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Sunday, September 20, 2009

Harmonized Sales Tax

The Harmonized Sales Tax (HST) will apply to more than twice as many things (by value) than are taxed by the provincial sales tax (PST) shifting more of the tax burden onto the average working person. This seems to have been the pattern established by the Liberal Government of BC since coming to power in 2001. Those that will benefit from the implementation of the HST will be the large corporate interests ie., big business.

The proposed HST sales tax will apply to all goods and services that the GST currently applies to as well as the many items that were not subject to PST. All goods and services currently covered only by the 5% GST will now be taxable at the rate of 12 percent. For example the tax on the food and beverages in the restaurants will go up from 5 to 12 percent.

Sure there are tax rebates and credits thrown into the mix; the Basic Personal Tax Exemption will rise to $11,000.00 from $9373.00 and individuals making under $20,000.00 and families under $25,000.00 will qualify for an annual BC HST rebate of $230.00. Approximately 15% of people will qualify for the rebate with the other 85% unable to. What the government doesn’t tell you is that with the number of new items being taxed the average person and family, even those who qualify for the rebate, will be taxed at a far higher rate than either of the above will compensate for.

GOODS: Residential fuels (electricity, natural gas) and heating; Basic cable TV and residential phones; All food products (only basic groceries will remain exempt under new tax); Non-prescription medication; Vitamins and dietary supplements; Bicycles; School supplies (books will continue to be exempt); Magazines and newspapers; Work-related safety equipment; Safety helmets, life jackets, first-aid kits; Smoke detectors and fire extinguishers; and Energy conservation equipment (e.g., insulation, solar power equipment).
SERVICES: Personal services such as hair care; Dry cleaning; Repair services for household appliances; Household maintenance such as renovations and painting; Real estate fees; Membership fees for health clubs; Movie and theatre tickets; Funeral services; Professional services such as accounting and home care; and Airline fares within Canada.
Personally I estimate my pocket book to be hit by another 1500 – 3000 dollars a year. Is the HST really a benefit to lower income wage earners? Why would the government implement the HST if they aren’t planning to increase their revenues?

Yes small business gets a harmonization and an elimination of the PST, but they, their family members and their staff all get hit when purchasing items newly covered under the HST. The government says many products will go down in price because businesses will receive a 12% tax credit for the HST they pay. Will they really? If the owners and their families are paying higher taxes on personal purchases the business will then have to make an even larger profit.

My distaste for the HST rises as the government try’s to propagandize the implementation of the tax as a benefit to lower income individuals. The bottom line is everyone will pay more even the poor.

Finally I say Gordon Cambell


1 comment:

Jay from Vancouver said...

I'm a bit disappointed that the tax will go to support the big business. I'm sure small business would have much better use of the money, if it was redistributed in their favour. But that's not really the case here.

For example landlords. The government has been screaming for years that there are next to no affordable flats for rent in Vancouver, but yet the landlord will be hit badly by the increased tax, since they are the consumers in this case.