I am leaving my comfort zone and heading into economics again. I have a basic understanding and my proposals would be best run past the economists before being implemented. Yesterday I mentioned giving 1% of the GST directly to the local government where it is collected as a means to better fund communities. I’ve pondered income tax changes in the past and this new sales tax would work with those changes.
My proposal is having a single, national 10% value added sales tax. The tax would be split with 1% staying in the community it was collected, 1% going directly to the pooled federal and provincial debts, 4% going to the province it was collected in and the remaining 4% going to the federal government. Once all debt was cleared the 1% could be used as directed by Parliament in cooperation with the provincial legislatures. Initially this may lower the governments’ revenue streams so it would be wise to eliminate all corporate subsidies while moving into this system.
Existing excise taxes on tobacco, alcohol, gas et cetera would be kept pending a expert review of benefits/costs. Raising the gas tax, as I mentioned yesterday, and putting all gas tax revenue would help rapidly end the deficit and debt. Elimination of debt opens more money for tax cuts, programs and investment, which is up to the legislature or parliament.
In addition to these tax proposals an annual guaranteed income would replace the GST and income tax rebates. Others have been working on this to replace the current hodgepodge of income support programs.
I am interested to see if someone could cost these ideas out and if they are actually workable improvements. Feedback in the comments please.