Idea alert

Jack Mintz, an economist whose expertise the Harper government values very, very, very, very, very, very, very, very, very, very much, has co-authored a report calling for the elimination of various GST exemptions.

By eliminating the set-asides such as medicines, books, financial services and especially food, governments could reap an additional $39 billion in revenue annually — about 60 per cent higher than current levels. That cash bonanza could be used to cut income taxes, fund social services, or both, or even to cut almost in half the 12-to 15 per cent Canadians pay in harmonized sales taxes in most provinces,

“In reality, Canada’s VAT (value-added tax) is riddled with exemptions, rebates and reduced ratings that seriously damage its effectiveness,” Smart writes in an update of a paper he delivered to a conference in Calgary last fall …  “This paper makes the case for an ideal VAT. Taxing consumer commodities at a single rate reduces opportunities for tax evasion, keeps revenues steady and drastically simplifies compliances for businesses.”

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