The Harmonized Sales Tax referendum in BC

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    Jul 06, 2011 7:11 AM GMT
    To those who live in beautiful British Columbia, the HST referendum is upon us. What are your views on this issue?
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    Jul 06, 2011 2:46 PM GMT

    We're voting to scrap it (which means voting yes, go figure) . Back to the drawing board. They handed complete control over what gets taxed the Provincial portion to the federal gov't. No sooner than it came in the feds taxed soy milk and are now looking at adding 12% to frozen juices.

    What the Prov gov't should do is renegotiate it with the Federal gov't to retain control, and reduce it now to 10% rather than with an airy fairy promise that it will reduced in the future.


    Quite frankly I agree with sales taxes; they get tax money that way from people who pay no income tax (and I'm not talking poor people here) icon_wink.gif.

    -Doug
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    Jul 06, 2011 2:59 PM GMT
    I am very much in favour of the HST. The Vanderzalm campaign has been cheap and misleading. It seems like most people in BC don't understand that this isnt't a replacement of two sales taxes with one, it's replacing a sales tax with a consumption tax.

    A cosumption tax as in a VAT. North America typically doesn't have these, and it's essential that this old sales tax system gets replaced with a consumption tax. Sales taxes are a result of large decentralized territories with limited trade, and in a connected world of logistics and e-tail, a consumption tax removes a whole layer of taxes in the trade process, and is way easier to manage.

    All of North America will have to switch to a consumption tax at some point, and I'm glad to see Canada in general and BC in particular are leading the way.

    10% consumption tax for sure beats 12% sales tax. Hell, 10% consumption tax beats 8% sales tax. As always in BC though, it's gonna take a while before any changes will translate into lower consumer prices, the #1 enemy of BC.

    Vote no on the HST referendum icon_wink.gif
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    Jul 06, 2011 3:11 PM GMT
    Provincial Sales Tax has ALWAYS been collected by the federal government and then given back to the province. There is no loss of "Provincial sovereignty" or any other bullshit like that.

    It's true, under the HST, services, which used to be PST-exempt are now taxed, but the question is why were they exempt in the first place? Doesn't make sense. Items that have been made specifically exempt, such as baby formula, diapers, etc. will continue to be tax-exempt, contrary to what many people believe. Under the PST, items such as logging machinery and mining equipment and other machines used by large corporations for natural resource extraction were exempt from provincial sales tax - why? BC has the natural resources that companies want and need - we don't need to give them tax-exempt status to entice them to come to us, we should be taxing these purchases the same way individuals are taxed for lawn mowers, and TVs.

    Small businesses only fill out one tax form under the HST, while under the PST, they have to fill out two tax forms, the one for PST being extremely complicated and full of weird tax rules.

    Under the HST, families in the bottom-fifth income bracket, those most likely to be hit hard by an increase in taxes, receive a cheque for over $200, under the PST, that amount drops to $75. It is true that it has been shown families will be out just over $300/year under the HST, but in two years, when it is dropped to 10%, families will actually be UP $120/year.

    Experience in the Atlantic provinces and Quebec has shown that, within five years of switching to HST, businesses lower their prices to reflect the lower amount of taxes they are paying on the products - we live in a competitive market; if businesses want customers to come to them, they have to lower their prices - passing on the savings to us.

    Under the HST, we have already been assured by the government that the tax will be lowered by one percent next year and another percent the following year, giving BC, along with Saskatchewan, the LOWEST sales tax in Canada outside of Alberta, which doesn't have a provincial sales tax.

    To make up for any shortfall due to the lowering of the HST, corporate taxes are set to be increased from 10% to 12% - this is something that I think many of us are happy about.

    The simplification of the tax system and lower tax rate are expected to create nearly 25,000 jobs in BC in the next 10 years. Under the PST, those jobs are not created.

    For switching to the HST, the federal government gave BC $1.6 Billion. That money has to be paid back if BC goes back to PST. Where will the money come from?? If we have to pay it back, we're looking at an annual deficit of over $500 million. You don't need to be a rocket scientist to know that that money will have to come from somewhere; think raised income taxes, slashed funding for education, health care, infrastructure, I think you get the picture.

    I get it - people are pissed at the Liberals for how they introduced the tax after an election, during which it never came up. Being pissed at the government for HOW they did something however, is not a good reason for scrapping a tax that has been shown to be extremely beneficial to the province. If you're pissed off at the government, vote them out, but don't get rid of a more efficient, streamlined tax system.

    HST is a Value-Added Tax - it is a more progressive tax system then the traditional PST-based system and has been adopted by many jurisdictions around the world because it has been proven time and again to be far more efficient and beneficial than other tax policies.

    I'm voting No - I am voting to keep the HST because, unlike so many people who have been hoodwinked by Bill Vander Zalm and are just swallowing everything he has to say without checking any of his facts, I have done my research and concluded for myself that the HST is better for BC than the PST.

    But don't take my word for it; do your own research!! go to www.hstinbc.ca and decide whether you like the HST or not.
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    Jul 06, 2011 3:49 PM GMT
    This is a very good video of a guy knocking down Bill Vanderzalm's campaign... It's a whole 15 minutes but kinda worth sitting through:

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    Jul 06, 2011 4:09 PM GMT
    "I get it - people are pissed at the Liberals for how they introduced the tax after an election, during which it never came up."


    Well, actually it did. Leading up to the elections Campbell said there were no plans to implement it. Even Clark, his successor says she thought he was rather was sneaky about it.
    Then there was Hansen, who was confronted by the media about lying when he'd been signing documents about it before the election yet claimed to have done no such thing til confronted, then said he doesn't read much of what he signs.

    I believe this HST is a good thing, too. But again, taxing food is going too far.

    BC DID loose control over what was taxed and what wasn't.

    ubcboy, we certainly did our homework. We think the current HST and the rules around it need a serious review and adjustment.


    BC is proposing point-of-sale rebates for things it does not want taxed.

    This referendum is completely non-binding and the gov't can completely ignore the results. We're hoping a sizable vote to scrap it will make them come up with something a little more concrete than proposals, with which they have a lousy track record.

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    Jul 06, 2011 5:23 PM GMT
    [quote][cite]meninlove said

    I believe this HST is a good thing, too. But again, taxing food is going too far.

    BC DID loose control over what was taxed and what wasn't.


    This referendum is completely non-binding and the gov't can completely ignore the results. We're hoping a sizable vote to scrap it will make them come up with something a little more concrete than proposals, with which they have a lousy track record.

    [/quote]

    Actually, under the HST, things that were GST exempt will still be HST exempt, including basic groceries. Quoted from HSTinBC.ca "Generally, basic groceries include things like, fruit vegetables, eggs, and meat that you use to prepare meals at home. However, you are charged HST when buying snacks, candy, prepared foods, and some other items." http://www.hstinbc.ca/buying_goods/what_has_the_same_tax/


    This referendum is actually binding; the government has stated that if a simple majority votes to scrap the HST, it will be dumped. Quoted from CBC, "If British Columbians vote against the HST in a referendum, the province will dump the controversial tax, says B.C. Premier Gordon Campbell.

    Campbell said the issue will be decided by a simple majority in a referendum to be held Sept. 24, 2011, and if more than 50 per cent of those who vote want the tax gone, the Liberal government will get out of the tax deal with Ottawa."
    http://www.cbc.ca/news/canada/british-columbia/story/2010/09/13/bc-hst-petition-committee-decision.html

    In regards to the proposal for point-of-sale rebates: There is only 5 per cent HST (the federal part) on point-of-sale rebate items (motor fuels, books, etc.) – there is no 7 per cent provincial HST. This was, again, taken directly from HSTinBC.ca - It's not a proposal, it's already in place.
    http://www.hstinbc.ca/making_your_choice/faqs/

    Scrapping the HST is bad for all British Columbians.

    If a majority votes to scrap it, it will be gone - hoping that a sizable vote to scrap it will encourage the government to amend the rules surrounding it is a fool's dream. Changes have already been made that address the major issues.

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    Jul 06, 2011 5:35 PM GMT
    "If a majority votes to scrap it, it will be gone - hoping that a sizable vote to scrap it will encourage the government to amend the rules surrounding it is a fool's dream."


    lol, well then we're fools. icon_wink.gif
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    Jul 06, 2011 5:49 PM GMT
    Some countries have a tiered system - my country of birth has a 19.5% VAT on everything, but a 6% on selected basic foodstuffs (bread, eggs, etc.)

    Now THAT is taxing a nation into the stone age.

    The thing that I personally don't like is the taxing of gym memberships and other health-promoting products and services, and I really do think the provincial government needs to use the HST as a tool to encourage certain purchases and behaviours.

    What is not mentioned though, is that these kind of policy decisions are actually easier with a consumption tax as opposed to a sales tax, because of its cascading nature - otherwise it would eat directly into the price point of the supplier.

    And as far as Campbell is concerned... well... politicians lie. They all do. Some more than others.
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    Jul 06, 2011 9:05 PM GMT
    ubcboy said
    I get it - people are pissed at the Liberals for how they introduced the tax after an election, during which it never came up. Being pissed at the government for HOW they did something however, is not a good reason for scrapping a tax that has been shown to be extremely beneficial to the province. If you're pissed off at the government, vote them out, but don't get rid of a more efficient, streamlined tax system.

    HST is a Value-Added Tax - it is a more progressive tax system then the traditional PST-based system and has been adopted by many jurisdictions around the world because it has been proven time and again to be far more efficient and beneficial than other tax policies.

    I'm voting No - I am voting to keep the HST because, unlike so many people who have been hoodwinked by Bill Vander Zalm and are just swallowing everything he has to say without checking any of his facts, I have done my research and concluded for myself that the HST is better for BC than the PST.

    But don't take my word for it; do your own research!! go to www.hstinbc.ca and decide whether you like the HST or not.


    I Completely agree with you. Well said. I'm also voting to keep the HST. Yes, the Liberals brought the tax in in a questionable manner but that is not reason to get rid of something this good. It is a much more efficient way to collect taxes, Harmonized taxes have been implemented in many other countries around the world and have proven to promote smaller businesses by allowing them to provide a higher quality service/product by rolling the tax down the buyer chain.
    it just makes sense to keep it. The PST+GST system is outdated and probably costs more taxpayer money anyway to maintain it.
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    Jul 08, 2011 1:10 PM GMT
    In an ironic twist:

    http://uk.finance.yahoo.com/news/Ireland-Drops-VAT-To-Give-skynews-1939897431.html?x=0



    and this one:

    http://www.newbusiness.co.uk/articles/accounting-advice/how-vat-change-affects-you

    "It is up to you whether you reduce your VAT inclusive prices to reflect the lower VAT rate. The government encourages businesses to pass on the benefit of a lower VAT rate to customers by lowering prices, but you do not have to do so."


    Buoyed by the optimistic posts we read here, we've been asking businesses about lowering prices, as we know a great many people who either own a business or are holding executive positions in larger ones.

    So far.... None are planning on lowering prices and thought I was a little kooky for suggesting it.
    Several called it a much needed windfall (their leased space went up) and two people we know in the executive of large firms have said the money is being put towards buying up a competitor. With federal corporate tax dropping to 17% and the HST refunds they think they'll be able to do this soon. Once they achieve synergy as they merge they will be laying off as they won't need as many employees. One gal giggled and said they are a business and not a social service.
    Others have said they will be raising prices because Hydro is going up, so are fuel taxes etc. I was told by a couple that 'you always charge what the market will bear, Doug" *blush*

    ..at the same time we do need this tax. There's a lot of foreign nationals benefiting from our social programs, infrastructures etc that have never contributed via income tax.
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    Jul 08, 2011 11:23 PM GMT
    meninlove said In an ironic twist:

    http://uk.finance.yahoo.com/news/Ireland-Drops-VAT-To-Give-skynews-1939897431.html?x=0



    and this one:

    http://www.newbusiness.co.uk/articles/accounting-advice/how-vat-change-affects-you

    "It is up to you whether you reduce your VAT inclusive prices to reflect the lower VAT rate. The government encourages businesses to pass on the benefit of a lower VAT rate to customers by lowering prices, but you do not have to do so."


    Buoyed by the optimistic posts we read here, we've been asking businesses about lowering prices, as we know a great many people who either own a business or are holding executive positions in larger ones.

    So far.... None are planning on lowering prices and thought I was a little kooky for suggesting it.
    Several called it a much needed windfall (their leased space went up) and two people we know in the executive of large firms have said the money is being put towards buying up a competitor. With federal corporate tax dropping to 17% and the HST refunds they think they'll be able to do this soon. Once they achieve synergy as they merge they will be laying off as they won't need as many employees. One gal giggled and said they are a business and not a social service.
    Others have said they will be raising prices because Hydro is going up, so are fuel taxes etc. I was told by a couple that 'you always charge what the market will bear, Doug" *blush*

    ..at the same time we do need this tax. There's a lot of foreign nationals benefiting from our social programs, infrastructures etc that have never contributed via income tax.


    And they're right. Businesses are not social services, they're businesses. If they need to lay off workers, that's their decision and I don't think the HST really has much to do with it. Before the HST, there weren't taxes on many of the things (services) that normally are taxed. I'm not sure why those people were getting HST refunds. Aren't refunds only for those at certain low income brackets? May I ask which businesses you were talking to?
    As for Hydro and gas bills going up, that shouldn't be such a big surprise. The hydroelectric system we use in this province has been around since the 50/60s, think how expensive it is to maintain that in the long term. If we expect to continue living off that in a sustainable way that infrastructure has to be updated and maintained and that requires money. The same goes for just about everything the government has a role in managing (and that's alot of services).
    Basically, the HST is the most efficient way for everyone to pay their taxes and for the government to collect them and allocate funds properly. It just makes sense.
    If we expect to continue to live at this level of comfort, if we expect to live sustainably and have all these services from the government improving, the money has to come from somewhere.
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    Jul 08, 2011 11:26 PM GMT
    I love Canada. Even their taxes sound so much better--"harmonized."

    (As opposed to "job-killing") icon_lol.gif
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    Jul 09, 2011 2:27 PM GMT
    thecanadianonesaid, "I'm not sure why those people were getting HST refunds."

    Input Tax credits:

    IInput Tax Credits: Getting Back More of The Tax You Pay

    "Under the HST, most businesses can recover the sales tax they pay on the goods and services they buy to operate their business. These are called “business inputs” and include products and services such as:

    Vehicles
    Furniture
    Office supplies
    Legal services
    Telecommunications equipment and services
    Kitchen equipment
    Cleaning supplies
    Energy used to heat and cool offices
    Electricity used to run offices and equipment
    As you know from running your business, Input Tax Credits aren’t new. It’s the same system used prior to July 1. Before the HST, most businesses could only recover the 5 per cent GST paid on business inputs, but couldn’t get back any of the 7 per cent PST paid. Under the HST, most businesses can now recover the full HST paid."

    icon_wink.gif

    http://www.hstinbc.ca/running_a_business/what_to_know/
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    Jul 11, 2011 5:03 AM GMT
    meninlove said thecanadianonesaid, "I'm not sure why those people were getting HST refunds."

    Input Tax credits:

    IInput Tax Credits: Getting Back More of The Tax You Pay

    "Under the HST, most businesses can recover the sales tax they pay on the goods and services they buy to operate their business. These are called “business inputs” and include products and services such as:

    Vehicles
    Furniture
    Office supplies
    Legal services
    Telecommunications equipment and services
    Kitchen equipment
    Cleaning supplies
    Energy used to heat and cool offices
    Electricity used to run offices and equipment
    As you know from running your business, Input Tax Credits aren’t new. It’s the same system used prior to July 1. Before the HST, most businesses could only recover the 5 per cent GST paid on business inputs, but couldn’t get back any of the 7 per cent PST paid. Under the HST, most businesses can now recover the full HST paid."

    icon_wink.gif

    http://www.hstinbc.ca/running_a_business/what_to_know/


    thanks for this, meninlove. I have read your point of view but I still think the HST is better than the PST+GST system. I think after a few more years with the HST system in place everything will straighten itself out. Just my view on the whole thing.
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    Jul 11, 2011 5:03 AM GMT

    icon_wink.gif