I agree with Chris. It is a dilemma. Consumption taxes are important revenue-raising taxes and they tend to be quite efficient. On the other hand, the income taxes are more progressive, so there is a kind of conflict between these two objectives that I talked about. But it does seem to me it was a terrible mistake to reduce the GST in Canada, because it collects a substantial amount of revenue in a relatively efficient way, and if the government wanted to have tax cuts, it seems to me the place to cut taxes would be at the low end of the income scale, on the income tax.
On April 14th, 2008. See this statement in context.