NetNews Usenet Archive 1993 #3/NN_1993_3.iso/spool/can/general/6409

Internet Message Format | 1993-01-27 | 2.0 KB

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From: [e-mail] (Steve Leffler )
Newsgroups: can.general,can.politics,soc.culture.canada
Subject: Re: Liberal Party Tax Policy
Date: 27 Jan 1993 22:47:23 GMT
Organization: The University of British Columbia
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Distribution: world
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[e-mail] (PELTON MATTHEW ALAN) writes:

>  I see your point, but it doesn't credit your argument to accuse me
>of lying with stats (I don't see any statistics in my argument).  As you
>admit, it is possible for a sales tax to be regresive.  I know what a
>regressive tax is.  And I contend that, in general, a sales tax will consume
>a greater percentage of a poorer person's income.  In general, people
>with lower incomes spend a greater percentage of it in the marketplace, while
>people with higher incomes tend to invest and save more.  This means that
>the poorer person is spending a greater portion of his/her income on
>taxable goods and services.  And this, in turn, means that a greater percentage
>of the poorer person's income will be spent on taxes on these goods and
>services.  Obviously, the person with a greater income spends more in absolute
>terms on a GST.  But the person with a lower income spends more in relative
>terms -- a greater percentage.

   Of course, a poor person spends the vast majority of their income on
groceries and rent, both of which are GST-exempt.  Also, of course, you need
to take into account the fact that low-income individuals receive a quarterly
GST rebate from the government (paid in ADVANCE).  I suspect that when these
factors are taken into account, the GST will work out to be progressive, except
for the very rich.

                     ---Steven Leffler
                    [e-mail]