A burden we all need to carry.
Right now there is an uproar over the provincial government’s plan to introduce HST. The plan is to harmonize provincial sales tax with GST bringing PST into a whole bunch of industries (restaurants, grocery stores among others) which had up to this point avoided them.
Business points to this new tax and scream about layoffs and jacked up consumer prices.
The NDP is rallying signatures. Editorials are lamblasting the Premier. People are griping to each other about how a) stupid and b) unfair the whole tax is.
What gets me about all of this is the seeming disconnect people have about why the HST is being introduced int he first place.
Taxes, as any political strategist (or person on the street for that matter) can tell you, aren’t popular. Why do governments bring them in? Because they can’t afford to supply the existing level of services (read education, health care, transportation infrastructure, etc) without a larger source of revenue.
Right now, BC, like the rest of the world, is in the midst of a recession. Profits are down, people are making less money and spending less of it. That means all sorts of traditional government taxes aren’t generating income like they used to. Yet at the same time, there aren’t fewer people going to the doctor (like is probably the case in the US’s privatized system) nor fewer people riding transit or going to school.
Canada and British Columbia have a terrific education system, and despite a lot of griping about hospital lines and other medical headaches, one of the best health care systems in the world. I don’t know about you, but I want to keep it that way and (ideally) continue to improve it. You don’t do that with less money – you do it with more money.
So when the provincial government looks at the balance sheet at the end of the fiscal year, they’re in an unpleasant conundrum: Keep services the same and yet somehow do so with withering profits. How can they do this? This simple answer is they can’t – at least not without figuring out a new revenue source.
Enter the HST.
While unpleasant, this new tax will go a long way to adding billions of dollars to the budget. In the end that will mean fewer cuts to the core services we all value. And that’s a good thing.
Did you enjoy this post?
May we also suggest:
Libraries, Literacy, and Community Literacy, both reading-and-writing and community literacy, are critical components of a strong community. Informed discussion, enlightened imagination, and literal comprehension … Continue reading →...
Your Saturday Photo While going to school I would often take a ferry ride over to the island. It was a tranquil experience … Continue reading →...
Nice post, Kurt.
Can you show some data on how the HST is going to subsidize Health Care, Education and Social Services? Thanks so much.
- JCH
How about enacting a progressive income tax increase instead of a flat consumption tax?
I admire your courage in posting this and appreciate your point of view, well done Kurt!
Campbell speaks to the amount of money it’ll generate and where that money will go.
For the record, he does mention health and education gross numbers, but doesn’t get into specifics: http://www.facebook.com/video/video.php?v=254838395531
Great Post, Kurt and lots of food for thought. A couple of things however which I think also need mentioning. The HST aleviates the tax burden from businesses and passes them on the consumer with the idea that this will actually drive prices down as businesses are able to do more for less. I personally find this hard to believe. While there is evidence that this may have ocurred in Atlantic Canada following the introduction of the HST, there are plenty of other factors which could contribute to lowered prices. I’m no economist, but this is what i’ve read, anyway. I’m not against taxes to pay for essential service, but your evidence that the HST will do so comes straight from the horse’s mouth, ie. Gordon Campbell, who’s to say a lot of this HST won’t go towards paying down the recent deficit? To me, HST seems like an economic stimulus plan which is pro business and doesn’t take into account the burden it will place on BC’ers, while the evidence that it will ultimately benefit the consumer is doubtful.
“Consumers would pay an extra $1.9 billion a year –- with all that money going to big business. Not a dime of the HST will pay for healthcare, education or social services.” So that’s from a non-Campbell-video source, Thetyee.ca. We can only wait and see on that front.
Let’s see what’s happening in non-hippie-worlds, though.
In terms of businesses (as Godfrey outlined), Mark von Schellwitz of the Canadian Restaurant and Food Service Association represents a pretty upset group of stakeholders. Check it out here: http://www.vancouversun.com/business/hard+restaurants+swallow/1863620/story.html. Among other things, they don’t know where the money is going, but they do know that it’s going to hurt their business. Not sure your explanation helps Mark feel better, my friend.
And here is a great quote, again, from the non-hippie, moderate, open-minded Vancouver Sun editorial section, outlining that no one knows what the money is going to be spent on:
“[Finance Minister] Colin Hansen says the government hasn’t decided how to use the $1.6 billion B.C. will receive, but the government will offer a refundable HST credit to low-income British Columbians. That still leaves most people paying seven per cent more for a wide range of services with what is so far an inadequate explanation of why the new tax is needed.” (My favourite thing about the HST is that the “Green Premier” is going to include bikes, hybrid cars and local organic food in the harmony – that’s more ironic than a province simultaneously offering a carbon tax of its citizens and being one of the biggest exporters of coal to China!)
In a cool turn of events, Kurt Buddy, you may or may not have had your idea discovered by the R&D department of the Vancouver Sun (they have one guy, and his name is Tony). Today they Ripped-off & Duplicated your blueprint on how to sell the HST to the public: http://www.vancouversun.com/business/blueprint+sell+public/1911657/story.html. Actually, Mark Marissen has data and a actionable items, so his blueprint stands up a little better – no offense. You got the jump on him, though!
I know you work with and for politicians, but are you really telling me that I should take them at their word about the HST or anything else? As a historian, you know there’s far too much evidence to back up an un-attackable counterargument to such wishful thinking. Even Bill Clinton, who will soon endorse The Gumboot, lied like a rug. In conclusion, do we, as you say, “Get What We Pay For”? Well, you might’ve jumped the gun on such a proclamation, hombre…
I’m anticipating a post over on citycaucus.com entitled something like “Top Vision Aide Advocates Raising Taxes”. Seriously though, the following was also interesting, and vaguely relevant:
http://www.theglobeandmail.com/news/politics/broadbents-bold-ndp-advice/article1252686/