dowlingm
Senior Member
VAT in Germany is 19% (7% on certain things). The tricky part with doing that in Ontario (or even returning to 15%) would be stemming the flow of GTA consumers to Buffalo.
I don't think anyone is suggesting a return to 15%, 14% would do the job.
VAT in Germany is 19% (7% on certain things). The tricky part with doing that in Ontario (or even returning to 15%) would be stemming the flow of GTA consumers to Buffalo.
But I did not see City Council’s transit debate ending up they way it ended up last week, which was in thoroughgoing disgrace. I did not expect to see Karen Stintz vote to revive the Scarborough subway debate mere months after voting to approve the Master Agreement that prescribes a Scarborough LRT — 22 councillors changed their minds in just five months! What the hell is that all about?
The more I think about it, just doing a 2% Sales Tax increase may be the best option. That way we're only really doing 1 revenue tool, so there's not as much of a negative reaction. Most people don't even know that 1% was the 'default' option. A lot of the time it's just simply mentioned as "Sales Tax".
Do 1.5% for capital and 0.5% for operating, which not-so-coincidentally covers the 25% operating mandate that has been talked about. Some municipalities can even throw in a small property tax break if their portion of that 0.5% offsets their transit expenses enough. Municipalities would be much more likely to support it if a) they got money freed up in their budgets, or b) they were able to trumpet a tax break or freeze.
Anyone know what the impact to the general economy of a 2% sales tax increase is? What impact on spending? Revenue? Jobs?
Well what impact did it have in 2006 before it was reduced to 13%? Were there any measurable benefits from dropping it from 15% to 13%? If there weren't any measurable positive benefits from the reduction, theoretically the inverse would also hold true.
Anyone know what the impact to the general economy of a 2% sales tax increase is? What impact on spending? Revenue? Jobs?
The 2% reduction was virtually unnoticed country wide.
A 2% regional increase will not impact most of Ontario at all and will have a minimal impact to Toronto.
We might see people going to London or Kitchener for high value items (cars) but for $200 in savings (assuming travel is free) on a $10,000 vehicle, it won't be worth the day trip for most people.
That was achieved by cutting the GST portion of the pre-harmotization tax. If I recall correctly, nationally it resulted in about $6B less government revenue for each of the two 1% cuts. It was a time when governments were dealing with surpluses not deficits and it was expected that a decent chunk of the lost revenue would be offset by an increase in economic activity (ie. putting $12B annually back in the hands of consumers would lead them to spend more).
So, conversely, when people aren't saving and debt levels are increasing, it would seem that taking an additional 2% out of the hands of consumers would/could/should lead to a reduction in economic activity and some of the expected gains to the public purse would be offset by reduction of spending/revenue in other areas......no?
The 2% reduction was virtually unnoticed country wide.
A 2% regional increase will not impact most of Ontario at all and will have a minimal impact to Toronto.
We might see people going to London or Kitchener for high value items (cars) but for $200 in savings (assuming travel is free) on a $10,000 vehicle, it won't be worth the day trip for most people.
Good points, but I really don't think a Sales Tax is a big percentage of household debt. The vast majority of the debt for most people is house and car, with the occasional credit card thrown in. Nearly all of that debt would still be there regardless of what the sales tax level is.
????
I am not saying the sales tax makes up household debt. I am saying that people (on average) are saving less and debt is growing. Together those indicate that people do not have (again, on average) an abundance of excess cash available to them. So, considering that the existing debt they have has to be serviced (whether that is mortgage debt, car loan debt or credit card debt) that portion of the average monthly expenditure is "fixed"....so if you then raise the cost of everything else by 2%....are you saying that it will have no impact on people's go-forward spending habits/patterns (again, not one specific person but "on average').