Friday July 29, 2011

HST Comment

Random Rafe

Seniors and low-income people hit the hardest by HST consumption tax 

Submitted by Rafe Mair


here is no "good" result possible out of the HST referendum and we have to understand that. It will cost us to get out and it will cost us dearly, year after years, in the long term.

It's a bit strange, isn't it, to hear the Liberals saying "if you want to penalize us, wait until the next election but vote "no" because we think
that's what you should do!

For me there are four overriding reasons I'll be voting YES to abolish the HST.

Consumption taxes always hit the least well off in society, even with rebates. Thousands of seniors and other fairly low income people will be hit hardest. Suppose, for sake of argument, we all pay $1000 in tax on necessities - food, clothing, rents etc. Clearly that $1000 is a much greater % of income, the lower the income is. This is the reason we have a
graduated income tax - it's called fair play.

We are surrendering tax room to the federal government who will undoubtedly raise the % in times to come and these raises will, in effect, "steal" tax room for the province just as Income Tax has. (Just why we must make a
permanent transfer of a provincial right under the constitution to the Feds is quite beyond me).

We're expected to believe that the savings to business by reason on the HST will be cheaper for them to deal with and that these savings will in turn come back to us as lower prices. I cannot believe that we're expected to swallow that gup. This "trickle down" theory, if believed by anyone, could only be a "Fellow" of the Fraser Institute! The great Canadian born Economist, John Kenneth Galbraith had this to say about the "trickle down theory: - "If you feed enough oats to the horse, some will pass through to feed the sparrows."

Lastly, we're asked to believe that three years from now the government will lower the rate by 2%. This, in fact, is the Campbell/Clark government's main point. They say "keep the tax at 10%" when it isn't that now! What they don't tell you is that whatever the % of the tax, because it is expanded to so many new items, the % means nothing. This tax is based upon the government giving us the straight goods while they've been lying through their teeth for over 10 years.

This tax means that we'll soon be like the UK with a VAT (value added tax) of 17% or higher. And again as the federal raises their share of the HST, the province will accordingly lose "tax room".

There will be short term pain and the pain may be considerable if the HST is rejected but if passed, the long term pain will be forever.



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