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Author Topic: 1% enough?  (Read 1747 times)

Offline sailor723

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1% enough?
« on: October 31, 2007, 05:40:49 am »
So...Assuming the "mini" budget passes today... Do you think the 1% reduction in GST coming Jan 1 is enough to make people wait to buy cars?

Also...Isn't it unusual for a government to change a sales tax and not have it effective immediately?
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Offline inco

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Re: 1% enough?
« Reply #1 on: October 31, 2007, 05:44:13 am »
Mr. Flaherty was on the news last night and mentioned that the provinces need 60 days notice before they can enact changes. Since they are the collectors, I guess that makes sense.
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Offline tpl

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Re: 1% enough?
« Reply #2 on: October 31, 2007, 05:48:08 am »
Reducing the GST is not a sensible way to spend $5Bn on tax reduction. But it was a Tory promise.

I think that he really ought to be reading his economic statement in Parliament not in front of a TV camera and he should be announcing the cuts as part of a formal budget speech... which that nearly was yesterday.

That tradition of consumption taxes changes having effect immediately is necessary when taxes go up rather than when they go down.   Although I'd have to agree that in this case the auto dealers will have just one more problem.

Quote from: inco on October 31, 2007, 05:44:13 am
Mr. Flaherty was on the news last night and mentioned that the provinces need 60 days notice before they can enact changes. Since they are the collectors, I guess that makes sense.
Yes the Maritimes collect the HST for the Feds and liquor boards would have to change their tax  inclusive pricing as well.
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Offline sailor723

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Re: 1% enough?
« Reply #3 on: October 31, 2007, 06:32:48 am »
Well,I'm in the market for a new vehicle. I own my Pathfinder so there's no time limit on replacing it the way there would be if it was a lease. Unless there was some sort of special program I think I'll probably wait to Jan. Assuming I spend 35-40K on a new vehicle that's $350-400 that might as well be in my pocket as the government's. This holds true whether I buy in Canada or the US. Although in the case of the US any drop in the dollar would offset this.
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Offline airbalancer

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Re: 1% enough?
« Reply #4 on: October 31, 2007, 06:36:34 am »
The last time they deceased it, alot companies deceased their prices by 1%, it was announced in April and drop was in July
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Offline sailor723

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Re: 1% enough?
« Reply #5 on: October 31, 2007, 07:09:15 am »
Quote from: airbalancer on October 31, 2007, 06:36:34 am
alot companies deceased their prices by 1%,

Sorry...do you mean "DEcreased" or "INcreased"
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Offline airbalancer

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Re: 1% enough?
« Reply #6 on: October 31, 2007, 10:30:51 am »
Quote from: sailor723 on October 31, 2007, 07:09:15 am
Quote from: airbalancer on October 31, 2007, 06:36:34 am
alot companies deceased their prices by 1%,

Sorry...do you mean "DEcreased" or "INcreased"
They lower their prices by 1% until the new GST% kicked in.
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Offline Cord

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Re: 1% enough?
« Reply #7 on: October 31, 2007, 12:34:05 pm »
Quote
I think that he really ought to be reading his economic statement in Parliament not in front of a TV camera ...

I read something about them not being able to deliver it in Parliament due to some action of the opposition parties. Can't remember the details ...
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Offline Cord

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Re: 1% enough?
« Reply #8 on: October 31, 2007, 12:36:24 pm »
Quote from: airbalancer on October 31, 2007, 06:36:34 am
The last time they deceased it, alot companies deceased their prices by 1%, it was announced in April and drop was in July

The car ads proclaiming "5% GST Sale" will be out by tomorrow. Just as they were the last time the GST was reduced.
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Offline ovr50

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Re: 1% enough?
« Reply #9 on: October 31, 2007, 12:45:14 pm »
I don't think the 1% GST reduction will defer many buyers, especially if a trade-in is involved as the "net" saving is reduced by the trade getting 1% less credit.

I also agree that it is a poor way to effect a tax cut; but it buys votes from the masses who vote with their pocketbook instead of their head.

I can't see any way the Tories could lose a federal election at the moment.
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Offline UmroAyyar

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Re: 1% enough?
« Reply #10 on: October 31, 2007, 12:52:29 pm »
Quote from: Cord on October 31, 2007, 12:34:05 pm
Quote
I think that he really ought to be reading his economic statement in Parliament not in front of a TV camera ...

I read something about them not being able to deliver it in Parliament due to some action of the opposition parties. Can't remember the details ...

The finance minister needs unanimous consensus of all the political parties holding seats in the Parliament to do so. All but NDP gave their consent.
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Offline Cord

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Re: 1% enough?
« Reply #11 on: October 31, 2007, 12:56:07 pm »
That was it. Thanks Umro.
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Offline sailor723

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Re: 1% enough?
« Reply #12 on: October 31, 2007, 04:01:21 pm »
Quote from: airbalancer on October 31, 2007, 10:30:51 am
Quote from: sailor723 on October 31, 2007, 07:09:15 am
Quote from: airbalancer on October 31, 2007, 06:36:34 am
alot companies deceased their prices by 1%,

Sorry...do you mean "DEcreased" or "INcreased"
They lower their prices by 1% until the new GST% kicked in.

Oh...I see what you mean. I guess the cynical side of me would wonder if a car dealer's lowest price he'd take wouldn't end up being 1% higher than before if he was advertising he would only charge 5% GST :)
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Offline The Mighty Duck

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Re: 1% enough?
« Reply #13 on: October 31, 2007, 09:16:43 pm »
Quote from: sailor723 on October 31, 2007, 05:40:49 am
Also...Isn't it unusual for a government to change a sales tax and not have it effective immediately?

Not really feasible.  GST is collected by the retailers: they need time to adjust their systems to the change.  That can be more difficult than it sounds - I know our receipts carried a "7% Old GST" line for months after the last cut, as part of the transition.  Businesses need time to adjust their systems.  :)
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