Beyond The Commons

Aaron Wherry covers all the goings-on in and around Parliament Hill. Follow Aaron on Twitter: @aaronwherry

Categories: Beyond The Commons, Capital Read

Idea alert

by Aaron Wherry on Monday, October 4, 2010 11:35am - 0 Comments

Jack Layton pitches tax relief.

The federal NDP wants Ottawa to scrap the federal portion of sales taxes on home heating: The 5 percentage points levied by the Goods and Services Tax or the federal portion of the Harmonized Sales Tax applied in many provinces. The NDP estimates it would cost Ottawa $700-million in foregone revenue.

Mr. Layton’s proposal also twists the political knife, though, blaming the rise in home heating costs on the introduction of the HST in Ontario and B.C. The new tax combines the GST and provincial sales tax but also means a sales tax hike for consumers because it is charged on many products which didn’t incur PST before.

Tags: GST, harmonization, hst, Jack Layton, tax, taxation, taxes

More by Aaron Wherry

Emily

I'm really not fond of the 'piece-meal' economy.
Mike T.

This kind of makes me wonder: are there any other political parties in the western world that get portrayed as being this much farther to the "left" than they actually are (maybe Obama in the states, sometimes, I dunno). I swear, if Layton'ws NDP had existed in 1978 the Trudeau Liberals would make them look like the PCs.

s_c_f

They are that far to the left. He's only making this pitch because polls are showing the NDP have dropped from 17% to 14% support, probably because of their dishonorable behaviour on the gun registry vote. Believing the NDP supports lower taxes is like believing in the tooth fairy. If they really wanted lower taxes, they wouldn't single out something like heating oil – which allows them to keep your money if you spend it on anything else. That's why Andrew Coyne calls such gimmicks subsidies and not tax breaks.

Mike T.

class, can anyone help scf out here?
Stewart_Smith

Next thing you know those rascally NDP will be offering tax credits for transit passes, textbooks and kids’ sports.

Jan

Maybe $100 cheques for 'Choice in Heating'

Mark

"…in Ontario, home heating costs have risen 17% in six months" in leven arger part because we're now in October and it's colder outside. Get a grip.

Mark

ahem… "even larger"
RayK

September (no October bills had gone out by the 3rd) is not colder than May.

s_c_f

It's just more nanny state, typical NDP behaviour. You can keep your money if you spend it on heating oil. If you spend it anywhere else, or put it in the bank, we're gonna take it. And if you spend it on electric heating, or geothermal, or natural gas, then we're gonna take it.

Even Chavez tried this stunt.

Crit_Reasoning

Yeah, it's definitely a stupid political stunt. A more reasonable solution would be for McGuinty to provide an energy credit to low income Ontarians, along the lines of the Northern Ontario Energy Credit. But then Jack Layton wouldn't be able to "twist the political knife".
Stewart_Smith

Did Chavez offer to give some of your tax money back if you sent you're fat kids off to soccer camp?

madeyoulook

Huh. I thought the skinny soccer players' parents got credit, too…

Style

These targetted tax subsidies are annoying. I'd prefer the NDP to lower income taxes for the lower tax brackets, reduce payroll taxes and increase taxes on the higher tax brackets, including adding a new bracket or two at the upper end.

Mark

This sounds like something at least one other political party did, while in government, repeatedly, and in recent memory.

Style

Make the tax code more progressive? Or have silly targetted tax subsidies?

Mark

Make the tax code more progressive. See, for example, most of Paul Martin's budgets etc.

Style

These guys disagree: http://www.policyalternatives.ca/sites/default/fi…

BGLong

Sorry. It seems that the country decided some time ago that regressive taxation is the
way to go.
Generally, people who have trouble paying for heat don't make enough to pay the barely
progressive income tax. But they are still stuck with the regressive consumer tax.

Some people say that if people are poor, just give them money. Nice talking point. But good
luck with proposing that these days. It's hard to imagine anything attracting more sneers than
an NDP proposal but that would be an interesting contest.

Style

But they get a rebate.

Emily

The idea that there would be a 'set allowable temperature' for everyone in the country, and anything over that would be taxed, should't even be considered.

Mike T.

I agree it'sfar too complex to work effectively. You seem to have some moral objection.

Are you also opposed to, say, the basic personal exemption for income tax?

Emily

A set temperature is a stupid idea…nothing to do with morals.

We should learn the difference between human beings and robots 'before' robots are a commonplace.

Style

That's an excellent goal for public policy, and one with a pressing social need, but is the tax code really the right way to teach people the difference between robots and people?

Mike T.

I heard it was going to be implemented at the provincial level in Ont., but the instructors started teaching to the Turing Test.
Style

That is quite interesting. Tell me more. Why do you say but the instructors started teaching to the Turing Test?
Emily

Sigh…I see this is going to be one of those days when everybody on here tries to be a comedian.
Style

Really, everybody?
Emily

Well, you two at least.

I was thinking more about 'lights out manufacturing.

Robot factories that operate without lights, and even in a partial vacuum…not suitable for humans
Mike T.

They will not need sweaters and will have no quota alloted to them.
Emily

As I said…everybody's a comedian…and misses the point.
Style

Were you really? I'm not sure I understand you fully.
Emily

If you mean me, yes.
Style

Do you think its likely that I mean you ?
Emily

No one ever knows what you mean….including you.
Style

Are you saying no just to be negative?
Style

http://chayden.net/eliza/Eliza.html
Mike T.

It's definitely a concern, although realistically the demand probably wouldn't be high enough for tax free sweaters to have that great an impact.
Kevin

And what if I set up a knitting circle, to knit sweaters away from the watchful eye of the government and its quotas? Would I be black-marketeering and subject to prison like those notorious long-form-census-refuseniks?
Mike T.

It depends. Are these sweaters for personal use? Then you are fine, as the materials needed to create them are taxable supply and you have already paid.

Are they for sale in a commerical manner? Then you would have to register for an HST number and start charging on your own sales.

This is actually how we do it now, regardless of how we apply HST to home heating.

Stewart_Smith

Emily is correct way up ^ there, that this type of crap idea comes more out of populism than any left-right fiscal orientation.
The Conservatives have been selling us similar initiatives (and bragging about them as among their greatest achievements since coming to office.

Emily

Thank you.

Tossing out 'candies' to everybody to buy votes is no way to run an economy.
BGLong

Is it still crap if a number of provincial jurisdictions do it ?

Answering my own question … could still be crap, yes?

Just because I keep windows open in the middle of winter doesn't
mean everybody has to.

Stewart_Smith

Populism is popular among politicians, and yet politicians are not popular among the populace.

Dan in the Okanagan

BC has a credit equal to the provincial portion of the HST on residential heating costs (electricity, natural gas, heating fuel, heat, steam, propane, kerosene, firewood and pellets). Under Jack's proposal, we wouldn't be paying any HST at all on heating fuel. Would that make the HST an everything-except-carbon tax?
YYZ

I see your point, but 8% is about 1/2 of 17% — it's legitimate to describe the HST as a 'large part' of that.
madeyoulook

Hey, give Layton credit. He's engaging in the complicated and inane micro-tinkering of government activity that everyone should expect of an NDP politician.

What were Harper's excuses? Ah, yes. Retail politics. Maybe barf bags should become sales-tax exempt…
Bob

I guess this means the NDP doesn't care about the environment anymore…
Mike T.

It's certainly a bit counterproductive in that respect. The best thing would be a system which figures the exact amount necessary to heat a home to a cool but livable temp. (sweater weather, as it were), have no HST on that amount and a penalty afterward. But that would be too difficult to work.
Emily

Not to mention I refuse to wear a sweater indoors.
YYZ

Actually, the best thing is to raise prices on home heating. Then, in order to be sure low-income families can afford to heat their homes, you'd charge them a much lower rate of income tax (if any) and/or rebate their HST.

Good news! We've arrived.
Emily

Again the Libertarian nonsense of wanting something for nothing.
Mike T.

But it is hardly, as oft gets bandied about when discussing the NDP, socialism.
Mike T.

As you are welcome to do. However, if this results in raising your thermostat above what the calculated amount would otherwise be, you would have to pay HST accordingly.
Richard_S_Argent

It's like the CBC – anybody who actually watches/listens/reads the thing knows damn well it's about as middle of the road centrist as you can get – doesn't stop the far right from trying to portray it as to the left of Pravda.

Layton's NDP is about as socialist as Blair's Labour :)
Emily

Layton announced some years ago….to the dismay of his party….that he is a socialist.
Emily

Or the price of heating could just rise and fall with the market, and leave the govt watchdogs out of my house.
Mike T.

These are interesting questions which would require more study. I doubt a sweater ration could be sold, but it would make sense to make it transferable to later seasons if not used in any given winter.
Mike T.

to the dismay of his party

****
So that would make me….correct?
Style

I want tax free sweaters up to a quota set by the government. That's the opposite of libertarianism.
Mike T.

Your idea is simpler, mine is more effective but practically unworkable.
Holly Stick

The poorer ones would not benefit from a lower taxes since they likely are too poor to pay taxes in the first place; and an HST rebate after the fact would not suffice.
Emily

No, it's one thing to be socialist, it's another to admit it. The party was dismayed he publically announced it.
YYZ

The poorer ones would not benefit from a lower taxes since they likely are too poor to pay taxes in the first place - correct – we've already accounted for their lower income by not forcing them to pay taxes. One can argue if the cutoff is in the right spot.

HST rebate after the fact would not suffice. Yes it would. Wow, that was an intelligent debate.

If you don't think the rebate after the fact would suffice (I don't know why it wouldn't), then with a little bureaucratic reshuffling take it right off the top.

Under the Layton proposal, I, as a high-income earner, would save more money than a low-income earner would. Feels like I'm arguing with a Conservative right now!
Holly Stick

Poor people live day to day. They can't pay for heat now, and a rebate ten months down the road is not going to help them now.