Archive for the ‘HST in BC’ Category

1
Jun

Why We Need The HST in BC!

   Posted by: Phil Tags: , ,

GST/PST vs HST

On July 22, 2011 we will know if British Columbians decide to keep the HST or reinstate the GST/PST. I do hope that we see the long term benefit of a single consumer based tax and say No to the referendum question.

Hate the way the tax was introduced but don’t hate the tax.

No one likes taxes; however, a government itself does not generate any revenues. It takes from its people to support its spending habits. The citizens look to the government to provide services in exchange for sending hard earned money to them.

We, as Canadian and British Columbians, pay taxes to support free health care, free public education and many other services. Governments need taxes to support these spending habits. Any drop in income will reduce services unless they borrow money, which is not a good idea.

While people may think that companies are getting a break here they are wrong. Do you think that companies ‘eat’ profit to pay their taxes? No they pass along that cost to the consumer. Companies can either raise prices to generate more revenue (easier in a monopoly situation) or reduce costs (more likely in a competitive situation), so I think that any discussion around this is a mute point. End consumers pay ALL the taxes in some form.

What really has me worried is as baby boomers retire there will be less income tax collected. They won’t be working but they will be spending more on leisure activities. They will have an income but it will be less.

So how do we make up for the short fall? Reduce services? I don’t think the people would like this as we struggle funding schools and hospitals now.

A consumer tax makes sense. These Baby Boomer will have some income but it will be less as they need less. They will; however, continue to be consumers … with a lot more dispoable income too!

Can the government do things to make the HST a better tax? Yes. Dropping it as they have really does smack of vote buying but it is now less that the GST (5%) and the PST (7%) combined. It could even reduce or remove other taxes (i.e. the Property Transfer Tax) to simplify all tax reporting.

Thinking about it, Income Taxes are the worst way to fund services. If you were able to keep every dollar you earned and were only taxed as you spent it, wouldn’t that be nice. No disclosure to the government, no annual filing, no need to keep detailed records (for 7 years) … imagine.