Saturday, September 10, 2011

Repealing HST Bad Move

BC moves to eliminate the tax that would now increase the deficit. In fact the B.C deficit is now tripled. The big loss is of course the 1.6 billion BC now has to give back to Ottawa. BC is still moving to eliminate the deficit by 2014. BC could have a much easier time going into surplus if they would have kept the tax that would create jobs (over 100,000 in the next ten years), and would increase revenue. It seems that the HST was good policy, but the Liberals in BC are crazy over popularity. Even though 45% of people were in favor of keeping the tax. I mean take a vote of the G.S.T and the federal government would be lucky to get close to these numbers. I mean there is only a slight win in this politically, because many people who want the H.S.T gone are guess what with the NDP! There isn't much political gain especially for something that would have done a lot of good for the province of BC. It seems like BC are moving a few steps behind so far this year. I hope these Liberals get there act together very soon.

In his latest quarterly report, Minister Kevin Falcon says scrapping the HST will cost the province $2.3 billion over three years
"This includes $1.6 billion in 2011-12 associated with reimbursing the federal HST transition funding and a more than $700 million loss from lower tax revenue and increased spending over the three years ending 2013-14."
 Read more here

4 comments:

  1. The HST, you say, provides two benefits:

    1) increases government revenues;
    2) creates jobs.

    Sounds good to me, so repealing the HST must be a bad idea, as you say.

    BUT indirect taxes such as the HST are regressive and increase income inequality, while direct taxes such as the income tax are progressive and decrease income inequality.

    AND income inequality is the underlying factor in a host of health and social problems.

    SO consider doing this:

    1) modify the BC portion of the personal Income Tax Return, adding brackets for high-end earners with higher marginal tax rates;

    2) then tweak those high marginal rates to recover the revenues lost by repealing the HST.

    ReplyDelete
  2. I agree with what you are saying, but combining the PST and GST simplifies the tax code, and for many products they will be taxed at the same rate whether there is a P.S.T or HST. But most importantly you can't make up 2.3 billion by just taxing the rich.

    ReplyDelete
  3. Perhaps I misspoke.

    GST revenues (the federal portion of the HST) will continue to be collected and remitted to the federal government.

    PST revenues (the provincial portion of the HST) can replaced with equivalent revenues from a modified BC income tax.

    I suggest this as a starting point:

    -- low-income earners pay little or no increased income taxes
    -- middle income earners pay net-zero increased income taxes
    -- high-income earners pay the rest!

    The general point I want to make: BC ought to do an Equality Impact Assessment of all tax changes, in particular, and all legislation generally, ensuring that inequality is not increased.

    ReplyDelete
  4. i love the idea, but rich people can't bring in enough revenue to pay off the 2.3 billion, but I agree we should have equality when it comes to tax burden. This tax change would help bringing in some revenue and help pay some of the loss of eliminating the sales tax.

    ReplyDelete

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