(The Canadian Taxpayers’ Federation is an independent tax research and commentary organization, which I would describe as leaning a little more fiscally right than left. I’m happy to pas on for you to read what they have just had to say about the BC government’s Horrifying Sales Tax (HST) and how it will impact most of us. Harv Oberfeld )
“Among the many broken promises of the B.C. Liberal government was the surprise sales tax harmonization announcement. While harmonization may bring greater investment and more high paying jobs to the province in the long run, the short run reality is that hard-pressed families will be paying more for many goods and services, and the timing couldn’t be worse. Harmonization should only proceed if families pay less in total tax.
The harmonized sales tax (HST), set to kick-in on July 1, 2010, brings together the 7 per cent provincial sales tax (PST) with the 5 per cent goods and services tax (GST) for one 12 per cent tax paid by consumers. Harmonization removes the PST on business inputs, things like hammers and nails, and gets rid of the web of PST exemptions that create special benefits for some businesses. It lowers costs to business, gets government out of the business of picking winners, and broadens the tax base. However, because of the elimination of PST exemptions, families will pay an additional 7 per cent tax on food in restaurants, new homes costing over $400,000, newspapers, accountant’s fees and home renovations – just to name a few.
Citizens are outraged about harmonization, and rightly so. Harmonizing the sales tax is a significant change from previous government policy and came as a complete surprise. During the recent provincial election, the B.C. Liberals said they would not harmonize the sales tax. This seems to be yet another snap decision made, like the carbon tax, with no consultation by a paternalistic government. This sudden and unexpected turnaround is a slap in the face to all British Columbians.
Many are asking, why now? The $1.6 billion in transitional funding from the federal government will probably go a long way in helping the provincial government overcome its pre-election, spending-spree-created budget deficit. But it’s still money being borrowed by the federal government to bribe the province to harmonize, adding to the federal debt and creating a bigger tax burden for future generations.
The official reason, however, was to create an investment climate competitive with that of Ontario, which is also implementing an HST on July 1, 2010. But why do we want to be competitive with a ‘have-not’ province? Why not be competitive with the province right next door – Alberta? It has no PST at all and a higher basic personal income tax exemption. Lowering the PST would be one way to help families bear the burden of higher prices. The Atlantic Provinces did just that when they introduced the HST in 1997.
A much better tax-cut option, and one included by the Ontario government when it announced the HST, is an income tax cut. Reducing the burden of income taxes for all British Columbians would be best achieved by increasing the basic personal income tax exemption. Right now, the basic personal exemption in B.C. is $9,373, but it is $16,775 in Alberta and even $12,945 in Saskatchewan. There is plenty of room for the government to leave more money in the pockets of taxpaying families, increase the incentive to work, save and invest, and lower the impact of the HST.
Although the HST may have some positives in the long run, the arrogance of the tax change coupled with higher taxes for consumers make it mandatory for the government cut other taxes. This will get government out of our pockets and allow hard working families to spend their own income in a way that best serves their needs. Moreover, it should be the only way British Columbians should accept the HST. “
Courtesy: Canadian Taxpayers’ Federation
13 responses so far ↓
1 Norman Farrell // Aug 27, 2009 at 11:09 pm
If you put $1,000 into the jeans of the poorest 100,000 families in this province, the economy gets an instant boost of $100 million local spending on essentials. Reward the richest 10,000 with $10,000 each and they will lease new BMWs or visit Vegas or golf courses in Arizona. How is it that taking income out of the hands of the poor is efficient for a local economy?
(Response: Exactly! A friend of mine tried to book at tour through Hungary etc .. and found they were sold out for the rest of the year; another was interested in doing a 23-day cruise cruise from Venice
on Celebrity next May ..sold out completely. Recession? Maybe for the middle class and many small businesses ..BUT the banks are still reporting profits in the BILLIONS, the oil companies etc are still raking it in ..and the rich are still living the good life and enjoying world travel…while middle class families can hardly pay for a camping trip and school supplies. And the HST will make their lives even harder. It stinks. h.o.)
2 DMJ // Aug 27, 2009 at 11:44 pm
I sense a growing anger in BC ( I live in Delta and we voted for an independent) and that anger is pointed directly against the premier and his minions.
There is also growing anger against the NDP for failing to provide a credible leader.
This combined anger bodes ill for the province as if one has a choice between a gangster or the village idiot, one tends to stay home.
But there is third growing anger and that is against the mainstream media.
What is happening (and all those news media oriented polls I from ipsos, et al, that I am doing) is the mainstream media is in tizzy wondering why people are avoiding them like the plague.
I’ll tell you why; the mainstream media is corrupt, people don’t believe what the papers say or what is aired on the radio and TV.
It is the age of the Internet and the blog and the Internet and the blog are constantly embarrassing the mainstream media, to the point where they have become laughable.
The HST will pass, because the mainstream media is in the Premier’s pocket, but in a time in the not so distant future, the blog will become the media of choice, then the fun will begin!
Adiós Baldry, Good, and a host of over the hill reporters who are too comfortable with politicians. We need muckrakers and real investigative reporting and only then will issues like the HST be fully debated.
(Response: The HST will pass …not because of the media ..but because the Libs have a majority, and almost none of them are brave enough to stand up against the Premier. It saddens me that people have lost trust in the media .. I hear it all the time. And it’s easy to see why. I think corporate control, lack of funding and lack of hiring of politically knowledgeable, aggressive young cubs is hurting badly. I still hope that will change .. before the media lose it all. h.o.)
3 Ed S // Aug 28, 2009 at 1:58 am
As long as a compliant provincial press keeps it’s hands on the propaganda organs of B.C. we are, alas, very likely to get them all climbing on board the Government badwagon after the Olympics.
I find it insulting to claim that James is not a credible leader for the NDP. Actually I find it sexist. That’s the real reason people won’t vote NDP, don’t kid yourself.
(Response: Interesting that despite all the wounds on Campbell, a poll result revealed today showed the Premier’s rating is way down (no surprise, really) BUT although the NDP is UP, James is DOWN in the public’s opinion. Nuff said. (Nothing personal Carol! h.o.)
4 Leah // Aug 28, 2009 at 4:15 am
If the HST was meant to help us “in the long run”, it will fail miserably. You can’t “shift” corporate taxes to a citizen, yet expect that citizen to keep buying as he or she once did. That’s what this tax is, a permanent shift – to allow corporations more profits and less responsibility. Do people really expect a corporation to drop their prices? To pass the savings on down? Get Real!
Look at Terasen, their PST was 36 Million, dropped to 4.5 Million – and they still refused to pay it. They’re considered a good corporate citizen by this government – but how do you feel about making up the tax this Corp refuses to pay? And how many others are there out there just like them? No one out here knows.
As for Carole, I’ve been an NDP supporter/voter for the last 10 provincial elections – that will end if she is still leader in the next election. That is not sexist. People don’t vote for someone they can’t believe in, it’s that simple. Either she stands up and does her job, or she stands down, and allows someone who knows how to do it take over. Thus far, I don’t have a lot of hope.
5 seth // Aug 28, 2009 at 4:58 am
While it is ironic that Bader at the CTF and her gang were the biggest cheerleaders for El Gordo during the election, I love her no sales tax idea compete with Alberta idea. I’ve got a better one – replace all sales tax with income tax on the rich.
When Mulroney’s fascists introduced GST there was a lot of analysis that showed an increase in income tax by 2% would have eliminated the need for a GST. In fact there are numerous studies to show that income tax is a far fairer tax structure than sales tax.
Of course, just like with our fascist governments today big business told Mulroney what to do and here we are.
If we want efficiency, lets eliminate all sales tax and a la Obama put a 10% tax increase on incomes over 250K to pay for it. After all the rich are the ones that want US to pay for tax efficiency. Let them put THEIR money where their mouth is!!!
6 Leah // Aug 28, 2009 at 3:43 pm
Seth, a great idea! Won’t happen, but good idea anyway…after all…we all know the rich didn’t get that way by paying their fair share. They got that way by hiding their earnings in foreign banks, and/or not declaring them in the first place.
Mind having the sleaze of government in your corner doesn’t hurt either. Just ask all those socially conscious corporations whose tax we have to pay in their stead, beginning July of next year.
7 Lynn // Aug 28, 2009 at 4:59 pm
Thanks Harvey. Great article. I am going to stop spending. Right now.
8 S.L.P. // Aug 28, 2009 at 7:48 pm
The rich have never paid their fair share of the tax burden. In the last 150-200 years we have simply changed irresponsible royal families for irresponsible corporations, which are owned and controlled by the rich……so here we are back at the same place once again………… the same place that revolution took us away from……..
BUT there have been warnings about this a very thing long ago…….
Thomas Jefferson 1802:
“’I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.”
Franklin Roosevelt:
The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism–ownership of government by an individual, by a group, or by any other controlling private power.
9 genuine // Aug 30, 2009 at 6:24 pm
S.L.P,great quotes ,I hope that people have read them and taken them to heart because that is truly what is happening,fascism,and some people have been hung in village squares for that!
10 genuine // Aug 30, 2009 at 6:36 pm
To make matters worse they’re using our tax dollars to keep us away from our resources,our resources are ours and do not belong to the liberal party of BC,that’s why anything that is enacted to sell off or give away of resources beyond a parties mandate of four years should be brought to referendum,which would legitimize any action made by government of the day!
11 genuine // Aug 30, 2009 at 8:54 pm
I’m not professing to be a know it all but ,I have been reading these blogs ‘follow the talk shows,listen intently to all sides,and came to the conclusion,that if one turns to far to the right and keeps to the end of the path he or she will follow it to the doorstep of fascism or on the other hand if one follows to far to the left he or she will end up on the doorstep of Communism,so as a centrist ,I would follow the road to democracy,where we would all end up at the doorstep of a common good for all,isn’t that the path we were promised if we followed,we followed but promises where made to be broken?
12 Li // Aug 30, 2009 at 10:53 pm
I find Maureen Bader – BC director of the Canadian Taxpayers Federation – to be intellectually dishonest more times than not.
In this particular article the facts do not get in the way of her argument, though a little more rigour would be nice. Bader should have given a specific level for the increased basic personal exemption in BC and her reasons for that dollar figure.
My suggestion would be $16,640 – this is equal to working full time at 40 hours per week (2080 hours/year) times BC’s infamous minimum wage of $8/hour. The BC Liberals would save face with their business brethren and the poor working stiffs would have more disposable income.
13 Crankypants // Aug 31, 2009 at 3:36 am
You can pretty much bet that by the time the HST becomes effective, the Liberals will will come up with some sort of a tax break for the restaurant industry and the new home builders. These two industries were just too helpful to the Liberals in the last election, and Campbell will find a way to smooth things over with them. Unfortunately, whatever accommodation these two industries get will also come out of our pockets in the form of more taxes or cut services. It just keeps getting better and better.
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