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Harper vows to cut GST

Conservative Leader Stephen Harper in Mississauga, Ont., Thursday morning.
Conservative Leader Stephen Harper has promised to cut the GST if his party wins the federal election.

At a campaign stop in the Toronto area, Harper announced his intention to reduce the goods and services tax by one percentage point immediately, then by another point within five years.

That would mean reducing the tax to six per cent in 2006, and then to five per cent.

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Your letters:

This proposal does benefit the wealthy more than the average Canadian and I'll tell you why. The family of 4 in Harper's example makes more than the average but that is not my point.

Any family of 4 making $60,000 or less per year spends a large percentage of take home pay on necessities such as food, rent/mortgage - things that are not charged GST. The rest is spent on clothing, school supplies and transportation - necessities that are charged GST.

This family in our example is eligable for a GST reimbursement from the government at tax time. The reimbursement is based on income and not how much was actually spent on GST by the family. So if the GST is reduced the reimbursement will also reduce. Now our family of 4 is set back even more...thanks Steve!

—Ryan McKenzie | Toronto

Thank you Mr. Harper for even thinking about reducing the GST which is a consumption tax. Please remember to keep your promise after you win.

In addition, you should take a page out of the Liberal platform to reduce income taxes as this also would help out Canadians in general. Everything should be done in moderation and gradually.

Liberals and show them who really count in elections - the great unwashed. —Archie Nishimura

Suggesting that the current Conservative Party created the GST denies history. The current Conservatives are Reformers who opposed the GST from the start.

The GST is a hated tax and as a computer consultant I can unequivocally state that most software is easily modified for any GST reduction. The GST has hurt business and any reduction is good news. Bravo Mr. Harper, and this comes from an NDP supporter.

—Guy Desrosiers | Brunkild, Manitoba

I find it extremely disingenuous that Liberals are disparaging the Conservative's lowering of the GST rate. Aren't the Liberals the ones who promised to end the GST two campaigns ago?

How could that have been good policy whereas lowering GST by 1% is bad policy. It looks like Liberal spin as usual.

—Jim Wallace | Toronto

Taxes, all taxes are money paid from us to the Government. Surely this is an illogical debate, as to what tax to cut! Any cut in any tax should be embraced.

Only on a CBC wweb site would the readers attack a reduction in taxes, as ill conceived. Let the debate continue with the illogical NIMBY's and economists, who decide it does little to improve their own backyard. A tax cut is a tax cut is a tax cut, stop trying to over analyse it!

—Charlie Flynn | Vancouver

I think cutting the GST rate from 7% to 6% and then to 5% will actually benefit the poor people the most, if you do not remove their GST rebates at the same time. All other personal taxes are "income related". Thus the poor cannot significantly benefit from a cut in income tax, especially if they have no job.

I also think the Liberals are "in a bit of a panic" as shown by their belated efforts to bribe the voters with senseless and vwastefulpromises just prior to the election call. They may need a few years on opposition benches to come to their senses.

—Jan Knytl | Calgary

It has been said that the �The art of taxation consists of plucking the most feathers out of the goose with the least amount of hissing�. Jean and Paul (that�s not Lennon and McCartney) were elected on the promise to scrap the GST.

The GST now accounts for 17% of the revenue for the federal government. It is a lucrative tax and no serious politician will be able to replace it without considerable hissing from some corner of the country. Stephen Harper�s promise to reduce the tax to 5% over 2 years is as close as we will ever get to getting rid of it.

—Robert Seaton | Terrace, B.C.

I was just wondering why nobody is asking the Conservatives about the cost to business who has to implement the GST change. In terms of cost I am speaking of hardware and software changes to computer systems which charge the GST as well as all the small businesses with pre programmed cash registers.

All of these businesses will have to pay for someone to implement these changes to their systems for the first one percent reduction and then Mr Harper says the last one percent will be reduced over the five year mandate.

If it is not reduced all at once that will mean more than two changes to all these systems and the subsequent costs. I hope somebody at the CBC will ask if the Conservatives have figured out what all of this will cost in money and time, specifically in terms of hardware and software changes.

—Tariq | Kingston, Ontario

Who is he kidding, once in office any government would simply find another way to make up for the "lost revenue" as a result of the lowering of the GST.

I guess until election day, Canadians had better get ready for all of the leaders to start making promises that they will not or cannot keep.

With any luck all of Canada will have one of the harshest winters on record and all of these politicians will be snowbound in their own homes. Lower the GST..ba humbug.

—Fred Bembridge | Montreal

Some of the letters regarding Harper's GST proposal allude to the idea that business will benefit by the reduction the most. Thats not necessarily true. Businesses are just GST collectors and not payors, they get refunds for the GST they pay through input tax credits.

GST is really paid by the end user of a good or service. I guess businesses benefit in that their customers have more money to spend on their goods or services.

—Peter Giuliano | Montreal

Some are arguing that the rich will benefit most by Harper's 2% reduction of the GST. Sure they will save more money in terms of dollars because they spend more.

Every Canadian - poor, rich, whatever their income - will save the same 2% percent on goods and services. The rich will not benefit anymore than any of the rest of us.

I welcome Harper's plan. It is feasible, unlike the Liberal promise to scrap the GST altogether in past elections.

—David MacDonald

How very generous of Mr. Harper to reduce the GST from 7% to 6% since it was his party that introduced the GST in the first place.

Now most Canadians are used to paying the GST and I think that an income tax reduction is the way to go which would benefit many more Canadians. We Pensioners don't have much money to spend on large items anyhow and the rich can afford paying.

Thanks but no thanks Mr. Harper

—Karin Pasnak | North Vancouver

I find it interesting that Harper is pointing to the fact that the revenue from GST has doubled with the Liberals in office. Does that not represent more spending which is a sign of more disposable income which is a sign of a healthy economy?

What is Harper suggesting? That the GST is such a problem that Canadians continue to spend more and more money on goods and services? It seems to me that arguing for a reduction in GST to stimulate spending is a faulty idea.

When the economy is strong we need to ensure the survival of our social programs. When it is weak we need to increase the amount of money people have to spend to stimulate growth. Right now we are doing well so we should look after the programs that we believe are important to us as Canadians.

—Garth Shindle | Carman, Manitoba

As a tax advisor and ordinary Canadian, how can you argue with this tax cut, when the government is flush with cash, and is for the most part squandering it. More power and money to the people.

—Jeremy Karkheck | Richmond Hill, Ontario

People in all income tax brackets will benefit from the GST cut. Lower and middle income Canadians are already in a lower or middle tax bracket and pay less taxes. With less GST, the poor will still benefit by paying less tax on all the necessities of life, from food, to heat, to electricity, to phone services, etc.

My only question is, "Is this a real promise?" We already know, based on the Liberal track record, that we cannot trust the Liberals to actually do what they promise and lower income taxes. Would the Conservatives pull the same stunt?

—A. Abbott | Chatham, Ontario

I don't know if I'd like Mr. Harper to run my finances? He claims that his recent plan to cut the GST by 1% will save $400 for the average Canadian family of 4 earning $60000.

With a cut of 1%, I would have to spend $40000 to save $400. I don't know about Mr. Harper, but if I make $60000, I then have to pay my income taxes plus other paycheck deductions, pay my mortgage and purchase my groceries.

Obviously Mr. Harper is not making $60000 if he believes there would be $40000 left over.

—G. Sheeler | Sarnia, Ontario

Excellent, it' my money directly in my pocket and out of the hands of politicians. How can that be bad? Its across the board as every pays it even on gas, it is by far the most equitable way to return money to our pockets, that is to stop taking it! Its a great start, keep it coming!

—Don Wallace | Calgary

Harper once again shows how out of touch he is with Canadian reality, and how two-faced he is. He accuses the liberals of vote-buying with their recent spending, and then tries his version of exactly the same thing.

—Hanne Armstrong | Alberta

So in Quebec with a 1%cut I would now pay $1.14 instead of $1.15 for a pack of gum. When I fill my gas tank I will get 1/3 of a litre more gas. Whatever will I do with all the savings!

—David Chapman

I don't give a darn about the tax cuts. Either way they're going to amount to peanuts if they even happen (wasn't there just a poll stating that 73% of Canadians don't expect campaign promises to be kept?).

My big concern is simple. I want a family doctor. I want to be able to get more than 30 seconds of a doctor's time without waiting 5 hours for those 30 seconds(no exaggeration in New Brunswick!).

—R. Hardin | Fredericton

How can anyone complain about a tax cut, even if it's starts with just one percent IMMEDIATELY. For 12 years we have heard the fib-erals spewing off about this and that and whats happened nothing.

—Nigel Berke

Minister Goodale has shown quite clearly his ignorance to the simple burden of tax concepts in his statement "Cutting the GST favors the rich".

Consumption taxes (like the GST) always hurt the poor more than the rich. To see this, simply ask who is more adversely affected when paying GST on a candy bar worth $1, a wealthy or a poor individual? Clearly, the poorer individual is worse off since the $0.07 in tax is a much larger share of their disposable income in comparison to a wealthy individual.

Thus, a consumption tax effectively puts a larger burden on the poor than on the wealthy.

—Daniel Monchuk | Hattiesburg, MS

I think reducing the GST is a great idea. Maybe someday it could be eliminated completely. It will benefit everyone and give a boost to the retail sector as well. Why would anyone oppose the idea?

—Bruce Crowe | Cambridge, Ontario

This GST committment is a masterstroke. Do we really believe that the Federal Fibberals, known for legalese litanies, are actually going to stop taxing us at the present rates?

Here Stephen Harper is offering Canadians a solution to two problems at once: politicians accountability and lower taxes. By lowering the GST there is no tax credit / tax benefit BS to take that money back. No way Ottawa can alter the promise by "adjusting" the tax back out of your pockets.

And for people below the tax cut-off the GST is better for them. Also, by making such an obvious tax reduction he is holding a gun to his own head to reduce taxes and show that politicians can be trusted.

—Dave Erickson

It's a good start though I must say that Mr. Robertson (below)has a point regarding income tax. But a one percent reduction in the GST increasing to a 2% reduction in 07 will put more money in the pockets of Canadians.

Another initiative that will allow the government then to drop the rate by 3% in the third year would be to eliminate the GST rebate which must today account for billions in payout's (four rebate cheques a year are sent) Ottawa under the Liberals has been buying votes with these taxpayer funded handouts and most of them go to people who do not deserve it.

—Carl Burns | Halifax

Cutting the GST would benefit all Canadians, rich or poor. I don't why Ralph Goodale says it would only benefit the rich because 7% is 7%.

Is he saying that poor people do not buy clothes, toothpaste or toilet paper? Because we pay GST on all these items. Furthermore, it would make sense to see the GST go first since it was originally introduced as a temporary tax to help cope with hard times back in the 70's(?).

I suppose since the government can invest millions of our dollars in sponsorship scandals, those hard times are gone.

—Dominic Turenne | Cornwall,Ontario

It is a great idea to cut back on the GST. The liberals have had 12 years to do so and did nothing.

Again, if the 'large corporations' have less tax to pay means they have more money to hire more workers, simple as that. Which in turn more workers have more money to spend in our economy.

So all the people who don't like the idea, like paying taxes. What is wrong with reducing our taxes. I am a working person like most others, however there are the people who live off of the system. I pay my taxes, and to tell you the truth, I certainly would not mine a break, it's more money in my pocket. I am sick of paying such high taxes only to support Liberal lies and waste.

—Ben Patterson | Brantford, Ontario

The Liberals plan "may" be better than the Conservative plan but considering that the Liberals have had 12 years to get rid of the GST (like they said they would, by chance), I think it's better to get something from the Conservatives than nothing from the Liberals.

—Matt Friesen | Winnipeg

Isn't this fun to watch the Liberals arguing about which is the best way to cut taxes. After all these years of Liberal excess and waste, they have suddenly become tax cut champions.

Liberals don't cut taxes people, they just don't do it. When Stephen Harper offers this, take it. It is real and it is for everyone.

Nothing could be better. It gives me hope that "taxpayers" will get a say in taxes and that it just isn't the "non taxpayers" that will continue to tell me how and how much I have to pay them.

—Jack Fernihough | Burlington, Ontario

I think that Harper's plan to cut the GST is a great idea. After all the current government seems to have more than enough money to waste.

Plus, this is a tax cut that will be enjoyed by all Canadian's, and we will see the reduction every time we purchase goods and services.

province: Ontario Jason Walter | Mildmay, Ontario

A GST tax cut, like Mr. Harpers fuel tax cut will not put money in consumers pockets. It will allow for price increases as the marketplace adjusts to the extra room in pricing. The stimulus will come from higher corporate profits and not increased consumer spending that an income tax cut would create.

—Ronald Ellis | Winnipeg

Harper's announcement of a cut in the GST is just what Canadians need. It is even; it is fair. Even the poor benefit.

Paul Martin says that the lowest income Canadians are the ones that need a break; however, lowest income Canadians are not paying tax! They don't have the income. Therefore, they get nothing out of Martin's plan.

The Progressive Conservatives introduced the GST at a time when revenue was necessary to pay down the huge deficit bequeathed to their government. Times change. The Liberals got into power in 1993 by proposing to rid us of the GST. Did they do it? No. They never seem to do anything they say they'll do.

—Laura Metcalfe | Ottawa

Just heard Stephen Harper wax on about lowering the GST in stages by 2 per cent - as a way to help lower income Canadians. No one seems to have asked him how much large corporations, by far the largest purchasers of goods and services and in large part, friends of the Conservatives, would benefit.

—Ron Dennis | Burlington, Ontario

I wish Mr. Harper would explain what he means when he says he believes that all taxes are bad. Does he mean there is no role for government in the lives of citizens? That's the American way.

—Ken Hay | Quebec City

To offer tax cut by any party and prior to an election is a great insult to the intelligence of the voters. To offer to buy votes for $ 400 per family per year in the form of 1% reduction in GST (as offered by PC leader) is ignoring the fact that the same party established this tax to begin with.

—Majid Abaeian | Ottawa

As an economist Stephen Harper should know it's the poor and middle class that drive the economy of Canada, not the rich who will benefit most from a reduction in the GST, and usually find other loopholes not to pay their fair share of income taxes. Considering it was the Conservatives who brought in the GST, the tail is now wagging the dog.

With the money he claims he will save Canadians as a result of his proposals to cut government waste, he should be able to lower income taxes for the middle class and poor, while maintaining the current level of services and, paying down the national debt, which now sits at $648 billion.

We have a very healthy economy as it is, and if Mr. Harper is going to manage Canada's finances a la "George Bush" all you have to do is look at what it has done to the Americans.

—Peter Lefaivre | Edmonton

I'm very confused by Mr. Harper's decision to scrap the GST. Considering that we are facing a consumption problem in Canada is it wise to encourage more consumption, particularly of luxury items?

Moreover, one of the bigger problems facing the Canadian economy is lack of productivity, which one could say comes from lack of incentive - i.e., a middle class that is too heavily burdened by income tax.

Would it not have been much wiser to lower middle class taxes on income (while also substantially reducing taxes for the poor)?

—Jason Mutch | Ottawa

So Stephen Harper and the Conservatives are promising to cut the GST. Given the income tax cuts announced by the Liberals last week, this move by the Conservatives is truly a Hail Mary pass and one that will certainly be initially popular.

However, it's absolutely the wrong approach. Like all Canadians, I'd prefer not to pay any taxes. However, cutting income taxes is preferable to cutting sales taxes.

Cutting income taxes provides me with more after-tax income to help pay down my debts and to save for my retirement. With sales taxes like the GST, I don't pay tax until I spend my hard earned money.

So if it's a choice between cutting income taxes and cutting sales taxes, please cut my income taxes first! Tax me when I spend my income, don't tax me when I earn it.

—David Douglas Robertson | Toronto


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ELECTION RESULTSDetails>
1241035129
Total Elected and Leading
CON124036.27%
LIB103030.23%
BQ51010.48%
NDP29017.48%
IND10.52%
OTH005.02%

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