Thursday, December 01, 2005

The 5% Solution

Stephen Harper's pledge to reduce the GST to 5% from 7% over the next five years marks a significant change in campaign strategy and tactics since the 2004 debacle.

By announcing it early and on its own, instead of as part of a general platform rollout, it will stand out as a promise everyone will remember and everyone will relate to.

People grumble about their income taxes, to be sure, but few read their whole pay stub each week, and people are only really reminded about them once a year at tax time. The GST stands there as an annoyance every time we go to the cash register.

Moreover, the announcement puts the Liberals on the back foot, not only by having to react to a Conservative policy announcement, but also by reminding everyone that the Liberals first came to power in part because of a promise to scrap the GST.

No one seriously expects the GST to be abolished, and it would be foolish to promise it, no matter the fiscal climate. But a two percentage point reduction, besides sounding more credible, actually is more credible.

Everybody wins with a GST cut. And the Tories will too.

Source: Globe and Mail

4 comments:

Anonymous said...

There's no comments for this. I can't believe it. Okay, yes this is
is great for us. And I hope we get a Conservative Gov't. Allan.

v said...

I'm surprised at this; it sure is different than in 2004 and it looks like a winner to me.

Lord Kitchener's Own said...

Just so I'm clear though. THIS isn't a bribe. Right?

Just checking.

Darren said...

Knowing nothing about economics, I've been collecting all the expert opinions I could find:

http://www.darrenbarefoot.com/archives/2005/12/does-cutting-the-gst-make-sense.html

Thus far, it seems to be the prevailing view that other tax cuts would be more helpful to more Canadians than a GST reduction.