Flaherty says HST is GOOD

[madmax]

http://www.google.com/hostednews/canadianp...Iwtxh9QOUBfCTKw

.... Ontario's Progressive Conservative leader said the TD report shows the harmonized sales tax is bad news for consumers.

"TD Economics shows the 'Dalton Sales Tax' is just that - a permanent tax grab that will result in higher prices on the things we buy with no immediate benefit to consumers despite the premier's promises," Tim Hudak said in a statement.

Conservatives... you have some splaining to do....

Flaherty is providing $4.3 billion to Ontario and $1.6 billion to B.C. to make the change

[Topaz]

Here's another explanation for it too . http://www.thestar.com/article/684230

[madmax]

Here's another explanation for it too . http://www.thestar.com/article/684230

Wow.... What a load of horse manure. I have yet to speak with a local manufacturer who suggests this is going to make a hill of beans difference to their operations.

The savings in their industry would be virtually insignificant, as any major savings occurred when the GST was implemented and removed the "hidden" tax of the MST.

Kiss your manufacturing goodbye, meanwhile watch the federal and provincial governments increase your taxes.

[Riverwind]

Conservatives... you have some splaining to do....

the report issued Friday that the increase in taxes paid by consumers on goods and services will boost the consumer price index in those two provinces by 0.7 per cent

0.7%? Big friggen deal. Get over it. The report demonstrates that the switch will be close to price neutral. It is unreasonable and impossible to make a change like this without having a small effect on prices.

The PST as it stand right now with its blanket exemption for services is a bad tax. It should be expanded to include services even if it increases costs slightlly. Any extra revenue for the government means it has to borrow less which is good for everyone in the long term.

It is also a huge waste of money maintaining a seperate provincial department collecting the PST. BC stands to save $200 million/year by eliminating the PST bureaucracy. I can't understand why anyone would be against eliminating government bureaucracy.

The end of the world did not come when the GST was introduced nor did it end when the PST was originally introduced. Businesses and prices will adjust and things will carry on as before but we will end up with a more efficient tax system. This is a good thing.

Edited September 21, 2009 by Riverwind

[Topaz]

IF this is such a good deal as Flaherty says, then why hasn't Alberta and Saskatchewan embraced???

[Hydraboss]

Alberta's still pissed about the GST ("I will get rid of the GST!!!!" - "I never said that!").

Harmonization is great if you're a business or a tax-collecting government. It simply increases revenues for both, while the consumer takes it in the ...

Think how much easier it will be to sneak a tax increase in. If any government tried to raise one tax and then raise the other right away, they'd be done for. This way, one increase is actually two and the public only gets to get mad once.

Sneaky.

[Riverwind]

IF this is such a good deal as Flaherty says, then why hasn't Alberta and Saskatchewan embraced???

In Alberta, they have no PST. No tax is always better than a tax. But if a tax is necessary the HST is better than the PST.

[Riverwind]

Harmonization is great if you're a business or a tax-collecting government. It simply increases revenues for both, while the consumer takes it in the ...

The HST provides direct benefits to business but only indirect benefits to consumers and it will take time for the cost savings to be reflected in the prices charged.

What people forget is it is really a matter of chosing your poison. The goverment needs the revenue and can only get it in so many ways. I prefer consumer taxes because, unlike income taxes, everyone pays them. This reminds people that government services cost money and that if you don't like paying taxes you need to demand less in services. That is why anyone who thinks that taxes should be lowered in the long run is better supporting the HST instead of pressuring governments to find less obvious ways to levy taxes that don't attract as much voter ire.

People who think that taxes should only be paid by the mythical rich who 'can afford it' need to learn that there are not enough rich people to pay the bills and the majority of taxes must come from the middle class. If they don't come from an HST they will get taken from income.

[Wilber]

It's a tax shift from business to consumers pure and simple. You will now get to pay PST on all the labour that went into producing a product or service, not just the materials. If you are into manufacturing, that's good. If you are into a service business, it's bad. If you are a consumer your cost of most items will be going up because you will now be paying tax on labour.

It will impact people on lower and fixed incomes the most because taxes will now be a greater percentage of their income.

[Riverwind]

It will impact people on lower and fixed incomes the most because taxes will now be a greater percentage of their income.

Your math does not compute. People with lower and fixed income spend a much larger percentage of their income on non-taxed items like food and rent. In percentage terms they will be affected the least by the increases, in fact, they may even come out ahead once the increased GST rebates are factored it.

Generally speaking consumption taxes are progressive taxes because the more money people have the more they spend on taxable goods and services which means the more tax they pay.

[Keepitsimple]

It's a tax shift from business to consumers pure and simple.

Not quite that simple - and quite misleading. Most people pay Sales tax on goods - not services. Those goods carry an 8% PST.....but the manuafacturer of those goods is also paying PST on everything associated with making those goods - equipment, materials, energy, etc. They will no longer have to pay this PST.......in general, nothing changes for the consumer. That will cost one heck of a lot of money for the government. That's where services come into play and indeed, the HST will cause the cost to consumers to rise.....lawn cutting, Molly Maid, Legal services, etc....and yes, the controversial Condominium Fees.

But lets get back to goods.....lets not forget that Ontario businesses compete with foreign products to sell them right here in Ontario - and many of them have to compete to export their products. The elimination of paying PST on all materials associated with creating their product will make them more competitive......enable them to sell more product, expand their business, and create jobs. The cynics and business-naive always think that when companies make more money, they just stuff it in their pockets. I suppose that could be true with a little Mom & Pop operation but in general, companies want to expand and create more wealth - instead of making $1000 by selling $20,000, they want to make $10,000 by selling $200,000.

The big picture says that when businesses expand, and new businesses are attracted through tax policy - government revenues grow. The Feds have offered transition funding. Ontario is promising personal tax cuts. We'll see if it all comes out in the wash but it's not the big fat bogeyman that some would have us believe.

[Molly]

IF this is such a good deal as Flaherty says, then why hasn't Alberta and Saskatchewan embraced???

And in Saskatchewan, harmonization particularly suffers from the 'Devine Effect'.

"The idea of harmonizing Saskatchewan's tax with Ottawa's has been on the back burner since former premier Grant Devine's Progressive Conservatives proposed the idea in the early 1990s.

Proponents said it would reduce paperwork and result in fairer taxation to businesses. The NDP called it a tax grab. The PCs ended up being trounced in the 1991 election." (CBC)

[Wild Bill]

Conservatives... you have some splaining to do....

Unlike the NDP, the federal conservative party has almost no control over any provincial Tory party. So it is not surprising to see a conflict about an issue. Tim Hudak cares about Ontario. Jim Flaherty cares about the federal government. So what's to explain?

As far as the very idea of an HST, any sensible Canadian finds it hard to believe that the feds are doing this for OUR benefit! They want the money, plain and simple!

We can argue about the theoretical positives and negatives all we want but that's not really relevant. You can prove anything as a theoretical concept. Where the rubber hits the road is what happens in the real world. What does government REALLY do with a tax grab?

My answer is to give a personal anecdote about my dear departed Nova Scotian grandfather. He was a fine man but struggled all his life with the bottle. When he was on a bender you had to lock up even the aftershave. He would pawn my grannie's silverware to get money for booze. You NEVER, EVER, EVER dared to leave any loose money around!

Governments and taxes always remind me of my grandfather. He always had some great theoretical positives about what he would do if you gave him some money as well.

[madmax]

Unlike the NDP, the federal conservative party has almost no control over any provincial Tory party.

The membership and executives of Conservative and Progressive Conservative Riding associations are often the very same group of 10. It has always been a problem for Provincial Parties and their Federal Cousins with regards to policy and that is no different with the NDP, PQ/BQ, PC/CONs, or LPC/Libs or as Ernest Manning figured out, a burden. That is one reason why Preston Manning wanted no Provincial Reform Parties. I don't believe that the Federal NDP has any control over the Provincial NDP. However, unless Manitoba accepts the Conservative Bribe, the Federal and Provincial NDP stars remain aligned with regards to opposing the HST.

Seriously, the Provincial PCs are not putting enough pressure on their Federal to stop greasing the Provinces and forcing something that wouldn't occur naturally if the Provinces truly wanted the HST.

So it is not surprising to see a conflict about an issue. Tim Hudak cares about Ontario. Jim Flaherty cares about the federal government. So what's to explain?

Idle Hypocrisy in the Conservative Ranks.

As far as the very idea of an HST, any sensible Canadian finds it hard to believe that the feds are doing this for OUR benefit! They want the money, plain and simple!

No doubt.

[Dave_ON]

Your math does not compute. People with lower and fixed income spend a much larger percentage of their income on non-taxed items like food and rent. In percentage terms they will be affected the least by the increases, in fact, they may even come out ahead once the increased GST rebates are factored it.

Generally speaking consumption taxes are progressive taxes because the more money people have the more they spend on taxable goods and services which means the more tax they pay.

I agree. There's no sense complaining about taxes it's one of the only two certainties in life. This is definitely the most progressive taxation method. It's one of the main things that ticked me off about the Harper government when they reduced the GST. Consumption tax is the absolute best and most fair tax there is. Tax what people spend not what they earn. The more you spend on non essentials the more tax you pay. That's fair and it protects those in lower income brackets as they still don't pay taxes on essentials and will likely get an increase in rebate. Anything that makes taxation more efficient will save the tax payer money in the long run. Income tax is outdated and needs to be eliminated or reduced as much as possible. The only way to achieve this is through consumption tax.

[madmax]

This is definitely the most progressive taxation method.

GST, PST, and HST are regressive not progressive.

method of taxations.

It's one of the main things that ticked me off about the Harper government when they reduced the GST. Consumption tax is the absolute best and most fair tax there is.

No it is far from the best or fairest tax there is. It is not a fair tax because it is regressive.

The more you spend on non essentials the more tax you pay.

Essentials are taxed.

That's fair and it protects those in lower income brackets as they still don't pay taxes on essentials and will likely get an increase in rebate.

Not necessarily.

Anything that makes taxation more efficient will save the tax payer money in the long run. Income tax is outdated and needs to be eliminated or reduced as much as possible. The only way to achieve this is through consumption tax.

That kind of thinking will come to bite you in the ass.

However, the interesting thing is.....

The Federal LPC and Provincial Liberals are ALL for the HST.

The Federal CPC and Their Provincial Counterparts are SPLIT on the matter with one foot in and out.

The Federal NDP and their PRovincial Counterparts are opposed to the HST.

Whats the position of the BQ and PQ, or has Quebec adopted the HST and allow the Federal Government control?

Edited September 22, 2009 by madmax

[Smallc]

GST, PST, and HST are regressive not progressive method of taxations.

And you're proof for that lies where?

[jdobbin]

GST, PST, and HST are regressive not progressive.

method of taxations.

No it is far from the best or fairest tax there is. It is not a fair tax because it is regressive.

So you prefer income taxes?

Essentials are taxed.

Food is taxed?

[madmax]

And you're proof for that lies where?

Here

The regressivity of a particular tax often depends on the propensity of the tax payers to engage in the taxed activity relative to their income. In other words, if the activity being taxed is more likely to be carried out by the poor and less likely to be carried out by the rich, then the tax may be considered regressive. To determine whether a tax is regressive, the income-elasticity of the good being taxed as well as the income-substitution effect must be considered.

and here

Regressive taxes attempt to reduce the tax incidence of people with higher ability-to-pay, as they shift the incidence disproportionately to those with lower ability-to-pay.

And here

Examples

A value-added tax or other sales tax on food and other essentials such as clothing, transport, and residential rents can be regressive. Since the income elasticity of demand of food is usually less than 1 (see Engel's law), it tends to take up a higher percentage of the budget of a person or family with a lower

http://www.investopedia.com/terms/r/regressivetax.asp

and this

Progressive & Regressive taxes/taxation explained.

Progressive & Regressive taxes describe the tax table, not a political opinion. It's like a mathematical function. Most often these are called progressive or regressive tax tables or taxes.

In a progressive tax, the more you earn, the higher your tax rate.

In a regressive tax, the less you earn, the higher your tax rate.

The classical progressive tax is income tax.

The classical regressive tax is sales tax.

But there are many taxes and fees that are more extreme of each kind. Combined with this tax theory and these examples, a great deal can be induced about economics and politics.

An example of why sales tax is regressive.

If progressive taxes soak the rich, and regressive taxes soak the poor, why do we almost never hear the term, "soak the poor"? Perhaps that is a "loaded" question?

Let's imagine two frugal traveling salesmen. They each have to buy a new car every four years to (say) keep up appearances, and they need reliable transportation.

(One guy makes 20K, the other 300K)

Run the numbers on a the RATE of total income each pays on on 5% sales tax.

Poor Boy buys a $20,000 car pays $1000 or 5.0% of his income.

Rich Boy buys a $60,000 car pays $3000 or 1.0% of his income.

Poor Boy has 5 times the tax bite, or rate of tax on a car. Rich Boy hardly feels sales taxes.

Then run the numbers on a $30 pair of Levis, and the tax rate discrepancy triples.

Sales tax is NOT a flat tax.

http://www.answers.com/topic/regressive-tax

2. tax system that results in a higher tax for the poor than for the rich, in terms of percentage of income. In this sense, a sales tax is regressive even though the same rate is applied to all sales, because people with lower incomes tend to spend most of their incomes on goods and services. Similarly, payroll taxes are regressive because they are borne largely by wage earners and not by higher income groups. Local property taxes also tend to be regressive because poorer people spend more of their incomes on housing costs, which are directly affected by property taxes.

http://www.irs.gov/app/understandingTaxes/...thm03_les02.jsp

http://www.psnw.com/~bashford/taxation.html

[jdobbin]

Here

So you do prefer income taxes.

The problem with your thinking is that sales tax in Canada does does not include food which hurts the argument that the tax goes after essentials.

If your preference is to end all PST, GST or HSTs, you have to either cut or increase income taxes.

You are of a mind to go after top income earners with a higher income tax?

Edited September 23, 2009 by jdobbin

[madmax]

So you prefer income taxes?

I prefer that people stop bullshitting that the HST/GST/PST are progressive.

Income Taxes can be Regressive, Progressive or Flat. Income Taxes in Canada are progressive and the HST is NOT.

[jdobbin]

I prefer that people stop bullshitting that the HST/GST/PST are progressive.

I think that your own links say that if food is not included, it is less burdensome than if it was included.

Income Taxes can be Regressive, Progressive or Flat. Income Taxes in Canada are progressive and the HST is NOT.

We have seen many studies in what tax is the fairest. Are you saying that Harper was right all along and the the GST should end?

[madmax]

So you do prefer income taxes.

We had income tax without the GST. I preferred that, and the GST picked my pocket disproportionately to others who pay.

Are you eliminating income taxes?

The problem with your thinking is that sales tax in Canada does does not include food which hurts the argument that the tax goes after essentials.

There is no "Problem" with my thinking.

Go without heat, hydro and gas for the winter. These are Essentials and quite frankly kick the shit out of poor people. Go without Clothes and shoes and socks and School books.

Get rid of your phone, your internet. Those aren't essential either. Don't need a car, its not essential, nor is the cab or bus you won't need to ride in because it isn't essential either. Don't worry about a regular haircut... its not essential. The hippie era will comeback.

Peter Pocklington is having his wet dream to come true.

[Riverwind]

Income Taxes can be Regressive, Progressive or Flat. Income Taxes in Canada are progressive and the HST is NOT.

Family making 15K/year with no kids: 600/month housing +400/month food + 250/month taxable items = $12.50GST/month - $41/month GST tax credit = -2.4%

Family making 30K/year no kids: 900/month housing + 600 food + 800/month taxable = 40GST/month - 41/month tax credit = 0%

Family making 60K/year no kids: 1200/month housing + 800 food + 1500/month taxable = 75GST/month = 1.5%

Family making 120K/year no kids: 2000/month housing + 1000 food + 4000/month taxable =200GST/month = 2%

The only people bullshitting are people who say teh GST is regressive.

[madmax]

I think that your own links say that if food is not included, it is less burdensome than if it was included.

It would be less burdensome if it didn't exist.

We have seen many studies in what tax is the fairest.

Regressive taxes are not fair.

Are you saying that Harper was right all along and the the GST should end?

Keep trying.

Harper and Flaherty are playing the orchestra to get the HST implemented. Greasing Liberal palms is the order of the day.

And Liberals just love the HST because their goal like the Conservatives is to continue to remove the burden from those who can afford it to those who can least afford it, and it will generate more revenue in both the Provincial and Federal Coffers.

I lived in a Canada without the GST.

Are the Liberals going to repay the $46 Billion they took from EI? I paid into that too.