Local GST hike proposed to help pay for infrastructure

[Doug]

Originally Posted by freeweed

Go ask Americans how well their municipally-levied taxes have worked. You might want to look up "unintended consequences" just in case you're not familiar with the term.

I don't think it's the worst idea in the world, but why not just increase property taxes accordingly?

I live it every day. Municipalities down here bend over backwards to attract retail (ex. property tax subsidies, infrastructure subsidies, expropriating private land to resell to retail developers at a loss) to get in on the sales tax gravy. The corollary is that they often go to extraordinary measures to not zone for new residential as it does not yield sales taxes. This is a very bad idea.

[Doug]

Originally Posted by bigcanuck

On a related note, Jack Mintz (Director of the School of Public Policy at the University of Calgary) yesterday indicated that a Provincial sales tax would actually be beneficial to Alberta.


Link - via 660 News

I don't think he is advocating a sales tax to fund incremental spending.

[Doug]

User fees are the lowest risk method of generating additional revenue:
-higher public transit fees, especially if they could be targeted at downtown commuters
-increased parking rates
-vehicle registration surcharge
-road tolls, especially if they could be variable (charge more during periods of congestion)
-surcharges for non-Calgary residents who use City of Calgary services

[Calgarian]

I'm surprised no one is talking about Nenshi's proposed method of letting the city keep more of the tax money it collects, from what I understand this is superior to increasing property tax or GST as it just re-distributes the tax money already collected in a more equitable way. That being said, dipping into the revenue the Province collects would likely mean more taxes to supplement the amount they miss out on.

Or am I out to lunch on that proposal?

[freeweed]

Originally Posted by LFRENCH

my point is that despite not having a PST, crap is just marked up higher by the retailers thus feeling like we do have one. I'd rather pay our provincial government through PST than pad the bottom line of some of these corporations.

Sure - but the fact is you'd be doing both in Alberta, PST or no PST. Prices aren't very elastic here due to the ridiculous amount of retail spending that goes on. Introduce a PST and you'd be padding the bottom line of both government and corporations.

You did manage to contradict the typical babel that I hear from many about how BC costs more because of taxes. First night I was in Alberta, some moron asked me what its like to live in a "socialist state" Apparently he believes that PST is a socialist ploy..

Every place in Canada is highly socialist already. Hell, that applies to most if not all of the western world.

Alberta is definitely more expensive on a lot of things - but incomes more than compensate so it feels "cheaper". It depends on exactly how you're looking at it. Working here but shopping elsewhere is pure heaven, you get the best of both worlds.

[freeweed]

Originally Posted by Doug

I live it every day. Municipalities down here bend over backwards to attract retail (ex. property tax subsidies, infrastructure subsidies, expropriating private land to resell to retail developers at a loss) to get in on the sales tax gravy. The corollary is that they often go to extraordinary measures to not zone for new residential as it does not yield sales taxes. This is a very bad idea.

This is reminding me of the case a few years back where some city or another expropriated dozens of homes and bulldozed them, against the wishes of the community - so that Wal-Mart could build a huge store.

[You Need A Thneed]

Originally Posted by DizzyEdge

So in essence, the chamber of commerce came up with a plan to fund capitol projects via a tax the businesses don't actually pay

No, businesses pay the same GST as anyone else. However, only the end user pays the GST, or else we'd be compounding 5% each time a product changes hands before getting to the end user (which would be a lot of money).

Companies pay GST on things that they are the end user of, just like anyone else.

[MichaelS]

Originally Posted by freeweed

Every place in Canada is highly socialist already. Hell, that applies to most if not all of the western world.

Hence austerity measures...

[freeweed]

Originally Posted by MichaelS

Hence austerity measures...

Austerity isn't a necessary result from socialism. Hell, what corporations have been doing for the past 4 years easily qualifies as "austerity measures" - but we just call it "cost control" or "cutbacks".

[MalcolmTucker]

Originally Posted by suburb

Okay - so that than is something that could easily be increased to 2 cents or what have you. The mechanism / process is already in place, and per the previous note, the distribution of tax burden is semi-fair with this method.

The city gets 5 cents a litre from the province, and around half that from the feds (but the gas tax formula isn't based on sales for the feds).

As long as the extra taxes are approved in a referenda I don't have a problem with them. Otherwise, the province will politically own the tax by giving the power away.

If the people own the tax, it might stay around long enough to actually accomplish stuff, unlike the car registration levy in Toronto for example.

[bigcanuck]

Originally Posted by MalcolmTucker

The city gets 5 cents a litre from the province, and around half that from the feds (but the gas tax formula isn't based on sales for the feds).

Correct - Link - from July 2010

[Cage]

Originally Posted by You Need A Thneed

No, businesses pay the same GST as anyone else. However, only the end user pays the GST, or else we'd be compounding 5% each time a product changes hands before getting to the end user (which would be a lot of money).

Companies pay GST on things that they are the end user of, just like anyone else.

Generally speaking companies do NOT pay GST/HST (they do however pay PST in all provinces that have this tax).

Example company has cost of $40 for parts and sells the assembled widget for $100. The cash outlay is $42 ($2GST, $40 for the part) and the cash in-the till is $105 ($100 for the product and $5 GST). To further complicate things, Company A buys office supplies for a GST component of $1. At the end of the month Company A remits $2 as GST payable to Receiver General for Canada ($5 sold to the consumer less $3 GST they paid to their suppliers). In effect Company A does not pay GST.

Company's that supply zero rated goods or services (e.g. most Grocery items) will always get a refund of their GST paid. Again these companies do not pay GST.

There is a third group of company's that supply GST exempt services. Orthodontists and Dentists are in this group. They do pay GST because they cannot claim an input tax credit for the GST that they pay.

[tenth]

Originally Posted by You Need A Thneed

No, businesses pay the same GST as anyone else. However, only the end user pays the GST, or else we'd be compounding 5% each time a product changes hands before getting to the end user (which would be a lot of money).

Companies pay GST on things that they are the end user of, just like anyone else.

That's not the case. Generally speaking, businesses can claim an input tax credit for virtually everything on their GST return (subject to some pretty specific exceptions).

As an example, office supplies. At the end of the day when office supplies are consumed by a business, the CRA will have netted 0% GST from the point of producing the product to the point they end up in the garbage.

[Calgarian]

Nenshi called out Mar forn his comments about Municipal Taxes and transit funding. I wonder if this relationship will be like Bronconnier vs. Stelmach, I hope not.
http://www.cbc.ca/news/canada/calgar...ar-nenshi.html

[MalcolmTucker]

Mar flip flopped and said cities should be allowed to implement new areas of taxation like a gas tax add on if approved by their citizens.

Sales tax since you need the feds and province onside I would think would be much harder to do.

[1ajs]

1% increase hmm why not province wide and the money from that 1%increase stays withing that municipality or city it was genirated in...

[Cage]

Originally Posted by 1ajs

1% increase hmm why not province wide and the money from that 1%increase stays withing that municipality or city it was generated in...

Its near impossible to track or develop the legislative rules to determine the point of origin for goods or services to within a municipality.

Consider the following of an Oilfield Services company.
- Head office and all invoicing/cash management is done in Calgary.
- Outside Salesperson lives in Grande Prairie.
- Goods are shipped from a third party warehouse in Edmonton.
- The goods are for a job site in Ft MacMuyrray.

Which city gets the 1%? All the above cities will make a claim that they deserve the 1%. Should you allocate .25% to each city?