HST Referrandom

[M Speed]

HST Referrandom is around the corner. What would you vote?

quote from 24hours newspaper:
"An independent panel reviewing the HST, PST and GST tax systems found the average family is paying $350 more sales tax under the HST. With the new 10% tax, families will be paying $120 less tax"

This referrendum will cost $12million.

[tonyzoomzoom]

I'm voting to keep the HST.  If the tax is abolished, chances are that the income tax would increase (or our debt) to cover the difference.  Generally speaking, I prefer a consumption-based tax over an income-based tax.

The HST is also a value added HST - more efficient from a business perspective.  This would in theory either lower the price of the end product or businesses making more $$ in the process.  I suspect the final outcome is somewhere in between.

The HST is far from perfect but it makes more sense to me than the PST / GST set up.

[zoomerboomer]

Who's behind and paying for the ads on TV that the HST is good for B.C. lately?

[M Speed]

My say is if they assure it will go down to 10%, I will vote to keep the HST. However, this Liberal government does NOT have a good record on keeping their promises....

As for business being more efficient, will the savings triggle down to consumers? We got shafted twice on the GST cut.....gas, parking, bus fares are just few examples. The corp ate the lowered tax.

[tonyzoomzoom]

I would agree that when the GST was introduced and now the HST, then tendancy is for the businesses to keep prices as they are.  But if the market is truly competitive, the prices should eventually come down (or at least not increase as fast).

[dirtychoncho]

Still waiting for prices to come down on goods since the canadian dollar is so high......oh yeah it hasn't happened! Same goes for thinking HST savings will be passed onto consumers.

[Username]

^ Prices are not solely affected by tax rebates for corporations.

Rising fuel costs have affected basically everything available on the market.

  Kev

[theurgy]

Rising fuel costs have only really been an issue for the past 4 years. GST has been around for how long?
It's hard for us to comprehend not having a GST due to our age.
I think the idea of thinking that companies and corporations will lower prices and pass on the operations savings down to the consumer is seriously naive optimistic thought. Any chance to make a profit, is a chance a company will take. It's no immediate impact to the consumer and the blame is shifted over to the government on the part of the consumer anyhow.
Given the logic of trickle down, prices to everything should technically not change to anything.
Ask yourself if you honestly think that companies will pass these savings onto their consumers or use it as a padding because of a failing economy.

[Username]

Rising fuel costs have only really been an issue for the past 4 years. GST has been around for how long?
It's hard for us to comprehend not having a GST due to our age.
I think the idea of thinking that companies and corporations will lower prices and pass on the operations savings down to the consumer is seriously naive optimistic thought. Any chance to make a profit, is a chance a company will take. It's no immediate impact to the consumer and the blame is shifted over to the government on the part of the consumer anyhow.
Given the logic of trickle down, prices to everything should technically not change to anything.
Ask yourself if you honestly think that companies will pass these savings onto their consumers or use it as a padding because of a failing economy.

Mike, I was talking about rising fuel costs in reference to the implementation of HST. If you don't know, an argument in favour of the HST is that corporations are able to claim a larger input tax credit on purchases to go against the HST they have collected in a period.

As for whether a corporation will pass on their savings to customers, that's an incredibly one-sided view of the situation. That being said, if your competitor is cutting costs as a result of their cost savings, you will likely follow suit or you won't be in business much longer. Perhaps if you were in a monopoly or oliogoply you could fix your pricing and pocket the savings.

The other side of the argument that many people fail to consider is that a business could go out and make greater expenditures as a result of those savings? That money gets reinvested into our economy and stimulates business growth. Whether it's capital expenditures or corporate lunches, there is an effect that trickles down through the economy when a business is doing well.

How about foreign investment? What if Joe Blow corporate giant wants to expand their operation to Canada. If we don't have a competitive tax structure, BC will NOT be in the picture when it comes to landing that investment. Foreign investment creates jobs, increases spending and could benefit the companies you and I work at. A company wants to do a software upgrade? The people who got a job there want to buy a new car? The implications are endless. However, if we retain the dated and abhorrent PST tax structure you can kiss those potential benefits goodbye.

At the end of the day, when I listen to someone rant about the HST I see someone who is looking at short-term losses and fails to see the big picture. And furthermore, when I ask a proponent of the PST structure WHY we should keep the PST they are left speechless. What is beneficial about the PST tax structure? Exemptions on specific items? I'm going to offend some people here, but why should your diapers be exempt? Your bicycle? Your insulation? You made the decision to have a baby, ride your bike or build a house. You want to consume, you pay a tax. You don't want to pay that much tax, don't consume. You should understand the costs associated with your decisions. Why should a business subsidize the cost of your diapers? Or your insulation? I don't get it. Because ABC giant corporation makes so much money? What about XYZ small business owner who is working 12-14 hours a day to survive? Why should that guy subsidize your diapers, insulation or bike purchase? Opening a business is not an automatic guarantee of success and mass profits. Especially in a weak economy. Something the HST is trying to stimulate.

I could go on and & on. Inevitably, I think back to tax class 10 years ago, wondering why we have two sets of tax structures to learn. Even in my working career, the PST has been a nightmare to administer and remit. I couldn't have been happier to hear that we had gone to an HST structure and it frustrates me to no end that a group of uneducated people are fighting this. I'm sorry, but this is a fight driven by ignorance, not by knowledge.

All professional bodies associated with administering these taxes have spoken out in favour of the HST and are rallying to fight the ignorance plagued in this referendum:

CGA-BC

The Association came out in favour of the HST last summer and recognizes that the tax will have a positive effect on business and investment in the province.  We're looking at the long-term net good to the province—as consumers, as small business owners, as exporters to foreign markets, as British Columbians

Chartered Accountants of British Columbia

To that end, the ICABC has aligned with the Smart Tax Alliance to advocate for the benefits of the HST. If voters choose to reject the HST in the upcoming referendum and the tax is rescinded, our province will be placed at an immediate competitive disadvantage. In addition, BC will face escalating costs, as the government struggles to reinstate the provincial sales tax system and repay the federal government.

My society, CMA-BC, has also been strongly advocating the HST, aligning with Smart Tax Alliance (STA) and advocating members to activate against the "Fight HST" campaign.

Seriously people, vote if you actually have some knowledge on the issue. Don't vote if you haven't taken the time to educate yourself on both sides of the argument.

Bah, it's 2:30am, and this is a really touchy subject for me. And Mike, my post isn't directed at you per se. Just had to get it all off my chest.

  Kev

[zoomerboomer]

So Kev, long story short, the HST is better than a separate GST & PST, correct?  Who is the Smart Tax Alliance (STA) and where's the money coming from for their TV ads?  I'm always curious about who really is funding and backing a position with testimonials when they promote a position and what is their vested interest.

[banjaboy]

I'm in favor of HST, its a consumption tax rather than income based. Unfortunately business will not reduce costs to us to reflect their savings. Business is notorious for quickly rasing prices but very reluctant to decrease them. I just hope they spend their newfound savings on infrastructure in their businesses and thereby increase employment.Time will tell, remember folks, its supposed to be Revenue neutral...

[Username]

So Kev, long story short, the HST is better than a separate GST & PST, correct?  Who is the Smart Tax Alliance (STA) and where's the money coming from for their TV ads?  I'm always curious about who really is funding and backing a position with testimonials when they promote a position and what is their vested interest.

I haven't done much research on Smart-Tax-Alliance however I suspect it's a coalition of merchants, chamber of commerces & professional bodies assembled to educate the general public on the merits of the HST tax structure.

  Kev

[M Speed]

^wow you slept at 3am and got up at 11am....

Great info Kev and you are damn right we should educate ourselves in order to make the decision on YES/NO on this referendum. However as touchy as this subject to you or others, it is a great place to lay out the info ahead of the referendum and let people decide.  

As for the price, many business are colluded in their pricing. Gas is a prime example.

being the devil's advocate,

if HST is all so good, why 4 provinces (lets leave out Alberta as they got $$) not doing HST?
if the Liberal gov't didn't lie about the HST and got the Federal grant, will BC still face disadvantage?
are those accounting professional groups in flavor of the HST because of the streamlined efficiency? and the nightmare of reinstating PST?

And from the reading I read, the food industry is suffering with the HST and now raised minimum wages. So is there a positive side for that industry with the HST?

[tonyzoomzoom]

All else being equal, the HST will shift the tax burden from business to the consumer; but the hope is that the HST will attact more business activity and stimulate the economy.  In the process, the burden is spread over a much larger tax base.

[banjaboy]

At the end of the day there is only one taxpayer, you and me.

[zoomerboomer]

At the end of the day there is only one taxpayer, you and me.

And I don't think you are paying so I'm the one that's paying!   

[tonyzoomzoom]

better you than me then   

[perfecto]

Let's not forget that if we say "no" that, as a province, we owe the Feds around 1.5 billion dollars...

[DKaz]

I am pro HST.

[oracle]

I am pro HST.

me too. at 10%