Discussion about this post

User's avatar
Digital Canary 💪💪🇨🇦🇺🇦🗽's avatar

A pledge to Trump is only worth as much as a Trump pledge.

It’s just a stalling tactic to allow focus to be maintained on trade talks.

Will it actually be rescinded?

I’d guess only if the trade talks result in enormously larger wins for Canada.

Even CRA has just said that they won’t process refunds on previously paid DST until after legislation recinds the tax (no sooner than mid September).

Don’t get sucked into US media-driven drama.

💪💪🇨🇦

Expand full comment
Mark Tilley's avatar

Minutia first: you strike a medal, not a monument; and High Noon was a Gary Cooper movie, not John Wayne.

Signed,

Your friendly neighbourhood pedant.

But seriously, getting rid of the DST was a good idea for all the reasons you note, plus one more:

Income beats consumption as a tax base for individuals, because income is a better gauge for how much individuals benefit from government (i.e. why we pay tax in the first place). Sure, consumption may be more economically efficient but that's not the point - efficiency isn't the critical criteria.

The benefit corporations receive though, isn't best measured by their income, and certainly not their revenue (like the DST), but by how much they invest, in both capital and labour, in CANADA. Taxing both labour and capital instead of income puts the onus on management to ensure that they are both invested productively. Yes, that will no doubt reduce prices for each, but prices will only retreat until the ROI reaches a point that makes it worthwhile to invest. The result will be that efficient corporations (and industries) will attract more investment, which is what you want for a productive economy.

As far as reducing wages, that can be mitigated by a partial basic income, which would also negate the need for minimum wages. The best part is that all this can be done without actually increasing the tax take overall (both corporate and individual). A major overhaul of the individual tax/welfare system, augmented by the basic income replacing provincial transfers would be sufficient. If the provincial transfer idea seems out of left field, consider that the basic income provides a federal transfer where it's needed most on a far more granular (i.e. accurate) level than provincial government transfers. And best of all, integrating it with the individual tax system (treating it as a negative tax) provides a mechanism for people earning their way out of needing it, without further intervention by government.

You can argue the point of an excise tax for products where the tax can be directed to paying for the cost some government product (fuel and highways, tobacco/alcohol and health) or just because it's in a general social interest to reduce usage (oil), but the DST has no such rationale.

It was just plain bad tax policy.

Expand full comment
11 more comments...

No posts