I am beginning to wonder if the leak of the Conservative GST plan may be from the Karl Rove playbook. Here is how Finance Minister Goodale has reacted to the suggestion.
...Canadians may be overtaxed, but cutting the goods and services tax is not the answer, Finance Minister Ralph Goodale said Friday.
...In a round-table discussion with The Canadian Press, Goodale said that would be one of the least effective and most costly tools for improving economic productivity and Canadian living standards.
"In the case of the GST - while I fully understand how Canadians find it an annoyance and an aggravation - I think the place where we can have the larger impact on
a cost-effective basis . . . is with reductions in income taxes," said the finance minister.
..."I think the level of taxation has in some respects been a dampener on our productivity performance," said the finance minister. "That's why I've moved to begin the process of bringing down that tax burden."
...Goodale said economists agree: "The taxes that have the least impact on productivity are consumption taxes. And income taxes are in the upper end of the range in terms of impact.
"So that's where we've placed our focus."
So here is where the Liberals are:
- Canadian taxes are too high - both personal and corporate
- High taxation is lowering Canadian productivity
- Low productivity lowers Canadian's standard of living
- Personal income tax cuts are more effective than cuts in consumption taxes
- Liberal personal income tax cuts are back-end-loaded and insignificant in areas where productivity gains would come from (middle and upper-class)
So the Liberals have clearly outlined a problem with the Canadian economy but have not properly addressed it with their "mini-budget". Now the situation and the budgetary numbers are part of the public record. The Conservatives can use the Liberals own arguments to present higher and more broad-based tax cuts to fix the productivity problem the Liberals created in their 12 years in office.
At a minumun the Conservatives are now denying they have a plan to cut the GST.
..."We haven't discussed that," said Conservative House leader Jay Hill after question period. "Not in my presence."
...William Stairs, a spokesman for Conservative leader Stephen Harper, called the Post story "false.""There's no plan to cut the GST by two per cent," he said
