, (and always in Canada), and create more jobs for the people, (the people in the lowest tax bracket), which can then be taxed at 15.5 per cent, which is higher than it used to be, thus increasing revenue for the government, allowing more tax breaks, (like the corporate tax drop from 21% to %19), which allows for more profit, which, in trickle down economics means more investment, (again, always in Canada), which leads to more job growth at the bottom… it’s a great cycle. It worked very well in the US after the First World War. I suggest scrapping labour laws, and banning unions, because they hamper economic growth through needless spending and higher wages - if this saved money has to be wasted protecting the people, then it can’t be properly spent expanding economic output, thus hurting the trickle down effect.
So, while the poor are being treated so very well with this focus on investment savings and corporate tax cuts, the government is doing even more to pay down the deficit, and breaking their national agreements for the better of society. Instead of the $5 billion dollars they were to frivolously throw away into an agreement brokered over two years with all provincial, territory and native leaders to help the poor urban native’s people, they are wisely, (and unilaterally), spending a couple of hundred million on addressing the slight socioeconomic gap.
Which is good, because these savings can be used to further drop corporate and higher bracket tax brackets, so that we have more capital, which will of course, entirely be reinvested in Canada, and thus help the poor.
The only bright light, and by bright, I mean dim, is the drop in GST, which is less than promised. As someone who helps run a small business, I know what it costs to collect GST. I also see the cost on the consumer. I said it before the election, if you want to do something with GST, get rid of it. The eliminated costs on the government side of collecting GST would cause big savings, and you can see the big savings for businesses. We employ a quarter of a person soley dedicated to dealing with collecting GST. While eliminating the GST would cost jobs in collecting and administering, the extra %7 per cent in consumer and business hands would mean I could employ that quarter of a person in doing something that actualsly makes us money, and they would be better suited to do it with lower prices.*
Quick run down on the budget?
Really, if you don’t have money to begin with, you’re getting worse than shit - you’re getting a tax hike. If you’re rich, well, fuck, I hope your sides burst and your guts spill out onto the streets as you laugh all the way to the bank, which you likely own.
Bravo Stephen Harper - you continue to prove you really are a man of the $1000 dollar a plate dinner people… at least we, the little people can take small delight in knowing the minimum wage people who serve your food on your fine china plates are likely adding their own body sauces to your caviar.
-QS
*The fact is, eliminating the GST would not lead to a corresponding %7 drop in prices. While consumers seem to believe they take all the burden of such a tax, business margins also take a hit, and the actual drop in prices would be probably be somewhere closer to the middle, (like %4), depending on the type of product, and the margin currently made. Taxes are rarely passed along to the consumer in their entirety, unless demand is inelastic, meaning a change in price will have little effect on demand, necessary goods, say like heating oil or gasoline, in which case, there is little incentive for businesses to incur any of the costs of a tax, since demand is not likely to be affected, so you bastard ass oil companies, that currently profit on prices that are increasing due to no real economic influence, do not actually lose any money due to gas taxes. (I do not consider the idol speculation of old white guys on Wallstreet as an real economic influence - a real influence being supply, demand, etc… Instability in the middle east has nothing to do with oil prices here since nearly all of our oil comes from the western hemisphere. Oil reserves have actually be increasing since the 1970’s.)
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