Svend said:
All sales taxes are regressive because the poor pay a larger percentage of their income on them than the rich. I'd rather see the income tax increased, I don't need the daily reminder when shopping.
Not true, we all pay the same percentage.
Assuming that on average we spend 100% of our income on taxable items, then someone earning $21,400 per year will spend $1,400 on GST. Someone earning $107,000 will pay $7,000. Both pay the same percentage with the less well off paying less in absolute total.
Now under the conservative's plan they will give back approximately $200 to the person earning $21,400 and approximately $1,000 to the person earning $107,000.
Now do you see the problem with the conservative plan. It would be better to give the low income earner $500 and the high income earner $0. You can do that with income tax reductions, not GST reductions. The conservatives are playing political games with the GST to get elected not because it is a good idea.
As for being regressive, look at the two extremes.
First extreme, everything is taxable that you spend money on. In this scenario everyone pays the exact same percentage.
Second extreme, all the basic necessities of life are exempt and only luxuary items are taxable. In this scenario the tax is regressive towards the rich, not the poor.
The reason that many say that a consumption tax is a bad idea for the poor is that we are somewhere in between the extremes and that the poor actually do pay tax. If you only earn $6,000 per year you would pay sales tax but not income tax and it seems wrong that someone earning only $6,000 per year would pay any tax at all. That is why there is the refundable GST for low income earners.