Harmonizing the GST and PST

madmax · July 27, 2009

Huge tax grab by the BC government. You will now be paying PST on everything that was exempt before. Buy a new home you will pay PST on the total price plus real estate fees, not just the materials that went into it. PST on every bit of labour and services that were not taxed before. Kids clothes, school supplies, everything you now pay GST on that was PST exempt before.

I feel your pain....Totally agree with you.

benny · July 27, 2009

I feel your pain...

Pain is dealt with in Canada free of charge.

Wilber · July 28, 2009

I feel your pain....Totally agree with you.

You bet, hire a plumber or electrician to fix something in your house. 7% more. Need your car fixed? Cost of labour and the shop's overhead just went up 7%. Same goes for every other service you will be buying. But this is going to be so good for the economy. Give men a break.

Gonna be good for cross border shopping. I'm wondering how Riverwind thinks that taxing the consumer for all the labour and other costs that go into producing his products will make him more competitive or allow him to sell more. Bottom line is, more money goes to the provincial government and less to the customers who buy his stuff, unless of course government is his biggest customer. I'm also wondering how municipalities are going to cope with the increased costs this additional taxation will impose on them. Can you say higher property taxes?

This is about a governments that are desperate for revenue, not about efficiency.

Edited July 28, 2009 by Wilber

benny · July 28, 2009

You bet, hire a plumber or electrician to fix something in your house. 7% more. Need your car fixed? Cost of labour and the shop's overhead just went up 7%. Same goes for every other service you will be buying.

Not so for the government services you will be consuming.

Edited July 28, 2009 by benny

Wilber · July 28, 2009

Not so for the government services you will be consuming.

Sure benny, why don't we just give them everything we earn so they can just dole out what they choose according to their own priorities. Then everything will be free, right? Wait a minute, that was called communism and we all know how well that worked.

What pisses me off most about this is the blatant dishonesty behind it.

benny · July 28, 2009

Sure benny, why don't we just give them everything we earn so they can just dole out what they choose according to their own priorities. Then everything will be free, right? Wait a minute, that was called communism and we all know how well that worked.
What pisses me off most about this is the blatant dishonesty behind it.

Your dishonesty about democracy is blatant.

msj · July 30, 2009

Well, no surprise that I'm in favour of BC going to harmonization.

Sure, it will mean higher taxes on consumption but eventually its going to lead to lower income taxes (once we get out of this recession and things return to normal - granted, that may be a ways off yet).

I think total BC taxes as a % of BC GDP will probably be about the same in 2013 as they are now.

The mix will have changed and people do hate change, eh, Mad Max?

The only thing I don't like about it is the start date of July 1.

I know I will be putting off capital expenditures in my business until that time so that my business will save the 7%. And if I'm doing it then other business people are doing it too.

That part isn't too thought out on Campbell's part, imo. January 1 would have been better.

benny · July 30, 2009

I know I will be putting off capital expenditures in my business until that time so that my business will save the 7%. And if I'm doing it then other business people are doing it too.

Avoid founding economic decision solely on tax considerations.

Riverwind · July 30, 2009

Gonna be good for cross border shopping. I'm wondering how Riverwind thinks that taxing the consumer for all the labour and other costs that go into producing his products will make him more competitive or allow him to sell more.

The HST is a flow through tax and it has no effect on my costs (i.e. paying 7% more to my accountant simply means I deduct 7% more from my HST bill).

In the long run a broad based consumption tax is the best type of tax because it means other taxes, such as income taxes, will be lower. The broad based consumption tax also ensures that everyone contributes something to the government which means everyone has a stake in getting value for taxes paid. Income taxes have become so progressive over the years that a large percentage of the population pays no income tax which means they have no stake.

msj · July 30, 2009

Avoid founding economic decision solely on tax considerations.

Oh, I do.

But if we can make do for another 6 months with what we got we will.

If enough businesses do the same then don't expect capital investment to go up in BC until 2H of 2010.

msj · July 30, 2009

The HST is a flow through tax and it has no effect on my costs (i.e. paying 7% more to my accountant simply means I deduct 7% more from my HST bill).
In the long run a broad based consumption tax is the best type of tax because it means other taxes, such as income taxes, will be lower. The broad based consumption tax also ensures that everyone contributes something to the government which means everyone has a stake in getting value for taxes paid. Income taxes have become so progressive over the years that a large percentage of the population pays no income tax which means they have no stake.

This is well stated.

How quickly people forget just how progressive income tax rates were prior to 2000 when Paul Martin started cutting them (and reinstated bracket inflation indexation).

In BC, we also had high income taxes (sur taxes and everything) until the Liberals got in in 2001 and started cutting them.

It's just a change in the mix of taxes being paid (or, from the government's POV, a change in the mix of taxes being collected).

benny · July 30, 2009

But if we can make do for another 6 months with what we got we will.
If enough businesses do the same then don't expect capital investment to go up in BC until 2H of 2010.

The capital investments our planet need are coming by thanks to all the new taxes on pollutants.

Nat · July 30, 2009

Avoid founding economic decision solely on tax considerations.

My business will do the same it's a 6% savings.

madmax · July 30, 2009

Well, no surprise that I'm in favour of BC going to harmonization.
Sure, it will mean higher taxes The mix will have changed and people do hate change, eh, Mad Max?

I like to get kissed when I am getting screwed.

There are alot of people who will benefit from the Harmonization. But alot more are going to bend over.

madmax · July 30, 2009

My business will do the same it's a 6% savings.

I see hair Salon ownsers jumping up and down.. :angry:

Edited July 30, 2009 by madmax

benny · July 30, 2009

My business will do the same it's a 6% savings.

Gross savings not net savings.

msj · July 30, 2009

I like to get kissed when I am getting screwed.

Yeah, you also like to close your eyes really really tight, too.

IOW, you seem to miss the fact the increases in consumption taxes mean lower income taxes.

Once again - the mix changes but not necessarily the total taxes collected.

benny · July 30, 2009

Yeah, you also like to close your eyes really really tight, too.
IOW, you seem to miss the fact the increases in consumption taxes mean lower income taxes.

Once again - the mix changes but not necessarily the total taxes collected.

Avoid simple arithmetics in time of recession, consumption and production are too strangely disconnected from one another.

madmax · July 30, 2009

Once again - the mix changes but not necessarily the total taxes collected.

Its important to reduce the burden upon those with the ability to pay, and shift the burden upon those who have to pay out of necessity.

Its great that Haircuts, Hortons, shoes and food, will be taxed so that someone making over $100,000 gets that tax break. They have it tough.

Its very important to Harmonize a tax, but for each party involved to extend the catchment area. This is good, so rather then having just PST on the Internet, we pay GST too.

Yes, both governments with their hands in my pocket.

But while I do make very good money, many people don't.

Hey, its just a tax scheme..... its not new or original, and it is being sold by economic dickheads who want to support the Global economy over a local economy. The same economic fools who believe in the Carbon Tax.

Oh, and its revenue neutral too... :rolleyes:

benny · July 30, 2009

Its important to reduce the burden upon those with the ability to pay, and shift the burden upon those who have to pay out of necessity.
Its great that Haircuts, Hortons, shoes and food, will be taxed so that someone making over $100,000 gets that tax break. They have it tough.

Its very important to Harmonize a tax, but for each party involved to extend the catchment area. This is good, so rather then having just PST on the Internet, we pay GST too.

Yes, both governments with their hands in my pocket.

But while I do make very good money, many people don't.

Hey, its just a tax scheme..... its not new or original, and it is being sold by economic dickheads who want to support the Global economy over a local economy. The same economic fools who believe in the Carbon Tax.

Oh, and its revenue neutral too...

Here a crash course for you on fiscal principles:

http://www.mapleleafweb.com/forums//index....showtopic=14436

Riverwind · July 30, 2009

Its important to reduce the burden upon those with the ability to pay, and shift the burden upon those who have to pay out of necessity.

The GST tax credit ensures that people of limited means get a refund for the tax paid. No one can credibly argue that the GST is worse for the poor than income tax.

Its great that Haircuts, Hortons, shoes and food, will be taxed so that someone making over $100,000 gets that tax break. They have it tough.

There is no rational reason for exempting services from sales taxes (they never had to before is not rational).

Hey, its just a tax scheme..... its not new or original

An government needs taxes to function. It makes zero sense to depend entirely on income taxes since punative income taxes hurt the economy more than punative sales taxes. A 12% HST is quite reasonable and should be nothing to complain about.

msj · July 30, 2009

Avoid simple arithmetics in time of recession, consumption and production are too strangely disconnected from one another.

Agreed.

benny · July 30, 2009

Agreed.

At the very least go for calculus, beginning with the Laffer curve.

madmax · July 30, 2009

Here a crash course for you on fiscal principles:
http://www.mapleleafweb.com/forums//index....showtopic=14436

Thanks.....

I did get a kick out of Michael Hardeners Reply....

"So, the tax rate should be voluntary ?"

msj · July 30, 2009

Once again, Riverwind, well stated.

I don't think mad max truly appreciates how annoying it is to a "rich" person such as myself (I'm being sarcastic here).

You see, I have seen BC'ers who make less than about $16,300 in income pay no BC income tax at all.

I see them get $378 in GST credit (i.e. good to pay for $7,560 worth of taxable goods - and keep in mind that residential rent and basic groceries ain't taxable) and up to about $75 in PST credit (good to cover about $1,100 in PST taxable goods). It will be interesting to see what the new HST credit will look like.

Then there have been the income tax reductions in BC.

Since the income tax cuts in 2001 there have been no tax cuts to the highest income bracket (starting at $97,636 in 2008).

The rate is still 14.70%.

The four brackets below that?

They have dropped from 6.05% to 5.06%; 9.15% to 7.70%; 11.70% to 10.50% and 13.70% to 12.29% from 2002 to 2008 (for BC).

Other than an adjustment to the income tax brackets for inflation, the so-called "rich" still pay a marginal tax rate that is over twice what is paid in the first bracket.

But hey, the "rich" are nothing more than whiners who want the "poor" to pay more taxes. :rolleyes:

What will happen is this: the HST tax credit will be expanded so all those "poor" people don't face too much regression.

Meanwhile, the top tax rate may come down a bit (probably years from now if at all).

The other brackets and tax credits will be adjusted favourably for the "poor" and "middle class" taxpayers benefits (also benefiting the "rich" to some extent - after all, the "fat cats" can't make $1 million without having that first $97,636 taxed at the lower rates first!).

The "rich" will continue the whine about paying too much while the "poor" and "middle class" will continue the whine about not getting enough services (since the "poor" really don't pay much, if any net tax) and/or getting squeezed in the middle.

Same as it ever was....