Harper: GST from 7% to 5%

A Conservative government under the leadership of Stephen Harper will reduce the GST from 7% to 6% immediately and then to 5% within five years.

This announcement generates a mixed reaction from me, but it’s mostly good.

First of all, small ‘c’ conservatives argue that we should be moving away from income taxes and towards consumption tax as taxing savings and wealth generation discourages investment. However, lowering consumption taxes encourages consumerism which will certainly stimulate the economy from everyday items such as newspapers to big-ticket items such as cars and homes.

While the latest announcement isn’t necessarily reflective of Mr. Harper’s masters degree in economics, he should be awarded a doctorate in politics. Today’s announcement will certainly get voters excited and has the added benefit of dragging the Liberals through the inevitable ‘but some critics say’ angle from the MSM. You see, some critics say that voters don’t trust politicians on GST promises, but then again, we’re talking about Liberals specifically. Remember the broken promise about eliminating the GST in the Red Book? Sheila Copps resigned over that Liberal broken promise.

“I’ve already said personally and very directly that if the GST is not abolished, I’ll resign. I don’t know how clear you can get. I think you’ve got to be accountable…and you have to deliver on it” — Sheila Copps, Globe and Mail, March 11, 1996

So, Stephen Harper gets to make a wildly popular announcement while skeptics can only cite a flaw by pointing out one of the biggest Liberal flip-flops in Canadian history.

Policy wise, is this a good move overall in the eyes of small ‘c’ conservatives? Well, the net reduction of taxes is a conservative ideal, so the reduction of the GST is a victory for small ‘c’ conservatives and the taxpayer. Will we move to a consumption based tax system in the future, eliminating income tax entirely? Perhaps that’s well off into the future, but for the present a 2% reduction in the GST will win the Conservative Party a lot of support.

Canadian Taxpayer’s Federation National Director John Williamson agrees,

“The idea of reducing the GST is just as valid as any other tax-reduction proposal we have seen to date. I think it is one that will prove to be popular with a lot of voters.” — John Williamson

Paul Martin had this to say about the GST in 1989:

“Mr. Speaker, the goods and services tax is a stupid, inept and incompetent tax.” — Paul Martin, November 28th 1989

And today, Mr. Martin had this to say:

“I don’t believe that is the path to follow … Canadians have been down this road before. They’ve heard this story.” — Paul Martin

Didn’t Paul Martin author the Liberal’s broken GST promise in the Red Book?