Sales Tax/HST/GST - Other People's Money

[Alta4ever]

I think most folks are buying what the governments are telling them. From an Alberta perspective, where we have no PST, the entire thing is a mess! This kind of thing is difficult for us because it seems like every time we leave the province we end up paying more taxes. Did I mention we are not real tax friendly here?

Its pretty easy to understand.

[madmax]

Nothing in the GST is being changed not one thing, what is being changed is what the pst applies to. The GST cannot be amended without a bill in the house of commons, no bill has been introduced or put on the house list. The Province of Ontario is introducing the motion to Harmonize the "provincial" sales tax with the federal. All of the changes being made are being made by the province on their tax not the other way around.

The Federal Bill will be introduced into the house along with the $4.3 billion for Ontario.

Quite Frankly if this bill was killed I would be happy.

[Alta4ever]

Alberta doesn't have a PST. So why can't other Provinces follow that model? And if Alberta doesn't have a PST why should Alberta pay GST? Whats good enough for the Province should be good enough for the entire country. Scrap the GST... entirely.

We also have a flat tax here as well we have no provincial marginal tax rates. We pay at least 10% less then the rest of the country. This was all done back when we had a real conservative atr the helm of the finances of this province. Thank you Stock

Edited November 22, 2009 by Alta4ever

[Alta4ever]

The Federal Bill will be introduced into the house along with the $4.3 billion for Ontario.

Quite Frankly if this bill was killed I would be happy.

The 4.3 will be introduced as part of a ways and means motion, a tax amendment can't be introduced this way.

[madmax]

Apparently not. I posed this question to my MLA and this is the response I got:

"There is currently no GST on used vehicles purchased in a private sale. That means there will be no HST charged. There is however currently a 7% PST charge payable on registration. That may continue as a vehicle registration fee based on cost however, I do not believe a decision has been made as of yet. In any event, there will be no HST."

Here is the banter in the industry

With used cars however there has been a difference dealers collect both taxes while for private sales from individual to individual, there has been no one collecting the 5% GST and ICBC collecting only the provincial sales tax of 7%. ICBC collects it when the vehicle is registered and insured by the new owner.

If there no longer are separate taxes but only the HST at 12%, then my guess would be that ICBC will be charged with collecting it from private sales along with the registration fee and insurance. This in effect will add 5% to the cost of all private sales and eliminate the 5% difference that private sellers and buyers have enjoyed.

I doubt that you will hear Dealers in BC protesting the new tax since they have been collecting both all along and in effect would applaud the removal of the 5% advantage that private sellers have had in selling used cars.

The line in private ads for used cars Private sale and no GST will be history.

Bill Sloan Vehicle Consulting is affiliated with Capital City Auto 1992 Ltd., a Motor Vehicle Sales Authority of British Columbia licensed and bonded dealership.

Edited November 22, 2009 by madmax

[Alta4ever]

Here is the banter in the industry

So the pst may be removed from used vehicles, from the MLA, but you don't believe that just the "banter" fromt he industry, which is maybe as credible as the MLA.

[msj]

I wish people would stop speculating about something for which we do not have a definitive answer.

I have caught madmax and others giving false information in these HST threads and I'm tired of it.

The thing about HST and used vehicles is that if I, as a private individual, sell my used vehicle, and I am not a GST/HST registrant, and the sale is under $30,000, then I would not have to collect the HST since I would be a "small supplier." This applies equally to Ontario and BC.

Now, in BC, we know that ICBC collects the SST (Social Services Tax aka PST) and collects it at a rate of 7% from the buyer when he/she registers the car/boat/aircraft.

For all we know, the BC government will still charge a 7% registration fee of some kind for registration of used cars/boats/aircraft. Maybe it's called HST, maybe not.

This is the best guess based on an understanding of the rule above re: being a non-registrant of HST and therefore not required to collect HST on the sale of a used vehicle (this is why dealers have to charge GST/HST on sales of used vehicles - because their revenue exceeds $30,000 per four quarters they, therefore, must be registrants and, therefore, must collect GST/HST and PST where applicable - although they collect PST based on the provincial rules rather than the federal excise tax act rules, of course).

So far we do not know how used vehicle transaction between private individuals who are not HST registrants will be treated.

Anyone who says they do know should put up a credible link to prove it or STFU.

[August1991]

Tax the rich? If governments try to make the rich pay, the rich cheat and move their money abroad.]Of course, so tax the poor and working families. A perfect example is Harper's pending sales tax, so lucrative to federal coffers he doesn't hesitate to offer multi-billion dollar incentives to Ontario and BC to implement it.

VK, you miss my point. If Leftists want all these government programmes, how are governments supposed to pay for them?

It is absurd/hypocritical/incoherent/childish for the NDP/Liberals to criticize the GST. If you want governments to spend, you must want governments to tax. It is false in practice and in theory to pretend that someone else will pay these taxes. We all will.

And expand the underground economy.

Under the table work and sales will grow considerably.

In general, tax evasion is lower under VAT than under income taxes. This explains in part why European governments rely more on VAT rather than income taxes.

The GST is not amended just the PST so so i would suspect it would be removed but GST is charged on used vehilces bought at acar dealership, unless you have a trade in then it is just charged on the difference.

GST is a value added tax so the idea (I guess) is that a car dealer improves the value of a used car. Presumably, HST will apply to all used car sales through dealers as the GST is applied now.

I don't mind the idealogical debate on the HST. However, this is about the CPC denying involvement in the tax.

I heard all the good things about the GST back in 88 and 89, from the Conservatives.

Madmax, you can criticize the GST/HST or any other tax if you want. I call it hypocrisy to criticize a tax and then call for high government spending. Who is going to pay for this? The rich? Edited November 22, 2009 by August1991

[Wilber]

Interesting. If they move the 7% PST to a form of user fee, there will be a TAX on the userfee, just like in Ontario, where GST is applied on top of a debt retirement tax.. DID WE EVER GET SNOOKERED.

Get SOMETHING OFFICIAL and in WRITING. LOL. If the PST remains then the HST will apply. Strictly because if it doesn't the DEALERS WILL HAVE A SHIT FIT!!! They already believe they are being penalized because of the Private Sector not having to add GST.

It has been acknowledged in Ontario that the PST will remain and the GST Will be added in the form of the HST. Dealers are happy campers.

You can speculate all you want but the MLA was pretty clear about the additional 5% not being added to the private sale of vehicles. Time will tell if he is being truthful or not. When you get right down to it, there is really no way of monitoring actual value of private sales anyway, particularly if there is cash involved.

[madmax]

I wish people would stop speculating about something for which we do not have a definitive answer.

I have caught madmax and others giving false information in these HST threads and I'm tired of it.

Actually, you have provided links that are interpreted. Infact, I am often having to read an entire piece of legislation and you have yet to link and provide a quote of reference. Just a link.

Regardless, I read the link.

I have provided quotes from legal documents I receive at my place of work and because of one of your posts, I am going back for clarification... if you are correct it will cost nothing and if you are wrong it will cost thousands. And quite frankly it is these companies with whom I do business and not you.

So who's zoomin who?

For my companies benefit, I hope you are right. I would prefer status quo. I am not making up false information, I am receiving information from my suppliers.

[madmax]

Madmax, you can criticize the GST/HST or any other tax if you want.

Thank you, I will do just that.

[madmax]

When you get right down to it, there is really no way of monitoring actual value of private sales anyway, particularly if there is cash involved.

Then you pay tax on book value if your purchase price is too low. :angry:

In addition

The Ontario government sends out letters to the seller of the vehicle to respond in writing the sale price of the vehicle. The purchaser is the one who brings in the price of the vehicle and pays the tax.

Its getting easier to track purchases and the younger generation aren't into cash , and some of us older generation are none to fond of receiving $5,000 in cash with $1500 in counterfeit :angry:

[dlkenny]

Leftists (NDP, Liberals, BQ, PQ) love to spend other people's money. How are we supposed to pay for all these government programmes? Governments must tax.

Tax the rich? If governments try to make the rich pay, the rich cheat and move their money abroad.

Governments can also borrow, but that just puts the tax on to the children of today's rich people - assuming that these rich kids will be stupider in the future than their parents now, and the kids won't know how to avoid the future taxes.

----

I hate these debates about taxes.

In my mind, I wonder why government bureaucrats/politicians can so easily spend so much of other people's money.

And I also wonder, as a Conservative, what our government bureaucrats/politicians should do. In a world where people honestly paid their taxes, what would government be?

It's not possible to tax the rich as it is the average person because the rich usually do not have much of anything in their own names. The rich intentionally try to not own anything but to control everything. Rich people keep most of their assets in corporations and trusts. More than that, they utilize highly skilled tax lawyers and accountants to minimize taxation through the same loopholes that are available to everyone, though they are not commonly known. It is very important to our society to allow tax breaks on money borrowed for investment purposes, it promotes growth but in the case of the very rich and of corporations can sometimes offset a very large percentage of that corporation's profits. From the government's point of view, these investments create jobs and incomes which can then be taxed and so the tax write off becomes a tool for the government to take in more money.

It's a somewhat complicated system but it does make an uneven playing field, especially for high income working class people who already pay more than their fair share in taxes. You're right though, governments must tax because it's their only source of revenue. If governments were smart in the boom years they would invest surpluses in income producing assets instead of spending it all. In reality a certain percentage of our tax dollars should always be invested for the future. Imagine if the founders of this nation had done this, instead of a $500 Billion deficit that we're paying interest on, if we had $500 Billion in assets that was compounding and paying us. Imagine how that would reduce the burden on the taxpayers.

Instead though we get greedy politicians who use programs like the gun registry and the sponsorship scandal to siphon off these excess dollars into their pockets and their friend's pockets. EI is one example, Paul Martin never balanced the budget...he changed the UI system to EI and put the money into general revenue to create the illusion of a balanced budget. If the money in the EI fund had been properly managed we wouldn't need an increase in our EI premiums because the assets in the fund would pay for it. Someday we need to get someone with some gonads in government to make some changes, some changes that might upset people in the short term but will make life easier for everyone in the longrun.

[msj]

Actually, you have provided links that are interpreted. Infact, I am often having to read an entire piece of legislation and you have yet to link and provide a quote of reference. Just a link.

Regardless, I read the link.

I have provided quotes from legal documents I receive at my place of work and because of one of your posts, I am going back for clarification... if you are correct it will cost nothing and if you are wrong it will cost thousands. And quite frankly it is these companies with whom I do business and not you.

So who's zoomin who?

For my companies benefit, I hope you are right. I would prefer status quo. I am not making up false information, I am receiving information from my suppliers.

If your company is a GST registrant then it wouldn't be paying the GST/HST in the first place (well, it would pay it but get it back upon filing the company's next GST/HST return).

Also, that is not the first time I have found you exaggerating or misunderstanding what is taxable, exempt, zero rated for GST/HST purposes and what is taxable or not taxable for PST purposes.

I'm pretty sure it was you who misunderstood that in BC, at least, legal fees are already taxable so for most people (legal aid is an exception) there is no change.

Perhaps I should go dig out the old threads for some good laughs.

[madmax]

I'm pretty sure it was you who misunderstood that in BC, at least, legal fees are already taxable so for most people (legal aid is an exception) there is no change.

no it wasn't me, but that didn't stop you from sending a link to my post. I couldn't figure out why I was receiving a judiciary link. I thought you were being cryptic. I read the government link anyways, for fun .

Perhaps I should go dig out the old threads for some good laughs.

Go ahead.

[Dave_ON]

VK, you miss my point. If Leftists want all these government programmes, how are governments supposed to pay for them?

It is absurd/hypocritical/incoherent/childish for the NDP/Liberals to criticize the GST. If you want governments to spend, you must want governments to tax. It is false in practice and in theory to pretend that someone else will pay these taxes. We all will.

I concur completely which is why as a "leftist" I was critical of Harper's cutting of the GST. There is no way to maintain the current level of spending while at the same time cutting the GST. Something has to give and you either must raise taxes or you must cut services.

The 2% cut was little more than a political ploy to placate the CPC's Alberta support base. This is unsustainable and should have instead come as a 2% reduction in income tax/capital gains etc.

Sadly this will likely come in the form of an income tax hike. This is perhaps the absolute worst thing they could do. For some reason folks have it in their head that income tax is the most fair form of taxation. This is not the case as it rests the burden of taxation squarely on the middle class. Rather than spreading it out progressively as is the theory. Truth is the lower your income the less you can afford to "shelter" therefore the more tax, proportionally, you end up paying as a result.

In general, tax evasion is lower under VAT than under income taxes. This explains in part why European governments rely more on VAT rather than income taxes.GST is a value added tax so the idea (I guess) is that a car dealer improves the value of a used car. Presumably, HST will apply to all used car sales through dealers as the GST is applied now.

Madmax, you can criticize the GST/HST or any other tax if you want. I call it hypocrisy to criticize a tax and then call for high government spending. Who is going to pay for this? The rich?

Which is precisely why a consumption tax is the easiest to administer and nearly impossible to evade. Even if you choose to buy it out of the country you'll have to pay duty on it if you wish to bring it back here. It is my belief that we should eliminate the absolutely archaic income tax and increase the consumption tax. The more money you have to spend, the more you tend to spend, therefore the more tax you pay. This puts the amount of tax completely in your control and would actually encourage folks to save their money rather then spend it. I realize this means the poor will pay more taxes but honestly that could be easily offset with a change to the current rebate program.

[Jerry J. Fortin]

My first choice would be to eliminate all income taxes, personal and business and replace those revenues with a consumption tax at the federal level, an GST on roids so to speak.

[Jack Weber]

I don't mind the idealogical debate on the HST. However, this is about the CPC denying involvement in the tax.

I heard all the good things about the GST back in 88 and 89, from the Conservatives.

Here,here!!!!

This one ai'nt going to go away for the federal Con's in Ontario....

[August1991]

The 2% cut was little more than a political ploy to placate the CPC's Alberta support base. This is unsustainable and should have instead come as a 2% reduction in income tax/capital gains etc.

I think Harper cut the GST because it was a clear promise that he could make, and keep - in contrast to the Liberals.

Harper made himself a reputation.

Which is precisely why a consumption tax is the easiest to administer and nearly impossible to evade. Even if you choose to buy it out of the country you'll have to pay duty on it if you wish to bring it back here.

It is possible to evade VAT/GST. Who knows whether your hairdresser or plumber forwards any GST they may collect?

There are fewer GST collection points (compared to income tax) and if overall economic cost is the measure, there is likely less to worry about VAT evasion than income tax evasion.

I agree that we should move to VAT (with a much more generous rebate) and reduce income taxes. I believe that Bermuda has a 35% VAT but no income tax at all.

One idea would be to include GST/HST in the retail price. This would make shopping so much easier (but it would also make it easier for governments to raise taxes).

[Who's Doing What?]

A flat consumer tax in my oppinion is the way to go. THat way those spending money are funding the govt.

A small income tax, starting at earnings over $60,000 combined with a 10-15% sales tax would benefit the most people.

Those making good money pay a small income tax, while the consumer tax covers most govt spending.

I just want my money. Give me my money and if I choose to spend it then tax me on it. If I chose to save it, like I am right now for a wedding and a house, then that is my choice. Tagging me for $400 every paycheck does not help me get ahead, regardless of how well the medical treament was I had during my hernia surgery.

As I said when the CPC first proposed the GST cut, who does that really help? I don't have the income to spend enough to generate $1400 in GST at 7% over the course of an entire year, but the guy who can afford to buy the $100,000 car with the 2% reduction just saved $2000 in one shot.

The taxation system is unfair. Why is that you can get a raise at work and take home less money? It needs to be looked at but I think a flat consumer tax is the best bet. It encourages both personal wealth and small govt. Is that not what we all want?

[August1991]

The taxation system is unfair. Why is that you can get a raise at work and take home less money? It needs to be looked at but I think a flat consumer tax is the best bet. It encourages both personal wealth and small govt. Is that not what we all want?

Take a look at this graph from this link.

The graph is from US data. In Canada, the situation is worse. In effect, in Canada, once you take into account all the various social welfare transfers/taxes (child tax credits, CPP, EI, GST rebates, various clawbacks), for anyone earning between 30,000 and 50,000, their in-pocket income barely changes. Below 30,000, the situation is atrocious. It is probably better to stay on welfare than work at minimum wage but to go from minimum wage ($10/hour) to $20/hour makes no change and even reduces take-home pay. At $40,000 per year (about $20/hour), a person is paying all the basic payroll taxes - CPP, EI, assorted provincial fees, union dues, drug/medical - but gets almost nothing in any government transfer. They're all clawed back.

It depends on family configuration and province, but in general, whether you earn 35,000 or 25,000, it makes no difference. Your take-home pay is the same.

Of course, if anyone can break the 60,000 barrier, then the tax situation changes. They pay more tax, but they also have more income.

Edited November 27, 2009 by August1991

[August1991]

Next summer, if the Harper Conservatives and McGuinty Liberals have their way, a haircut will cost you 8% more. Burying a loved one will cost 8% more. Vitamins, a pair of sneakers, postage stamps, vet fees for your dog, and an oil change for your car will all cost 8% more. Even the price of gas will go up.

That's going to hurt a lot of families, seniors, young people and small business.

From the outset, we New Democrats said the HST (harmonized sales tax) is the wrong tax at the wrong time. The recession is still being felt, unemployment is still rising and this regressive tax will take $2.5 billion out of the pockets of those least able to afford it.

To be clear, Stephen Harper is giving Premier Dalton McGuinty $4.3 billion in exchange for his agreement to tax you more.

B.C., which is also getting the HST, is being paid too, so I can understand why Quebec, which has already harmonized its sales taxes, will want compensation.

But these payouts are all money that drives Canada further into debt and for which the government hasn't budgeted.

At the same time, big companies are winning the jackpot with yet another $1.5 billion in corporate tax cuts and, as McGuinty and Harper boast, the HST will cut business input costs even further. In other words, the HST will drive up taxes that families pay and lower them on big business.

Jack Layton - Toronto Sun

It is a wonder to see Layton complain about "driving Canada further into debt". How are governments going to pay for all the various social programmes that the NDP and left Liberals want? If a politician wants government to solve problems, then the politician must also favour taxes. It is pure demagoguery to argue for expanded government services without admitting that taxes are necessary to pay for them.

-----

There is another issue that Layton doesn't address and that's how to tax efficiently. By rights, Canada's taxes should shear the sheep in a manner that causes the least contrary behaviour.

The HST with quarterly refunds is a fair and efficient tax. Layton knows this and this column is pure political grandstanding.