It was a savvy move by the Conservatives to announce they would reduce the GST if elected to power on Jan. 23. Canadians have been 'loving' to hate the Goods and Services Tax ever since its conception under the Tory government of former prime minister Brian Mulroney in 1991.

Capitalizing on all that collective negative feeling, the Liberals vowed to scrap the tax and made it a major plank of their 1993 campaign in which Kim Campbell's Tories were almost completely wiped out.

But once the Liberals were back in power they reneged on their promise saying the tax was needed to help deal with a massive budget deficit left behind by the Conservatives.

With all that history and emotion and billions of dollars packed into the seven per cent levy, political opponents, pundits and ordinary Canadians from across the country have been piping in with their two cents ever since Tory Leader Stephen Harper made his big announcement on Thursday.

WHAT THE TORIES PROMISED

Harper has pledged to reduce the GST by one per cent immediately if Canadians elected a Conservative government on Jan. 23. He would then scrape off another one per cent over the following four years. That would ultimately bring the GST down to five per cent.

According to Harper, the immediate cut would save an average family of four with an income of $60,000 a year about $400 annually.

"The purpose of this tax cut is to provide broadly based, progressive, fair tax relief to every single Canadian," said Harper.

"This will be a tax cut that you will see every time you shop, tax relief that you experience, a tax break that no politician will be able to take away without you noticing."

WHERE THE PARTIES STAND

Liberals: "I don't believe that is the path to follow." - Liberal Leader Paul Martin

Reacting to the Tory pledge, Martin said cutting the GST would be wrong. He said his party is focused on "more sensible" suggestions.

Those include the $30-billion income tax-cut plan over five years that the Liberals introduced in the dwindling days of the 38th Parliament.

Martin said his plan to cut personal income taxes would affect more Canadians, favouring especially middle and lower income earners.

His finance minister, Ralph Goodale, said the Tory proposal, in contrast, benefits people "mostly in the upper income brackets."

The Grits also say that they're not simply promising tax cuts: they'll raise old age security pensions as well as energy rebates for lower income earners.

But as they tout income tax cuts, the Liberals find themselves in the strange position of having to defend the GST, which they once vowed to abolish altogether.

"The GST is the tax that everybody loves to hate," Goodale acknowledged on CTV's Mike Duffy Live. "When you're faced, though, with the choices ... fairness, balance, economic impact. What is going to bring the biggest gain to the largest number of Canadians?"

"Personal income tax cuts."

NDP: "We say that's wrong." - NDP Leader Jack Layton

Layton accused both the Grits and Tories of having their priorities out of whack.

"They are wrong on the issues; they are out of touch with Canadian values; and they have been ineffective in Parliament," he said in a campaign stop in Oshawa, Ont. on Friday.

A prime example, he said, is Harper's tax cut plan.

"People would like a break on their taxes, no doubt about that," he said. "But then good Canadian common sense comes into play -- common sense being notably lacking from Mr. Harper's agenda."

Layton said before a government even thinks of tax cuts, issues such as long-term care for seniors, tuition fees and student debt, and public health care should come first on the agenda.

The NDP Leader summed it up: "Stephen Harper can't help students attend university or young people get the training that they need with the GST cut.

"Cutting the GST doesn't care for one child. Cutting the GST doesn't look after one senior. Cutting the GST does not protect health care."

Bloc Quebecois: "It would hurt Quebec" - Bloc Quebecois Leader Gilles Duceppe

Duceppe said he needs to study the details on the Tory proposal before he would comment fully. But he told reporters in Laval, Que. on Thursday that a blanket GST reduction plan would end up hurting revenues in Quebec.

Such a plan, he says, fails to recognize the "fiscal imbalance" that exists between Ottawa and the provinces.

He said the Bloc also wants provinces to get more taxation powers, and that he wants to see how the Conservative GST plan would affect that.

Duceppe said the Bloc's position on the GST is to abolish it on some goods -- such as children's clothing and on books. "Because when we tax books, we tax knowledge," he said.

Green Party: Thumbs down.

The Green Party has not officially stated its position. But a party spokesperson told CTV.ca that the Greens are opposed to the Conservative GST promise and that they will announce its response later this month. They will also be reacting to Paul Martin's income tax cuts.

WHAT THE EXPERTS SAY

John Williamson, head of the Canadian Taxpayers Federation: "It's a good move for the Conservative Party to make in the campaign," Williamson told CTV News.

"It's also a good move for taxpayers over the long term, if it does happen."

Williams, who calls critics of the plan "misguided," said it will end up putting about $8.5 billion back into the pockets of Canadians and out of government coffers.

"And don't forget, we have multi-year, multi-billion dollar surpluses. And all a surplus is, is an over taxation of Canadians."

But Williamson said he's happy that both two major parties are finally talking about taxes.

"This is a shift in the country whereby politicians realize the path to power is through lower taxes -- not higher taxes."

Jack Mintz, president and CEO of the C.D. Howe Institute: Mintz doesn't believe the GST tax cut is the best option for Canadians that the Conservatives could have chosen, but he isn't excited about unwise income tax-cutting options that are out there, either.

Mintz, head of an economic and social policy think tank, told CTV Newsnet that tax relief is generally a positive thing, but Canadians would get better results if taxes doing the most damage to the economy are cut.

He outlined some areas under the personal income tax umbrella that, if slashed, would serve lower income Canadians well:

• Income taxes for people earning between $20,000 and less than $30,000. "They face, actually, rather high marginal tax rates," said Mintz,
• Income tax of workers earning around $30,000, who Mintz said are taxed at rates between 60 and 70 per cent. "And that's not just taking into account personal income taxes, but payroll tax clawbacks from various income taxed programs."
• Investment income for seniors, taxed as high as 80 per cent.

"I think economists would tend to agree that the best thing to do now is to tax people in terms of what they take out of the social pot – on consumption rather than what they put into the social pot, which is their work and their investments and savings and risk that they're willing to take on."

Bruce Anderson, Decima Research CEO: "Cutting the GST may not add up as nicely as it sounds," said Anderson.

"Canadians have in the past felt somewhat more drawn to a GST cut than an income tax cut because they saw it as being more visible, and potentially more rewarding," Anderson told the Canadian Press. But the promise could turn out to be a bit of good politics leading to an ultimately bad policy.

But in light of budget surpluses that make tax cuts a possibility, "it's not so clear (Canadians) would favour the consumption (tax cut) over the income tax cut, especially if there were a vigorous debate about the economic advantages of one or the other."

What other economists have to say:

• "Stupid, stupid, stupid, stupid," McGill University economist Christopher Ragan told CP. People may like it, he said, because "it's the tax people love to hate."
• "I believe it's a poor idea," said economist Mike Veal of Hamilton's McMaster University. He said most economists would choose an income tax cut.
• Robin Boadway, a Queen's University economist, suggests another way to help low-income earners: increasing the refundable GST tax credit. He also told CP that Conservatives are actually looking for way to cut government revenue and thus spending, with an eye to reducing the overall size of the federal government and bolster the provinces.
• "Canada's problem is a productivity problem -- that's been identified," John Johnston, chief strategist with Harbour Group at RBC Dominion Securities Inc, told The Globe and Mail. "Cutting GST doesn't help productivity."
• Other criticisms levelled at the GST cut include the disproportionate 'savings' it would afford people who spend more. Lower-income Canadians, because they're not spending as much, would not realize as much savings.