Harmonizing the GST and PST

[robert_viera]

Where do you get the idea that more taxes on businesses means more taxes paid by those 'evil' rich people? Businesses that pay less tax are able to charge less for their products and hire more people as their business expands.

So we're supposed to absorb this tax increase as consumers and employees and rely on the goodwill and generosity of the business owner? Sounds like the business owners would have the choice whether or not to pass-on their tax cut or keep it all for themselves, but the consumers won't have the choice whether to pay the increased tax.

Edited March 28, 2009 by robert_viera

[Riverwind]

So we're supposed to absorb this tax increase as consumers and employees and rely on the goodwill and generosity of the business owner? Sounds like the business owners would have the choice whether or not to pass-on their tax cut or keep it all for themselves, but the consumers won't have the choice whether to pay the increased tax.

We never depend on the 'generosity' of businesses to lower prices. Businesses always charge as much as they can get away with no matter what the government does. It is competition that forces businesses to lower prices and in a recession when consumers are feeling extremely stingy the businesses will have no choice but to lower their prices as much as possible.

Earlier in this thread I posted the inflation figures for the years around 1991 when the GST was introduced. In the year after the introduction of the GST inflation went from from 6% to 1.5%! This huge drop in inflation occurred even though the GST added 7% to a wide range of goods and services that were never taxed before. Your fears that business owners would 'keep the savings for themselves' has no basis in fact.

[mikedavid00]

If "tax competitiveness" means a race to the bottom where businesses pays less and less tax and individuals pay more and more, I wouldn't be too disappointed if Canada wasn't the most competitive.

THANK YOU.

People need to clearly understand that this is a large, large tax increase and your household will be about $1,000-$2,000 a year depending on your spending and income. Break that down monthly and that's how much is out of our pockets. Could be $50-$200 depending on income. Daycare will go up too.. afterschool programs.. utilities.. house purchases, you name it. Any service you name it. This will be a MONTHLY expense for all of us. Not yearly or occasionally.

When you get kitchen cabinets installed, you pay GST only. That was always an incentive to have another private business order and install your cabinets. This way you do NOT pay PST on the actual cabinets themselves. After this goes through, you will pay BOTH taxes and will cause people to go underground to evade taxes. Business owners were calling up the radio station one after the other furious.

Our home cutting out resturuants and vacations just hurts ourselves even more. He just doensn't get it.

The beer 'Lakeport' I get is brewed RIGHT HERE ON ONTARIO. Now I have to give that up to make up for this nonsense?

The answer is to lower corporate taxes, lower all business taxes, and then make the civil service smaller. When gov't spends the money mostly goes into civil servant pockets and new needless job creation and make work projects. I have countless friends who work in the public sector. They pretty much 'laugh' at their own jobs fully guilty of the fact they are 'cheating' their way through life. Teachers are a bit different.. but man.. you threaten to give them 'more' class time or take a week away of their 4 month vacation/sick time and OMG!!! They become beasts!!

There is a very, very small percent of people who are happy about this. Those are 3 people in a cubical out of a whole building who now have to do a bit less paper work. McGuinty never asked the public about this through a referendum at all. He never consulted us, he just popped this on us. This would never, ever be possible in the US. You would have to pass a proposition that the public votes on for state tax reform.

This is a huge blow to families all over Ontario while I'm sitting here, recently unemployed writing this. And also while there will be an estimated 500 people wandering out of pearson airport today that will need medical and social services that we do NOT have jobs for as they re-unify with their family and cannot speak English and are not here to work but rather buy a house with their life savings and use public benefits. This is how the Liberals have historically kept there seats.

We have serious problems in Canada and can no longer continue our legacy way of doing things. We need full changes starting soon.

[Riverwind]

People need to clearly understand that this is a large, large tax increase and your household will be about $1,000-$2,000 a year depending on your spending and income.

Lower income households will get an increased GST rebate. Prices on many goods *will* come down as businesses desperate for customers pass on savings. The data from 1991 when the GST was introduced supports this claim. In the long term the economy will be better off and more people will be employeed.

[madmax]

Lower income households will get an increased GST rebate. Prices on many goods *will* come down as businesses desperate for customers pass on savings. The data from 1991 when the GST was introduced supports this claim. In the long term the economy will be better off and more people will be employeed.

You will be drafting up a new data 10 years from now. It sure as hell isn't going to back up the data of the past. The budget is a piece of shit.

It is reckless to confuse a national GST tax grab with a Provincial Harmonization Tax Grab.

The intent of the GST was to make manufacturing more competitive and put the burden upon consumers. A tax was moved from industry to services.

This is just the Provincial Governments way of expanding their tax base while Industries flee the Province and hundreds of thousands of people are thrown out of work.

Regardless, this retarded idea is not taking effect until next year. There isn't even any details available on how this merger of the tax is supposed to work.

What I do know, is that if all goes well, the Ontario Liberals will know how the 1993 Progressive Conservatives felt after 2 majority terms, and taking people to the cleaners with Higher Taxes and Record Breaking Deficits, that are 50% higher then the horrors of Bob Rae.

[madmax]

The beer 'Lakeport' I get is brewed RIGHT HERE ON ONTARIO. Now I have to give that up to make up for this nonsense?

No, you need to drink more of it Use that $1,000 installment to buy your precious Lakeport.

Infact.... a wiseman told me this.

If we received that $1,000 last year and invested it in Nortel, we would have $14 today.

If we took that $1,000 last year and invested it in cases of Lakeport, and drank all the beer with your friends. You could return the empties and have $57.

It's not often that Mikedavid00 and I agree on something, but what I will say, is that MikeDavid00 sounds like alot of people I am bumping into in the coffeeshops and they are not buying into the Liberal Salespitch/

[Riverwind]

You will be drafting up a new data 10 years from now. It sure as hell isn't going to back up the data of the past.

Yes of course. Your mind is made up and the facts don't matter. Fortunately, most people aren't like you.

It is reckless to confuse a national GST tax grab with a Provincial Harmonization Tax Grab.

What? You go to be kidding. It is EXACTLY the same. In fact, the HST is probably less of a hit for consumers because it replaces the existing PST.

The intent of the GST was to make manufacturing more competitive and put the burden upon consumers. A tax was moved from industry to services.

The HST does EXACTLY the same thing by reducing red tape for companies and allowing them rebates for PST.

This is just the Provincial Governments way of expanding their tax base while Industries flee the Province and hundreds of thousands of people are thrown out of work.

It will save jobs and will put pressure on provinces like BC to follow suit. Edited March 28, 2009 by Riverwind

[mikedavid00]

The intent of the GST was to make manufacturing more competitive and put the burden upon consumers.

And that worked really well didn't it. Lol..

[Wild Bill]

Yes of course. Your mind is made up and the facts don't matter. Fortunately, most people aren't like you.

What? You go to be kidding. It is EXACTLY the same. In fact, the HST is probably less of a hit for consumers because it replaces the existing PST.

The HST does EXACTLY the same thing by reducing red tape for companies and allowing them rebates for PST.

It will save jobs and will put pressure on provinces like BC to follow suit.

Perhaps you are not arguing the same point as others here. I would agree that a harmonized sales tax would be an improvement for business. I also had agreed that the GST was a better system over the long haul than the old 13% manufacturers tax.

That's not really the question here. The political perception by the public of McGuinty's move is what is important. The GST is still reviled across most of the electorate, since it's very honesty in being clearly posted and not hidden like its predecessor was a constant reminder to the consumer every time he bought anything. Now the HST will do the same thing.

The average voter is not an accountant, just as he's not likely to be a political junky. I think that Dalton has made a huge mistake that will come back to haunt him next election, especially when people realize that they are not getting a $1000 rebate UNLESS they make $160,000 a year! The inference when this info was released was that anyone making LESS than that figure would get $1000. When most people making $40-$60K find out they will be getting less than $300 as their share of the bribe there will be little sense that the 'spoonful of honey' was large enough to make the increased tax burden easy to swallow, especially when the heating season starts.

This is going to prove very interesting. Hopefully the provincial Tories won't continue to screw up even the easy chances.

[Riverwind]

That's not really the question here. The political perception by the public of McGuinty's move is what is important. The GST is still reviled across most of the electorate, since it's very honesty in being clearly posted and not hidden like its predecessor was a constant reminder to the consumer every time he bought anything. Now the HST will do the same thing.

I hate hidden taxes. I accept that taxes are necessary but I think everyone should know that they are paying. It makes them less likely to take things for granted.

[Wild Bill]

I hate hidden taxes. I accept that taxes are necessary but I think everyone should know that they are paying. It makes them less likely to take things for granted.

Ah but RW, you are a rational fellow. Most citizens are not!

Politics is the art of perception, not reality. People aren't going to change their ways. There is a technical term for those who enter politics and expect people to be rational about what choices they support.

The term is 'loser'.

[madmax]

It will save jobs and will put pressure on provinces like BC to follow suit.

The Harmonization of the Sales tax won't save one damn job. !!!

[madmax]

Yes of course. Your mind is made up and the facts don't matter. Fortunately, most people aren't like you.

My mind is made up on this. It is a tax grab by a government in need of extra revenue.

What? You go to be kidding. It is EXACTLY the same. In fact, the HST is probably less of a hit for consumers because it replaces the existing PST.

The Ontario Government is simply expanding their catchment areas, and using the GST as the means to do so.

The HST does EXACTLY the same thing by reducing red tape for companies and allowing them rebates for PST.

I have spoke with many small businesses and their opinion is mixed. Especially as they have yet to see any details. Most businesses dealing with one another are PST exempt. Will there be less paperwork? Possibly. But I just did the rounds this weekend, and few people are jumping up and down for joy. But they are hopping mad, or visibly upset with the government.

It will save jobs and will put pressure on provinces like BC to follow suit.

I jumped on that early

[Riverwind]

The Ontario Government is simply expanding their catchment areas, and using the GST as the means to do so.

Large businesses and economics have been recommending this move for a long time. This the primary reason. The additional revenue is an added incentive. They would have never done it if the revenue went down. I find this complaining quite rediculous. The government needs the money and they are going to get it from you one way or another. Why not favor a system which is simpler to administer?

Most businesses dealing with one another are PST exempt. Will there be less paperwork? Possibly.

With the PST a company buying the stuff has to make sure that all employees authorized to purchase company inputs remember to give out the PST number. They can't trust all of their employees because their PST exemption could be abused. If someone forgets or a non-authorized employee needed to purchase something there is a special process required to recover the PST or they just pay it and swallow the cost. With the HST they simply record the amount paid and deduct it from the check they send the government.

With the PST a company selling stuff has to keep track of the PST numbers for all of their customers and calculate taxes differently depending on whether they have the number. They have to collect exception declaration forms with signatures and verify ID. They face liability if they provide exemptions without following the process. With the HST the company does not care who their customer is. They charge everyone the same tax.

All of the procedures listed on this page go away entirely:

http://www.rev.gov.on.ca/english/guides/rst/204.html

Read that and explain to me why red tape is not reduced significantly.

Businesses dealing with a small number of suppliers/business customers will be less affected by the change. However, any business owner who does not realize the paper work savings has not really thought enough about it.

Edited March 30, 2009 by Riverwind

[Riverwind]

All of the procedures listed on this page go away entirely:http://www.rev.gov.on.ca/english/guides/rst/204.html

It just occurred to me that the existing PST makes business owners legally responsible for catching customers seeking to defraud the tax system. With the HST it is purely the government's responsibility to catching cheats. On its own, this change is more than enough to justify the switch. Edited March 30, 2009 by Riverwind

[msj]

It just occurred to me that the existing PST makes business owners legally responsible for catching customers seeking to defraud the tax system. With the HST it purely the government's responsibility to catching cheats. On its own, this change is more than enough to justify the change.

If my company buys something from your company and I claim an ITC on my next GST return but I don't bother to validate your GST number at the registry, then my company is SOL and can't claim the ITC if your GST number is, in fact, bogus (well, I can claim the ITC and may get away with it, but if the CRA finds it in an audit then my company would be SOL).

So, yes, honest businesses do get caught up with dishonest people and lose out on their GST ITC's.

Nevertheless, I would be more than happy to have a harmonized sales tax in BC.

PST is a terrible tax with terrible rules and GST kicks its ass as being relatively simple to administer (with some exceptions like real property and certain grey areas surrounding exempt supplies).

Edited March 31, 2009 by msj

[madmax]

I do not support the Province putting an 8% tax on fuel.

[Riverwind]

I do not support the Province putting an 8% tax on fuel.

Why? The oil price collapse has taken way more than that off the price. Businesses (i.e. truckers) will be able to get a refund for that amount. If it reduces the total deficit/debt then will cost people less in the long run.

One thing that people forget is McGinty could have taken the easy way and did nothing and simply run a larger deficit. If he had done that no one would have complained. Yet he decided to put through a measure that will result in some increases in taxes that are hardly enough to offset the public anger. The only rational conclusion for such actions is that McGinty (as do many economists, business leaders) truely believes that the move will help the province economically.

[msj]

One thing that people forget is McGinty could have taken the easy way and did nothing and simply run a larger deficit. If he had done that no one would have complained. Yet he decided to put through a measure that will result in some increases in taxes that are hardly enough to offset the public anger. The only rational conclusion for such actions is that McGinty (as do many economists, business leaders) truely believes that the move will help the province economically.

Or he could have raised other taxes.

I'd gladly take a tax increase in BC with harmonization of the PST/GST over an income tax increase and/or spending cuts to health/education/social services.

[Wild Bill]

One thing that people forget is McGinty could have taken the easy way and did nothing and simply run a larger deficit. If he had done that no one would have complained. Yet he decided to put through a measure that will result in some increases in taxes that are hardly enough to offset the public anger. The only rational conclusion for such actions is that McGinty (as do many economists, business leaders) truely believes that the move will help the province economically.

Or perhaps, he could have cut spending? Or looked for inefficiencies?

Oops, sorry! That last one was silly. Everyone knows there ARE NO inefficiences in governments!

[madmax]

Why? The oil price collapse has taken way more than that off the price.

The current price of oil, has done little to change the price at the pumps. If the price at the pump reflected the current trading value of oil, it would be around 15 to 20cents lower per litre, yet.

Regardless, if the 8% tax on fuel is a tax grab. It is an unjustifyable tax grab of Joe Clark Proportions. Actually it is closer to 4X the increase that Joe Clark prescribed in 1979.

A tax ripoff is a tax ripoff.

I also disagree with the 8% tax on books for the blind.

The government is in stealing mode.

[madmax]

One thing that people forget is McGinty could have taken the easy way and did nothing and simply run a larger deficit.

McGuinty has done JACK SQUAT since coming into government. Coming up with a massive tax grab is not governing. It is desperation.

In the meantime, he is already proposing an $14Billion dollar deficit. This jerk has been as useless as his federal counterparts in understanding the Ontario Economy.

The only rational conclusion for such actions is that McGinty (as do many economists, business leaders) truely believes that the move will help the province economically.

The same economists who have steered entire nations into massive deficits, massive job losses, massive corruption and deregulation?

These economists don't know jack shit!!!

A monkey can come up with consumer tax.

I have now done the rounds with lots of construction and small businesses.

They do not share your enthusiasm.

I know what is taught in Universities. Unfortuneately the real world never seems to fit the economic models that Economists say are "Good For Us".

The real facts are.... Wages have dropped $14,000 in one year, while Public sector wages and spending is rising.

Income Tax revenue declines with lower levels of income. In the meantime those who are the wealthiest and most able to pay, desire large income tax cuts in order to horde their monies, and keep it out of government hands.

Therefore taxing the consumer is just another way for the government to get their hands into everyones pocket. And they are also going to get their hands into the most vulnerable.

Those on fixed incomes.

Bravo !

You want to put Grandma out of her home.

[Nat]

I wish the BC government would wake up and harmonize the GST & PST. As a bookkeeper I can tell you the hardest part of my job is dealing with the PST and understanding the rules. One of the reasons I won't vote for Gordon Campbell's Liberals is they promised to get rid of rules and red tape but with the PST they've only managed to make it worse!

[ironstone]

Whether or not harmonizing the PST and GST will be beneficial to Ontario remains to be seen.Even if the extra taxes are wildly unpopular it makes no difference.Dalton McGuinty can do whatever he wants since he has a strong majority.I have absolutely no use for this man who can look straight into the eye of the camera and lie through his teeth.He'll get another easy majority next time from the 905 region who blindly vote Liberal no matter what.

[Chuck U. Farlie]

Whether or not harmonizing the PST and GST will be beneficial to Ontario remains to be seen.Even if the extra taxes are wildly unpopular it makes no difference.Dalton McGuinty can do whatever he wants since he has a strong majority.I have absolutely no use for this man who can look straight into the eye of the camera and lie through his teeth.He'll get another easy majority next time from the 905 region who blindly vote Liberal no matter what.

Do the 905 blindly vote liberal? I thought that was the 416?

I know that my riding - Cooksville, which is in the 905 - is strongly Liberal with Peter Fonseca as the MPP, but that is partially because the conservatives don't run very strong candidates here. During the last Fed election, for example, the Cons ran a TV personality who was rejected as a Liberal. In every way the Liberal incumbent was the best choice for a local rep, but I voted Con instead despite the weak candidate.