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New Transit Funding Sources

Despite being a socialist, I dislike Andrea Horwath and the NDP for many reasons. However this may not be one of them. I support tax hikes to support services so I don't have a bias against these revenue tools (and some of them may make sense like road tolls which reduce the incentive to drive). But things like the proposed HST hike are regressive tools that unfairly hurt the poor more than others. To find out that as the liberals are talking about these new taxes, they are planning tax cuts for corporations and people making over 500,000 is not something I want to hear. Ill wait to see the NDP's transport plan before saying I will consider supporting them.
 
I'm really disappointed that Horwath is just pandering to the middle class. As the NDP should know, transit is a public good that requires public funding, and the only place public funding will come from is taxes and tolls. The middle and lower classes rely on public transit far more than the wealthy, and ensuring a strong, useful system is precisely the kind of thing the NDP should support.
 
Tulse said:
I'm really disappointed that Horwath is just pandering to the middle class. As the NDP should know, transit is a public good that requires public funding, and the only place public funding will come from is taxes and tolls. The middle and lower classes rely on public transit far more than the wealthy, and ensuring a strong, useful system is precisely the kind of thing the NDP should support.
Click to expand...

I think the NDP does support a strong useful system....they just disagree with the current government on how it should be paid for ;)
 
Evening said:
Despite being a socialist, I dislike Andrea Horwath and the NDP for many reasons. However this may not be one of them. I support tax hikes to support services so I don't have a bias against these revenue tools (and some of them may make sense like road tolls which reduce the incentive to drive). But things like the proposed HST hike are regressive tools that unfairly hurt the poor more than others. To find out that as the liberals are talking about these new taxes, they are planning tax cuts for corporations and people making over 500,000 is not something I want to hear. Ill wait to see the NDP's transport plan before saying I will consider supporting them.
Click to expand...


This is something I don't understand at all.

How do you come to the conclusion that the HST is harmful on the poor?

Let's review: Largest expenditure of most households, Housing: Rent - HST Exempt
Second largest expenditure of most households Food: Healthy Food (non-junk food) HST Exempt.

So, let's take a typical low-income earner: $12 per hour, 40 paid hours per week, $480 weekly gross income or about $1,900 per month

Income tax, CPP and EI deductions at that level (about 20% all in) so net pay of about $1,520

Largest expense, rent: (avg 1 bedroom) $950 - HST exempt
2nd exp, food: (typical cost $75 per week, or $300 per month) - HST exempt

So $1,520 - $1,250 = $270 in remaining expenses which are likely to be HST applicable.

At a rate of 13% their current sales tax burden is $35.10 per month

This compares with a payroll and income tax burden of $380 over the same period.

If one added a single percent to the sales tax, the added per month burden for the low income earner is $2.70 per month
If you add 1% to the lowest tax bracket their burden is $12.50 per month

All of that is before adjusting for the HST tax rebates. Which when you combine the provincial and federal rebate would be over $600 per year for the wage earner described above; or actually more than their entire HST payable in a year.

****

In order for HST to be regressive you have to compare MIDDLE income earners to the Rich; not low-income earners for whom it is quite progressive.

Its still moderately progressive in the middle to high income range as the rich will spend an ever smaller proportion of their expenses on the exempt items, thus paying a de facto higher rate.

That's not to say I would argue against appropriate income taxes for higher income earners or business; but I find this sales tax is regressive business a bit hard to take.
 
Northern Light said:
This is something I don't understand at all.

How do you come to the conclusion that the HST is harmful on the poor?

Let's review: Largest expenditure of most households, Housing: Rent - HST Exempt
Second largest expenditure of most households Food: Healthy Food (non-junk food) HST Exempt.

So, let's take a typical low-income earner: $12 per hour, 40 paid hours per week, $480 weekly gross income or about $1,900 per month

Income tax, CPP and EI deductions at that level (about 20% all in) so net pay of about $1,520

Largest expense, rent: (avg 1 bedroom) $950 - HST exempt
2nd exp, food: (typical cost $75 per week, or $300 per month) - HST exempt

So $1,520 - $1,250 = $270 in remaining expenses which are likely to be HST applicable.

At a rate of 13% their current sales tax burden is $35.10 per month

This compares with a payroll and income tax burden of $380 over the same period.

If one added a single percent to the sales tax, the added per month burden for the low income earner is $2.70 per month
If you add 1% to the lowest tax bracket their burden is $12.50 per month

All of that is before adjusting for the HST tax rebates. Which when you combine the provincial and federal rebate would be over $600 per year for the wage earner described above; or actually more than their entire HST payable in a year.

****

In order for HST to be regressive you have to compare MIDDLE income earners to the Rich; not low-income earners for whom it is quite progressive.

Its still moderately progressive in the middle to high income range as the rich will spend an ever smaller proportion of their expenses on the exempt items, thus paying a de facto higher rate.

That's not to say I would argue against appropriate income taxes for higher income earners or business; but I find this sales tax is regressive business a bit hard to take.
Click to expand...
Frozen bacon is HST-exempt, yet is not exactly healthy
 
TOareaFan said:
I think the NDP does support a strong useful system....they just disagree with the current government on how it should be paid for ;)
Click to expand...

If they disagree with new broad taxes, then they don't support funding a strong useful system, which is equivalent to not supporting one at all.
 
Tulse said:
If they disagree with new broad taxes, then they don't support funding a strong useful system, which is equivalent to not supporting one at all.
Click to expand...

it's just politics. The NDP wants to be the ones running the province. Why on earth would they agree with anything the Liberals puts forward. They need a pretext to not support the spring budget and they found the perfect one. The proposed Transit taxes are unbelievably unpopular and Horwath knows that Ontarians will "forgive" her for provoking an election, which was made clear with the NDP performance in the by-elections. This doesn't mean they don't support public transit just as much or more than the Liberals, they just want to run it themselves.
 
I wouldn't say they are horridly unpopular given the core area they serve is the liberals strongest area. (416) maybe not so much in the 905 though. There is a whole lot of mis information going around with the transit taxes (many people think they will be province wide to build transit only in Toronto), and I think most in the 905 are unaware that there will actually be transit projects in suburban Toronto rather than just some new subway lines for Toronto.
 
Northern Light said:
This is something I don't understand at all.

How do you come to the conclusion that the HST is harmful on the poor?

Let's review: Largest expenditure of most households, Housing: Rent - HST Exempt
Second largest expenditure of most households Food: Healthy Food (non-junk food) HST Exempt.

So, let's take a typical low-income earner: $12 per hour, 40 paid hours per week, $480 weekly gross income or about $1,900 per month

Income tax, CPP and EI deductions at that level (about 20% all in) so net pay of about $1,520

Largest expense, rent: (avg 1 bedroom) $950 - HST exempt
2nd exp, food: (typical cost $75 per week, or $300 per month) - HST exempt

So $1,520 - $1,250 = $270 in remaining expenses which are likely to be HST applicable.

At a rate of 13% their current sales tax burden is $35.10 per month

This compares with a payroll and income tax burden of $380 over the same period.

If one added a single percent to the sales tax, the added per month burden for the low income earner is $2.70 per month
If you add 1% to the lowest tax bracket their burden is $12.50 per month

All of that is before adjusting for the HST tax rebates. Which when you combine the provincial and federal rebate would be over $600 per year for the wage earner described above; or actually more than their entire HST payable in a year.

****

In order for HST to be regressive you have to compare MIDDLE income earners to the Rich; not low-income earners for whom it is quite progressive.

Its still moderately progressive in the middle to high income range as the rich will spend an ever smaller proportion of their expenses on the exempt items, thus paying a de facto higher rate.

That's not to say I would argue against appropriate income taxes for higher income earners or business; but I find this sales tax is regressive business a bit hard to take.
Click to expand...

You make a very fair point. I hadn't considered the rebates and exemptions. I think I would still prefer revenue tools that give incentive to not drive (like road tolls) compared to am HST hike. If that's not enough, I'd prefer income and corporate tax hikes on those who can definitely afford it.

Worst case, if the liberals do want an Hst hike saying we need money to fund transit, then they shouldnt be at the same time reducing corporate and high income bracket taxes.
 
Solid Snake said:
This doesn't mean they don't support public transit just as much or more than the Liberals, they just want to run it themselves.
Click to expand...

They won't run it without more funding, which means more tax revenue. If they are saying otherwise, they are being hypocritical, which is seriously disappointing, at least to a potential NDP supporter.
 
Evening said:
You make a very fair point. I hadn't considered the rebates and exemptions. I think I would still prefer revenue tools that give incentive to not drive (like road tolls) compared to am HST hike. If that's not enough, I'd prefer income and corporate tax hikes on those who can definitely afford it.

Worst case, if the liberals do want an Hst hike saying we need money to fund transit, then they shouldnt be at the same time reducing corporate and high income bracket taxes.
Click to expand...

What plans does this Liberal government have to reduce "high income bracket taxes"....I have heard of none. Corporate tax cuts are an easy target as it appears to line the pockets of the rich corporations....but raising corporate taxes in a very fluid/transferable job world runs the risk of losing the very businesses you are targeting.
 
Wynne seems to have cancelled McGuinties planned cut of the corporate rate to (IIRC) 9.5% from the current 11%.


the problem is that the corporate rate raises very little money, you would need a rate hike of 4% to match a 1% HST hike, and that isn't really possible without kicking business out of the province completely. Ontario's corporate rate is already rather low, so you may be able to raise it by 1-2% but you can't get your full funding from it.

I really wish Horwath was willing to negotiate with this, say get a 1% corporate rate hike and the non residential parking tax that Metrolinx proposed, along with maybe $0.03 - $0.04 cent gas tax and a .5% HST hike.

Also, Road tolls are rather useless and extremely (Stupidly really) expensive to implement. A gas tax could achieve exactly the same purpose (raising the cost of driving while collecting transit revenue) and be implemented at almost no cost with immediate effects instead of tolls which require several years to get the infrastructure in place and then a few years to pay for its installation from the revenues it collects.
 
Last edited:
I don't really know what tools are actually being proposed and which ones aren't at this point. Metrolinx is proposing the HST increase as a big part of their plan, while the Golden Panel is recommending a corporate tax and a gas tax.

http://www.thestar.com/news/gta/201...es_corporate_gas_taxes_to_fund_expansion.html

I always thought that the Corporate Tax recommendation was specifically aimed at Horwath in order to gain her support. Has she even acknowledged this report?
 
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