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GST and Economy

[Posted on : 2013-02-07 by Monica] Cutting the GST was a political diecsion, not an economic one. It looked like a cheap trick at the time, but now we discovering the true cost.I just don't buy the argument that Harpers actions protected the economy from recession, or that he had any particular motivation beyond electoral success. Just because Harpers a trained economist doesn make him a good economist. As the saying goes, if you laid all the economists in the world in a straight line, they wouldn reach a conclusion. Our economy, for better or worse, is primarily based on resource extraction; increased demand from the "less-than-developed" or emerging economies (i.e. China, India) has led to increased markets for resources, which has led to our currrent strength. Do you really think domestic demand, in a market of only 33 million people, has that strong an effect in an export oriented economy?Admittedly off the top of my head, if I was looking to increase tax revenue, I would impose a luxury tax on items priced beyond a given percentage of a averaged income. Yes, the truly wealthy would scream, but given the current economic climate, I doubt that there would be much sympathy for people who spend more on a watch or a bottle of wine than some people earn in a year.

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