Christy Clark is the new Premier Designate

[TimG]

Possibly lower prices on some goods but higher labour costs. More activity in some parts of the economy, less in others. Whether it is a good trade off depends on where your income comes from and what your expenses are.

Obviously. However, governments cannot change tax policies without create some winners and losers. The fact that some people lose out is not an argument against a tax that is good from a macroeconomic perspective.

[Wilber]

It isn't going to be compounded. It's a jump once and then an increase at what the rate otherwise would have been for eternity.

Do you honestly think todays 3% inflation is based on 1940 prices? Todays inflated price is the baseline for tomorrows inflation. We tax inflation remember.

[Wilber]

Obviously. However, governments cannot change tax policies without create some winners and losers. The fact that some people lose out is not an argument against a tax that is good from a macroeconomic perspective.

You might get an argument from the those who are losing out. Wait a minute, you are.

[TimG]

Todays inflated price is the baseline for tomorrows inflation. We tax inflation remember.

And wages go up with inflation too. In big picture the inflation hit is insignificant and disappears after about 5 years as prices adjust down. The hit only occurs because there is large jump when the tax is put in. Edited April 23, 2011 by TimG

[dre]

For that, the Feds have to share the blame. It seems it was they who put the time-limited offer on the table.

So what you're saying is you don't mind a proper VAT, but just one not integrated with the Feds? I'm of two minds on that one. One of the major advantages of the HST is that it streamlines collection for both the government and business. For most businesses, GST/HST calculations are a one page form they do every three months. If they took in more than they spent, they send out a cheque for the difference, otherwise they get a cheque for the difference. The rules, while having a few wrinkles, are vastly simpler than the PST, which was a dog's breakfast of rules and regulations. As I've said previously, I've been through a few PST audits and never saw one where the end result was the same as the result going in.

So with HST we have one tax department that businesses deal with, one set of rules that tend to be fairly easy to understand. It's cheaper from an administrative perspective. Split it into two taxes, even if you retain the VAT aspects in the restored PST, well, you have two tax departments, the potential, if not outright likelihood that the two will diverge in rules and once again make the collection of these taxes increasingly complex, and in many ways, risky for businesses.

I'll be voting to retain the HST, myself. I was angry at how the Liberals brought it in, but the principles are gone now, the current leader had nothing to do with it, in other words those that should have been punished have been to the extent that we punish anyone in our system for bad policy. I was leaning towards the NDP, but then they chose that ethically-challenged hardliner Dix, and pretty much in that instant my decision was made.

I like the idea of harmozing to create efficiency but the problem is its regressive and shifts the tax burden to those that can least afford it. Id scrap both consumption taxes and adjust income tax to offset the revenue loss.

I might support the HST if all the things that are PST exempt now were going to be HST exempt.

[Smallc]

I like the idea of harmozing to create efficiency but the problem is its regressive and shifts the tax burden to those that can least afford it.

Except it doesn't. The poor get a GST or an HST rebate.

[Wilber]

And wages go up with inflation too. In big picture the inflation hit is insignificant and disappears after about 5 years as prices adjust down. The hit only occurs because there is large jump when the tax is put in.

Some do and some don't. In may fields, wages haven't kept up with inflation and very few retirees have indexed pensions. This may help economic growth but people will also be hurt by it.

Prices will not adjust down enough to compensate fully.

[Wilber]

Except it doesn't. The poor get a GST or an HST rebate.

True, like most taxes this is aimed directly at the middle class.

[Smallc]

wages haven't kept up with inflation

Based on what? What I've seen says that they have kept in front of it by a couple of percentage points, generally.

[Wilber]

Based on what? What I've seen says that they have kept in front of it by a couple of percentage points, generally.

Gross or after tax? Based on my own industry it has been downhill since the late eighties.

[Smallc]

Gross or after tax? Based on my own industry it has been downhill since the late eighties.

Your particular industry is a terrible example of what has happened nationally. Taxes have decreased since the mid 90s quite significantly.

Edited April 23, 2011 by Smallc

[Wilber]

Your particular industry is a terrible example of what has happened nationally. Taxes have decreased since the mid 90s quite significantly.

Only income taxes. Others have not gone down and there has been a myriad of new taxes and user fees introduced since then. Property taxes continually outstrip inflation. HST is just one more.

[Smallc]

Only income taxes. Others have not gone down and there has been a myriad of new taxes and user fees introduced since then. Property taxes continually outstrip inflation. HST is just one more.

No, as a percentage of the economy, taxes are less than they were in the mid 90s. I'm not sure where I found the info, but I've posted it on MLW before.

[Wilber]

No, as a percentage of the economy, taxes are less than they were in the mid 90s. I'm not sure where I found the info, but I've posted it on MLW before.

Percentage of the economy doesn't mean much when one portion of the economy is paying an increasing proportion of the taxes.

Inflation is a governments best friend. It lowers the value of its debt and as its revenues are collected after inflation, they go up. Not so great for those who are paying the taxes however.

[Smallc]

Percentage of the economy doesn't mean much when one portion of the economy is paying an increasing proportion of the taxes.

What portion? Income taxes and corporate taxes are both down. Yes, cities have had to raise taxes, but beyond that, there has been very little in the way of tax increases.

[ToadBrother]

I like the idea of harmozing to create efficiency but the problem is its regressive and shifts the tax burden to those that can least afford it. Id scrap both consumption taxes and adjust income tax to offset the revenue loss.

The general consensus among economists is that VATs are superior to income taxes. If hitting the poor is a concern do what most VAT regimes do and give low income earners a regular rebate cheque.

I might support the HST if all the things that are PST exempt now were going to be HST exempt.

Which creates a situation in which producers of goods end up being unfairly targeted while those producing services get an easier ride. That's the other thing about VATs, they more evenly distribute taxes.

[Wilber]

What portion? Income taxes and corporate taxes are both down. Yes, cities have had to raise taxes, but beyond that, there has been very little in the way of tax increases.

Where have you been, there have been user fees up the ying yang added where I live. Doesn't matter what you call them, what I have left after governments take their share is what I have to make the economy work.

[Smallc]

Where have you been, there have been user fees up the ying yang added where I live. Doesn't matter what you call them, what I have left after governments take their share is what I have to make the economy work.

Well, actually, all of that money goes into the economy, but wages are up, and taxes as a percentage of the economy are down. There isn't much else to say really.

[Wilber]

Well, actually, all of that money goes into the economy, but wages are up, and taxes as a percentage of the economy are down. There isn't much else to say really.

There is a lot to say when you are shifting the tax burden from one part of the economy to another. That is the essence of this debate.

If everything is so rosy on the inflation front, why are personal debt levels at record highs?

[TimG]

If everything is so rosy on the inflation front, why are personal debt levels at record highs?

Because property prices are at record highs and interest rates are at record lows.

[Smallc]

If everything is so rosy on the inflation front, why are personal debt levels at record highs?

Because people spend more on luxuries than ever. Everyone is in competition with everyone else. Debt levels don't have to be this high.

[Wilber]

Methinks your two statements contradict each other.

[TimG]

Methinks your two statements contradict each other.

They don't. Nobody is forced to buy the most expensive home they can afford. They choose to. The net result are people piling on record levels of debt.

[Wilber]

They don't. Nobody is forced to buy the most expensive home they can afford. They choose to. The net result are people piling on record levels of debt.

Being able to buy any home in the lower mainland of BC is the most expensive home you can afford. Same goes for the Okanagan.

Edited April 23, 2011 by Wilber

[TimG]

Being able to buy any home in the lower mainland of BC is the most expensive home you can afford. Same goes for the Okanagan.

You can buy an apartment for what people paid for houses 20 years ago. People are still buying houses.