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Ottawa - Wednesday, September 18, 2002 - by: Walter
Robinson, Federal Director, Canadian
Taxpayers Federation |
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hated
tax
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- The goods and services tax (GST), pollsters tell us, is the
most hated tax in recent Canadian history. Yet the pollsters also tell us that Canadians
would be willing to pay more taxes for health care and Kyoto commitments. Herein
lies the reason why Canadians should not dismiss the rumours of a hike in the GST
(going from its present 7% to 10%) in the near future.
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1%
$3.87 billion
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According to the December 2001 budget documents, the GST presently
nets Ottawa some $27.1 billion. So do the math, divide by seven, carry the one and
count on your big toe and voila, with each percentage point of the GST, Ottawa rakes
in $3.87 billion. |
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health
care
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Following along, a 3% hike would mean an extra $11.61 billion
in additional revenues for Ottawa. This would definitely be enough for Ottawa to
respond to demands for federal cash infusions for health care — expected from both
the Kirby Senate Committee (late October) and the Romanow Commission (mid to late
November). |
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social
engineering
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Billions of tax dollars would also be left over to fund Kyoto
transition commitments, the cities agenda, aboriginal initiatives and a host of other
‘social engineering’ schemes expected in the Throne Speech on September 30. |
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There are five major reasons why Canadians should be concerned. |
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- This could be more than a trial balloon. It is a certainty that both the Kirby
and Romanow health care commissions will demand that Ottawa play a larger funding
role in health care. And we’ve already seen that the federal government is not prepared
to re-allocate within existing budget envelopes (ex: cut corporate welfare and regional
development by $4 billion) to meet such demands. Combine this with the TD Bank’s
recent forecasts showing Ottawa will run little to no surplus and it’s clear that
tax hikes are definitely being considered to meet a variety of health care, Kyoto
and as yet unknown Throne Speech promises.
- 10% is the first political option for the feds. Moving to an 8% GST doesn’t
yield enough revenue. Nine percent is a non-starter given the Liberals opposition
to this amount back in 1989 and 1990. And Ottawa knows they will take some heat
over increasing the GST regardless of the amount, so why limit it to just one percentage
point? The political price tag would be the same for 10% as it would be for 8%.
- Successfully hiking the GST sets a dangerous precedent. If the government can
successfully hike the GST under the pretense of funding healthcare, then look out.
How about another 1% for the cities agenda, .8% for aboriginal funding priorities,
2% for the innovation agenda … and on and on it goes.
Not only would the price of goods and services be higher due to the tax hike,
but businesses would also pass along the costs of compliance (changing billing systems,
registers, etc.) to consumers in the form of higher prices or diminished service
offerings.
- It could create space for provincial sales tax hikes. A 10% GST then allows
provinces with single digit sales taxes to raise their own sales tax rates close
to 10%. And we’ve already seen health care premiums skyrocket in Alberta and BC
under the cover of protecting health care.
- There is no guarantee any GST proceeds will go to health care. Time and time
again, Ottawa has refused to dedicate gas taxes back to road and highway construction
citing an aversion to dedicated taxation. It’s improbable that the federal government
would change its tune when it comes the GST and health care funding. Welcome to
the world of green peas and alfalfa sprouts taxation — think the flying tax or the
EI ripoff …. you may not like it, but mom (read: the government) says its good for
you.
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Walter Robinson
Federal Director |
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References: |
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PM quickly quashes rumours of GST hike,
September 17, 2002, Toronto Star |
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Retrun to Ensign
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News
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This page is a story posted on Ensign and/or Saskatchewan
News, both of which are daily web sites offering a variety of material from scenic
images, political commentary, information and news. These publications are the work
of Faster Than Light Communications . If you would like to comment on this story or you wish to contact
the editor of these sites please send us email. |
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Editor : Timothy W. Shire
Faster Than Light Communication
Box 1776, Tisdale, Saskatchewan, Canada, S0E 1T0
306 873 2004
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