Applying the GST tax to food sales - good or bad idea?

Great Debates
1

On the CBC (Canada’s public broadcaster) news this morning there was a story about a recommendation from the Agricultural Institute of Canada to have the GST tax added to food. The idea is that the money collected on food taxation could be pumped back into the argiculture industry here in order to help farmers, who’ve been having a hard time in this country for a while now.

For those not from around here, the GST is the Goods and Services Tax, a much loathed 7% sales tax that is applied to most things you pay for in this country but not food, medical costs, and certain other things (I think childrens clothing, rent, and some others). On top of that, every province except Alberta has their own sales tax, so whenever you buy something at a store in this country you’re usually paying 15% or more on top of the labelled price. As it stands, people below a certain income can get a GST rebate (I believe you need to make below $35,000 per year but I welcome correction) to make the tax less regressive, but it doesn’t truly cover what is usually actually paid out.

So here’s the debate: should the government seriously consider applying the GST tax to food purchased in grocery stores? The reason presented in the story seems honest and genuine. However, I personally think it is a very bad idea. Sales taxes of any sort are the most regressive taxes, having the heaviest effect on the poorest people, and unless they were prepared to really pump up rebates to those who receive them by a significant amount, this will hit the poor the hardest. Further, food is an absolute necessity, obviously, and throwing yet more government money scrounging on something that people cannot at all avoid paying for seems thuggish and brutal. This will have a very significant effect on the economy, I would guess, because after mortgages, car loans and regular bills, the largest expense for most households will be food. Suddenly increasing costs 7% in that realm is a huge jump.

I imagine not many here will support the idea, but hopefully some debate will be generated on the matter. Have at it.

2

Well, pretty much, it’s increasing the flow out of your pocket to the government.

The money will not be used only for agriculture. It never is. At most, it will replace what is currently used for agriculture.

So… where’s your benefit?

3

So an agriculture group says essentially ‘Increase taxes and give the money to us’. Pardon me if I am skeptical.

Farmers have recently had to cope with tough times. What with the frosts and droughts that no farmer in history has ever has to deal with. :dubious: That’s the nature of the farming business. Some years are bad, some years are good. Bad years aren’t anything new and it is a naïve farmer who doesn’t plan with that in mind.

And in good years, with no droughts or frosts and record crops? I’m sure they will be glad to give the money back, right?

4

Like I said, I don’t support the idea, but I think what is being referred to by farmers is that despite their ability to increase their yields over time, the cost of moving from animal and human-powered to mechanised farming has shot their profitability to hell. I believe there was mention of the rising cost of oil as part of the problem. Personally, I don’t really care, because there are better ways to solve that problem than by gouging me and every day Canadians at the grocery store. But that’s part of their stance.

5

No, of course not, since good years are also a disaster for farmers. Because bumper crops mean increased supply and therefore lowered prices.

So poor crops are bad for farmers, good crops are bad for farmers, average crops are bad for farmers. All straight now?

6

Not really. Seems like a no win situation for them. Why are they still farmers? Why are there any left? They would have all gone bankrupt by now if that was true.

Some farmers do alright, you know. They actually make money.

7

Yeah, that’s how I read it too. It seems like a strange rationalization for a tax increase to me. This shift to mechanized power has been going on for decades. If it truly has shot their profitability to hell, I wonder how they have survived for all these years.

I can’t argue with that. But name an industry that hasn’t been kicked in the nuts by the rising cost of oil. A special tax to support one group isn’t the way to go.

8

The GST is currently not applied to “essentials” - some groceries, childrens clothes, etc. It’s very confusing (buy one donut, pay GST; by a dozen, no GST) and rather political (are books essentials? What about feminine hygeine products? Who decides?)

Thus I think it would be a simple matter, and a great opportunity for the Promotion of Healthy Living (a meme the Canadian government has picked up lately) to tax only food that highly processed or otherwise nutritionally void. It would also be great to tax only food that is shipped from overseas (this would, in effect, be more of a carbon tax, and would give people incentives to support local farmers, whose produce is usually tastier and healther than imports). I doubt the trade regimes would allow it, but hell, trade regimes don’t allow softwood lumber tariffs either.

9

Heh. Yes, of course.

But you hear those arguments on the news all the time. Oooh, a drought, farmers are screwed! Ooooh, a bumper crop…that means low prices, farmers are screwed!

Of course it’s stupid. If every variation in weather means that farmers are screwed, farmers are totally screwed, since weather is guaranteed to be variable. Logically it is impossible for good weather, bad weather and average weather to all be bad for farmers. Of course, you don’t usually hear the argument that both good and bad weather hurt farmers in the same news story, it’s usually one or the other. But if all types of weather are bad for farmers then logically the problems of farmers aren’t primarily driven by weather, which makes these stories blaming the weather incoherent.

10

In general, the usual reason that sales taxes are not applied to food items is that it makes no sense to charge tax on something that is a basic necessity for people who are receiving government aid. In other words, you tax the food for the purpose of handing the money back to the buyer. The buyer can’t avoid buying food, since it is a staple.

Additional support for the idea of not taxing food then comes from the average person who loves the savings involved in not paying such a tax. Imagine the uproar from the public at the idea of having to pay tax on groceries!!!

Only suicidal member of Parliament (or Congress) would advocate such a step… :dubious:

11

The OP and another poster appear to say that because some self-important, self-serving group of button-bursting blowhards wanting government handouts through higher taxes and says so in a “news release” makes it a done deal (bolding mine).

What money?

The group’s “vision” reads like it was written by an illiterate PR flack seconded from the AIC’s Department of Redundancy Department who joined buzz words and phrases from Column A to buzz words and phrases from Column B. But none of it makes sense, not even in a vision way.

From the Agricultural Institute of Canada web site :

Let’s parse this pile of self-indulgent horse puckey.

. . . providing them opportunities for involvement in AIC activities, connection to a broad network of credible members. . . .

After releasing the methane, this says you can join the AIC. But it also points out that you should have no fear that the broad-based network (phrase from Column A) is made up of members without an ounce of credibility. Who would join an organization lacking credibility? So why mention it? Because it’s a Vision.

  1. There will be a positive impact on national public policy in the areas of environmental sustainability, food safety, and food sufficiency.

Nothing like a positive impact in the area of environmental sustainability (Column A), especially when food poisoning and impending famine are the implied threats. But WTF does it mean? What will have a positive impact? Never mind. There will be, just you wait.

  1. Public opinion will be informed on issues and possible science-based solutions

I can’t recall the last time public opinion was informed of anything, let alone issues (word from Column B). What a breakthrough! And thank God for science-based solutions. Beats the hell out of solutions from a woman wearing a bandana around her head and picking up Visions from a crystal ball.

  1. Members will be seen as high profile and credible

“Seen as.” Good enough, I guess, since the reality would be impossible. And Fred Fartswaggle, busy repairing the spark advance on his Cockshutt, will be officially high profile. Oh, and credible. Finally.

  1. There will be food for all - enhanced (Column A) sustainable (Column B) communities and food systems

It’s so sad — nay, tragic — that Canada is hungry. But we have a dream! There’ll be a chicken in every pot! Wait and see! And enhanced sustainable communities! Not your regular, boring unenhanced communities. There’ll be crystal sets! Maybe even TV! Street lights! Think of it! Communities will be sustainable, unlike those tens of thousands of unsustainable ghost towns littering the countryside. And don’t forget those food systems. Soon they, too, not only will exist, they’ll be enhanced! What will the AIC think of next? What won’t the AIC think of next?

No kidding.