Sigh. The Conservatives set out an Economic Statement this afternoon, and it includes a measure to further reduce the Goods and Services Tax (GST) from 6% to 5%. From this, I infer that the Conservative government is willfully stupid:
- Reducing the GST is bad economics. Just ask anyone who has given any thought to the matter.
- Reducing the GST is bad - or at best, pointless - politics. Just ask voters.
Now, I can understand that the Conservatives are in the business of cutting taxes. But the intelligent way of implementing that agenda involves cutting stupid taxes and keeping (or even increasing) smart taxes. Sadly, that doesn't seem to be the Conservative way of implementing this agenda. According to Table A.1 on this page, the GST cut accounts for over 60% of the reduction in taxes over the next five years. Stupid, stupid, et cetera.
Okay, yes, they are accelerating the previously-announced rate at which the federal government would be reducing corporate taxes (Table A.2 from the same page), and that's a good thing. But it's not enough to dispel the odour of ideologically-driven amateurism.