Constructs

Economists tend to be like priests in the temple in their desire to hoard the information that might lead to a deeper understanding of how the world works. They couch their talk in arcane jargon and build mathematical models on assumptions of their own concoction, building spirals of circular logic that are increasingly opaque and obfuscatory. Ms. Clark will, today, pile on yet another layer in the quest to make wage earners transfer more of their income to the likes of Phil Hochstein and the developer class. Money is a fiction that has long since ceased to be a simple means of exchange of goods and services and has become, through the good offices of Straussians and the Milton Friedman Chicago School, a tool of greed and rapacious power. The real underlying notion behind the HST is that it will protect parts of the business sector from funding government programs without any guarantee of the creation of jobs, or the lowering of prices. Long live Ed Deak!

Thanks David,

For you consistent analysis of the HST in a factual and thoughtful way.

Rememeber 'Voodoo Economics'?

30 Helens agree some economists only serve their masters and are selected to bolster the arguement.Not all citizens are fooled; not all citizens are bamboozled!

David Shreck

You shouldn't be surprised, even defenders of the HST don't understand it. In fact, I think the only way the tax could be defended is if one doesn't understand it.

Ms Clark has said she wants to do something about the fact that the tax is taking more than the government thought it would so we can look forward to it being "fixed". Of course defenders of the tax are happy with it as is.

It amazes me that all these

It amazes me that all these wise and all knowing economists can't remember what happened when the GST was brought in 2 decades ago.

just in case the HST gets

just in case the HST gets voted down, i'm going around collecting money from old folks homes and little kids and migrant workers and random people's houses, and then sending it all to archer daniels midland or encana, or perhaps a small restaurant owner, so they can ease into the slightly smaller amount of kickbacks they might be facing. also i'll remind everyone that the referendum is important

Liberal liars

Last year, on the defensive, the Liberals claimed that they cannot change anything about the HST. The agreement with the feds is what it is and they are powerless to change it. Today, they will come out with some changes.

The biggest question is how often do they tell the truth about anything?

Thanks, David Shreck

Your article is cogent and timely. Thanks for doing this research.

The people of BC know that their wages and salaries do not go as far. They know that inflation is hitting them with increased energy, transportation and food costs. With the Carbon Tax added to the HST and those on top of the highest housing costs in the nation, people of BC have it tough. My street is populated with families that earn more than the median income, and a new car or truck has not been seen parked in a driveway for more than four years. The price of groceries continues to rise. The restaurants have been closing, and the coffee shops that were once thriving because people could no longer afford to eat in a restaurant are having difficult times. My neighbours hate the HST.

I hope...

Depending on the federal budget and what Clark comes up with, I hope people will vote a resounding "NO" on the HST referendum. If Clark reduces the HST down to 10%, guaranteed for the duration of her reign, if she gets elected, I might seriously think of voting "yes." If she were to do that, I might also seriously think of voting for her in the next provincial election.

So you believe another promise...

...from the liberals that she will reduce it to 10% IN THREE YEARS!

Horrible Article!

This is really and truly a horrible article. If anyone saw the pro-HST video being referenced by this article they would have seen the focus of the video was the clear lies being used by the Fight-HST camp. I have no opinion as to the validity of Kesslelman's study other than to say it is one of many studies on the subject. What is more important to me and should be to most of you are the blatent lies being told by the Fight-HST camp.

Why this is a truly horrible article is because it does not deal with the core issue in the video. It seemingly accepts the fact that Fight-HST lies regularly and instead disputes the validity of one study on HST. I would expect more from this author, you can't simply ignore a serious challenge by focusing on something else. I know that is what politicians do - but the author holds a PHD and should know better than to contribute to the confusion rather than providing clarity. Shame!

OK madrona...

...give me one lie David has told in the above article. Just one like we will not introduce the HST or it is not on our radar. The pro HST groups all tell lies by omission. They don't tell you all of the details about shifting cost and taxes. When somebody details it all you claim they are lying. O.K. then prove it!

madrona

The guy that did that video is more pro-BC Liberal than Christy Clark.

Oh the horror!

A man is walking down the street and sees another man wearing a vote liberal button repeatedly banging his head against a lamp post. When he is asked why he is doing this, he says, "Because it feels so good when I stop."

Skywalkers comment sure

Skywalkers comment sure sounds good to me. any yes the folks I know are ready to vote YES which means get rid of the HST and let's get back to the PST with the exemptions. They dump Christy and her gang of BC Bandits

Skywalker - read my comments carefully

Hi Skywalker, did you read my comments? I never once said David was lying. I said the video pointed out where the Fight-HST camp has lied. If you watch the video (please tell me you have) you will also see the lies. Even with the Force on your side, I don't think you could win Vander Zalm away from the dark side (seriously, the guy got caught lying on video a number of times - if you haven't seen it yet - watch it).

As for lying by omission, I guess you could say David was not completely honest in this article by the fact he did not address the actual substance of the video. Is that a lie?

Frank - I am not sure how you came to your assertion. Did you see this guy at some liberal fundraiser? I know you shouldn't trust someone just because of what they tell you... but he does clearly state at the begining of his video that he is not a liberal supporter. Maybe he is lying about which political party he supports but clearly he is not lying as much as Vander Zalm and the rest of the Fight-HST crew have about the HST.

Frankly (sorry Frank I couldn't resist), I am not really a liberal supporter either. However, I really can't stand the tone, rhetoric and lack of actual fact coming from the Fight-HST camp. It's kind of disgusting really.

Madronna

When you start with "this is truly a horrible article" quote some Pro HST video as a source, then I think one can assume you agree. Nothing in the pro HST camp addresses the real reason people are p o'd. So what if you don't like VanderZalm. Very few anti HST folks would vote for him but he at least got of his duff and did something about it so he's got my respect for that on this issue.

So I ask again what are the lies? How was he not completely honest. I have followed most of his articles dissecting the HST. David is far more accurate that a host of pro business types who are and will continue to benefit from this tax Also all the pro HST people will claim they don't support any political party. That is baloney. Does it mean they don't vote? It is a hollow statement because you don't know and the claim is an attempt to give themselves some credibitlty. It is a sneaky technique and means squat.

So Madronna don't talk about rhetoric because that is exactly what you are engaging in. Where are the facts you talk about.

Skywalker!

I am shocked! You can never assume anything. Watch the video, I insist - then you can start to refute the facts. Otherwise, I am having a conversation about rhetoric. FYI - read my previous comments they are free of rhetoric. Rhetoric looks like this "all pro HST people will claim..." (look familiar? it is from your comments!) You are a great sport and really I hope that my comments are helping you to think about the issue rather than just writing a bunch of angry meaningless words.

Voodoo Economics is not Keynesian

Just to clarify, Keynesian economics is the opposite of Reagan's "voodoo economics," which is the Friedman/Chicago school of trickledown economics and deregulation wherein what is good for consumers.

The high priest of contemporary Keynesian thought is Paul Krugman, a staunch advocate of progressive taxation, a higher corporate tax rate, and strict financial regulations.

Even the steemed David Schreck is wrong

David Schreck was a guest this past weekend on a radio show and he had to retract a comment that was incorrect regarding the HST.

Even the experts correcting the experts are unclear!

Well, he may be steamed

but I really meant 'esteemed'.

Um - pardon me!

What, precisely, did David Schreck retract?

I happened to hear him during an interview today and he made very fine mincemeat of the person who was defending the HST.

The fact Schreck made a mistake and acknowledged it seems pretty irrelevant in the light of the nonsense being spouted about what's wrong with this regressive tax.

Sales taxes are, by definition, inequitable and unfair - expressed as a percentage of the income of various classes of taxpayers it is a pretty simply matter to demonstrate why sales taxes impinge unfairly upon people from the working and middle classes.

One doesn't have to be a genius to understand this - even though it is completely obvious that the folks who considered it was a good idea to get the BC Liberals to back this tax were thinking about what would be good for them.

There was, as always, no consideration of what might actually be BAD for the majority of the population in this province.

No madronna

You are one making the ridiculous charges and engaging in rhetoric> I don't need to justify my position, you need to justify yours. Sending me to read more shite from the pro HST won't cut it. Just answer the points in David's piece with facts. Just one! Does it shift the burden of taxes away fro buiness and corporations, Yes or NO?

Too Bad.

Ontario brought in the HST and BC had to follow quickly because it was such an obviously sensible thing to do for the economy.

A few rabble-rousers in BC managed to win the public-relations war and convince many people that this was a bad thing. Not so in Ontario.

http://www.rev.gov.on.ca/en/taxchange/faq.html#q6

The idea that things will just go back to being the same if the government has to cancel this change, it's a silly dream. Ask the billion-dollar film production industry in BC and all the union workers in it.

The tragedy is this, if the naysayers win and the HST is canceled it will be the poorest that will lose out. Jobs will be lost and investments canceled. Rebates not sent out. All because some guys hate Gordon Campbell, even though he's now long gone!

madrona

"Frank - I am not sure how you came to your assertion. Did you see this guy at some liberal fundraiser?"

He was on the Vancouver Sun's chat. About every third or fourth comment is his. If he's unbiased then I guess I'm the world's most neutral observer.

"but he does clearly state at the begining of his video that he is not a liberal supporter."

Then he's clearly not telling the truth. Lots of people that support political parties aren't necessarily members of that party.

"Maybe he is lying about which political party he supports but clearly he is not lying as much as Vander Zalm and the rest of the Fight-HST crew have about the HST."

I have no idea what Vander Zalm says about the HST because I simply don't listen to him. So if someone wants to attack what he says, I don't care. Most of us against the HST are against it based on the facts and our own logic. I would imagine if anyone is influenced by the Zalm it would be those that voted for him in the past, I didn't.

"However, I really can't stand the tone, rhetoric and lack of actual fact coming from the Fight-HST camp. It's kind of disgusting really."

Then argue the actual facts instead of strawmen. The government itself said the HST revenue would be offset by corporate and income tax reductions. Most people in BC think that is ridiculous that they should pay higher taxes so that high income earners and corporations can pay less.

Now by all means tell me where I'm wrong.

realisticman

Ontario? here's a quote from the Conservative party of Ontario : "The HST has made life unaffordable for many families.". They go on to state they will remove the HST from hydro and home heating bills.

The Liberals and Conservatives in Nova Scotia are against the HST being increased and are on the record saying that that the NDP government should have cut spending instead.

I can't name anyone I know

I can't name anyone I know to be a supporter of the HST. It's going down and we have no intention fo moving from the province as the next project is dumping Ms. Christy and her gang of rogues. The promise of something a number of years in the future sounds very much like Harper talk.

Neoliberalism

At the core of the neoliberal agenda is the intent to offload the entire tax burden on to the backs of working people and perhaps the few remaining businesses that actually manufacture useful things - i.e. not FIRE (financials, insurance, real estate).

Critical to this effort are the Hayek oriented economists who shill for the neoliberals who sponsor them. Anytime a 'study' is needed to further the cause, some right-wing outfit like the Fraser Institute or the University of Calgary will come up with something that appears scholarly to provide credence to whatever snake-oil economic idea they're trying to foist on the public.

It's been a few decades now, most working people still show no signs of catching on to this scam despite their inexorable slide towards peonage and poverty.

Ok, time to get back to the article!

Thanks Skywalker and Frank for indulging me in a little jibber jabber. I guess I was just trying to feel out the crowd on this blog and get a sense of whether we are spinning talking points or having a real conversation!

Let me bring up my thinking on this article - and it is mine, not copied from one of the pro or con camps.

So if we follow the logic of the above article, we have one economist who writes a report and says there is a small but fairly negligible impact caused by the HST. Then we have another economist who disagrees with the formula used to arrive at this conclusion. This economist runs a bunch of random simulations to demonstrate that this formula is not the most accurate tool. This economist read the fine print that most of us discount when we look at a graph. The little disclaimer basically says - use data at your peril! Good enough, so CPI can give you a rough picture but it can't be used to give us a detailed analysis.

Great! So what does David's new graph tell me? Well the big picture... there was a recession in the early 90s followed by one starting in 2007 and now we are back to normal.

Interesting, this graph shows the recession ending in late 2009 with some recovery in 2010. That sounds pretty consistent with what we have heard over the last year. Ok so what was the impact of HST? I guess it is hard to tell with this analysis because it really doesn't show up. I mean literally - if it had an impact, it was pretty negligible compared to the impact of the last recession.

and a little bit more...

Ok so I don't claim to be an economist and maybe I am reading this thing wrong. But help me out here... where is the evidence that the HST has harmed the economy. All indicators seem to say, business as usual...

One last piece of food for thought. What had more impact on the BC economy, the 2010 Olympics or the collective bargaining agreement with Province's unionized employees? That's right it was the collective agreement. I bring this up because the more mundane things (things we really don't pay to much attention too) often have more of an impact on us than those that are front and centre. Like in the case of HST, we have seen drastic increases in non-HST products like groceries which have hit families far harder than HST... not to mention the price of gas over the last year which has risen by 30%. If we look at the whole picture, HST is a blip not a bump. I am sure that is why an economist or anyone else will have difficulty measuring the impact of the HST. I am afraid the impact is just not as great as some of the other big impacts we have felt to our family budgets.

At the end of the day, I would like to state my point of view. We were going to pay a tax one way or another. The HST administratively made more sense but did shift some burden onto consumers but on the other hand did make it much more attractive to be a small business owner (which I am). The recent "fixes" announced today make the HST a better tax than the previous GST+PST. I think it would be next to impossible to produce numbers to show that low to middle income earners would be better off if the HST tax is eliminated and we revert to GST+PST. In my mind, the government has largely taken the wind out of the sails of those who are against the tax.

The real question for those who remain opposed is whether they want to pay more tax to see the HST fail. Whether their "revenge" against the liberal government is worth taking away the benefits being offered to low and middle income families. There are bigger fish to fry in BC... let's get back to business and put this debate to rest. I say keep the tax the way it is and focus our energies on more pressing issues (climate change, child poverty, natural disasters, etc...).

madronna and skyhook

Skyhook,

unfortunately the bombastic (although quite colourful!) speech isn't doing much. While these online debates just elucidated the seemingly angry misconceptions folks hold on economists, taxation and specifically relating to the HST. Madronna is right though. As much as you can hate it, she's right to point out that this article simply mentions the [great] pro-hst video without addressing any facts and reasoning it brought to the table.

It seems the Anti-HST gameplan is to ignore any rational debates and stick to fanning the flames of ignorance with red herrings and misinformation.

Please! Watch the video (http://www.youtube.com/watch?v=nZXu3LXNwEg) and approach the debate in a logical way. We're not here to change anyone's minds. We're here to blowhard and make our insignificant opinions known. Hopefully though, enough "solidified" positions held by folks such as yourself will mildly decalcify by the time voting comes around.

Not at all let's be RATIONAL then

And actually LOOK at some numbers:
The point is simple, really.

SALES TAXES are unfair because they hit all payers with the same impact when all payers are not equally able to withstand that impact.

For taxes to be fair the impact of the tax has to be proportional to the ability of the taxpayer to absorb that impact.

Do a simple thought experiment.

Taxpayer A has an annual income of $25,000. and he spends $8,000 annually on goods and services which attract HST of $960.

Taxpayer B has an annual income of $100,000. and he also spends the same $8,000. on goods and services which attract HST of $960.

Expressed as a percentage of both taxpayer's income it can be seen how unfairly the HST impacts the taxpayer with the lower income.

Taxpayer A - 960/25000 x 100 = 3.84;

Taxpayer B - 960/100000 x 100 = 0.96.

No system which impacts the lower earning taxpayer almost four times as hard as it does the higher earning taxpayer for the exact same basket of goods can be called FAIR or EQUITABLE and anyone who suggests that it is is not telling the truth and not facing facts.

Pick any other set of numbers and the result will be equally stark.

No sales or consumption tax can every be fair to a society which is already experiencing increasing and unconscionable inequities in opportunity and income.

The pro HST video guy is working for the Smart Tax Alliance

Really. He's working for the Pro HST folks: http://ca.topmodel.yahoo.com/s/25052011/74/bc-ubc-student-uses-youtube-skewer-hst-opponents.html

offended

Thank you for enlightening me and this conversation. He joined the Smart Tax Alliance AFTER releasing the video. So... this video, which is great by the way, was shot by some unaffiliated guy with an opinion. Now that he has done the research... he has chosen a side. So... let's be clear, the video actually has nothing to do with the Smart Tax Alliance, they came into the picture AFTER the video and probably largely because of the video. Thanks for clarifying Frank's concern that he was a liberal insider. It appears he was not.

madrona

You're changing the parameters of the debate. Are you saying you don't want to argue about whether the HST is a bad tax and that instead you want to argue about whether its hurt the economy?

That's like saying we won't debate the morality of throwing poor kids in the ocean and that the argument should instead be on whether the economy will miss them.

The facts are the government said it would raise taxes on the consumer and offset them with cuts to corporate and income taxes. That the tax would be revenue neutral for them. Trying to argue about something else is what you pro-HST guys keep doing but the central facts of the matter remain.

"We were going to pay a tax one way or another."

How so?

"The HST administratively made more sense but did shift some burden onto consumers but on the other hand did make it much more attractive to be a small business owner (which I am)."

And consumers are thus taxed more so you can be taxed less.

"The recent "fixes" announced today make the HST a better tax than the previous GST+PST."

Yes they do, but they're only promises for a future that hasn't come yet. Also, they only deal with the problem of the government getting too much revenue since they said it would be revenue neutral for them. The new promises still don't address the central problem. Also, the new changes only came about because people knew they were right to oppose the tax shift.

"my mind, the government has largely taken the wind out of the sails of those who are against the tax."

Actually, the government has demonstrated that your side of the debate was wrong and Fight HST was right after all. Governments across the country agree the HST hurts consumers.

"There are bigger fish to fry in BC... let's get back to business and put this debate to rest. I say keep the tax the way it is and focus our energies on more pressing issues (climate change, child poverty, natural disasters, etc...)."

None of which the government addressed in the last decade so why would they start now?

madrona

"Thanks for clarifying Frank's concern that he was a liberal insider. It appears he was not."

Is this another example of how the pro-HST won't debate facts? I said he was a Liberal supporter, which he is, not a Liberal insider.

If you want to believe he only became a Liberal supporter in the past week then you probably still put old teeth under your pillow while waiting for the tooth fairy. He was obviously motivated to do the video to defend his ideology.

Campbell Should Have Known

David: I like your careful analysis--basically confirms my suspicion of the supply side faith behind the HST. I would like to see a debate between yourself and Jock Finlayson, which I think would be a fair fight.

Campbell learned in his first term that he could impose high costs early in the term and recover politically if the economy improved. He learned in the second term that he could even sell a politically risky carbon tax if he gaave rebates and lower income taxes in return. He tried to apply these lessons to the HST, but was insufficiently sensitive to the fact that he wasw massively shifting the tax burden onto workers in the middle of the worst recession in 75 years.

That being said, I am still somewhat attracted to a lower, broader HST that keeps the administrative efficiency of tax harmonization while reducing the unfairness. I'm not yet convinced that a 10% HST would be bad policy

Frank

He's not necessarily a Liberal supporter as you insist. He is an HST supporter.

r'man

Sure, just like Kevin Falcon was a middle-of-the-road guy with no political motivation when he attacked the NDP back in the 1990s with Total Recall.

Frank and G West

If we are going to have to pay tax... and we will, which tax is worse PST/GST or HST. I think the evidence now demonstrates that PST/GST is a worse form of tax.

G West's own argument proves how wrong he is. If A makes only $25,000 a year, how much of his money is being spent on items subject to HST? I spend $200/week on groceries for a family of 3 as well as $1,000 a month on mortgage not to mention $200 on property taxes. That is $24,800 on items on which I am basically paying no HST. So using your own example A pays virtually no tax but gets a rebate - so makes money and B pays all tax.

Let's get this straight - lower income earners spend less of their money (because they have less money) on items subject to HST. This is a progressive tax not regressive. If you still don't understand the difference pick up a first year text book on economics.

Frank - you are argument is so obviously flawed that it is starting to be tiring. Realistic man is right, the youtube guy supports the HST not the Liberals. Now if you can't distinguish between the two then we can't have a logical conversation. Because logic dictates that you can have one without the other and that neither alternative is dependent on the other (i.e. you can support the HST and not support the Liberals - it is actually possible!).

Liberal Lies

All I have heard from the liberals is that the HST is good for this province but all I see is my money leaving my pockets and going too pay added taxes. I was better off 11 years ago before Gordon Campbell got elected. Now the biggest lie is that the big corporations will take the money and give us back reduced prices now I don't know what they are drinking or smoking but I would like some too. My neighbour is a business owner since the HST has kicked in they have paid off their house and bought a new trailer and all the big kid toys ATVs new furniture and a new truck paid for by the money from HST that is supposed too be coming back to us with lower prices yea right give your heads a shake Liberals

madrona

"I think the evidence now demonstrates that PST/GST is a worse form of tax."

No it doesn't. The "evidence" is that the government says they are reducing taxes on some and raising it on others. Your taxes are being reduced and mine are going up therefore you love the tax.

"Let's get this straight - lower income earners spend less of their money (because they have less money) on items subject to HST. This is a progressive tax not regressive. If you still don't understand the difference pick up a first year text book on economics."

You don't know what a "progressive tax" is obviously. With the HST we all pay the same rate, rich and poor alike. That means the tax is not "progressive".

A progressive tax is income tax where the more you make the higher rate you pay. That means lower income people pay less income tax than high income people and they also pay less percentage of their income in tax. If income tax was like the HST, rich and poor alike would all pay the same rate.

"you are argument is so obviously flawed "

What evidence do you have that he isn't? Did you read what he said on the Vancouver Sun website? Or are you just assuming that he's not a Liberal supporter because you dated his sister or something? And you can apologize anytime for lying about saying I called him a Liberal insider.

"Now if you can't distinguish between the two then we can't have a logical conversation. "

That would be because logic is not your strong suit and you have an allergy to facts. Like most HST supporters.

no one wants to pay taxes

What I have understood from years of this stupid debate is one thing: no one wants to pay taxes. Everyone wants business to take more of the burdon, pro business says well if we take it on we hire less people and thus less employement. Poor people can't take on their fair share, rich people only want to pay for what they use not paying for others and the middle class gets a bit hooped.

Bottom line is no one has a balls to pay for the services they use. We are collectively happy to pay less now keep our nice services and pass on the debt to our kids and my generation of the 20 somethings. Regardless of the consumption tax vs progressive income tax debate we don't pay enough. If we weren't blessed with natural resources which we leach we would be Greece, except frankly Greece has a better chance at a tourism economy.

My point? How about ever stop B*ching about taxes grow a pair and pay off YOUR debt.

skeletor

If the 20 somethings would show up at election time political parties would listen to their concerns.

madrona

With respect, the example used an expenditure of $8,000 per annum for each taxpayer on things which attract HST.

If you can't see that it is entirely reasonable that each taxpayer in the example might well spent $8,000 (net) each year on the same basket of goods which attract an HST cost of $960 in tax then you're not living in the real world.

Might I remind you that British Columbians buy clothes and gifts, pay for furniture, appliances and home repairs - all of which attract HST.

Use your imagination a little. An annual outlay of $8,000 (net) for items and services that are taxed at the 12% rate isn't too hard to do.

Furthermore, you've completely missed the point about services which attract HST but were not taxed under the old GST/PST format.

I assume you haven't contracted for any home repairs lately.

But, at bottom, the point of the exercise was to try and illustrate to everyone how unfair sales taxes are because they hit the poor, working people and the middle class disproportionately hard while being pretty much of a laugh fest for the wealthy.

You do 'get' the fact that the lower income earner is hit 4 times harder by sales taxes than the higher income earner, don't you?

Skeletor

How about addressing the issue of what "fair" taxation would be and how one would reach a level of acceptance and understanding of what taxes are meant to provide. You started in your fist paragraph but them went on to the usual uninformed, inexperienced shotgun attack that wasn't worth the time to read. If "we" don't pay enough, then what will "enough" be and what is it to provide? You might come around to the issue we are dealing with.

G West - Not convinced

Please explain to me how someone who makes $25,000 a year would purchase $8,000 of HST eligible goods. I have stated why I think you are wrong and this is not possible. Please show me how you think it is possible.

Mortgage/rent (average rent for 2 bedroom in Vancouver) $1000/month or $12,000 a year
Groceries (average family expenditure on groceries) $200/week or $10,400 a year
These two items alone = $22,400 (on mostly HST expempt expenses) leaving only $2,600 ($312 in HST) for HST eligible expenses.

Please show me how someone who earns $25,000 would ever conceivably spend $8,000 in a single year on HST eligble expenses.

Ok one more point - if we only paid income tax and no value added tax, we would be picking up the tab for every out of Province person who purchased a goods or services in this Province because our income tax would have to increase to offset the lack of value added tax. While this might seem like a big deal, consider two things: tourism is big a component of our economy and two most tourist exclusively purchase items with HST whereas most British Columbians will spend less that 1/3 of their income on HST eligible items.

GW - one more thing

I forgot to mention the tax rebate! If you are making $25,000 a year you get some money back from the Province to cover the cost of HST. So in fact your argument is pretty weak.
A pays HST - HST Rebate= tax paid while
B pay HST and that is the tax paid.
So A is better off... umm, this means that this is also not a regressive tax because it is tiered. (Sorry Frank I am not an ignoramus - but I did make a mistake the tax is not progressive it is a proportional tax! - I have to admit it has been a decade since I took economics) Ok here is the down low, a regressive tax means everyone is treated the same - if you provide a rebate (which the government does) it is not a regressive tax, in this case it is a proportional tax (yikes - here I am bring fact to the conversation).

Thanks Frank - I am new to the Tyee blog - but not new to the Tyee. I have actually appeared in a couple of articles (but not about tax)!

Not an ignoramus either. right mpee

If I am to be taxed to provide support for those less fortunate then I want that to be clear and not to smoke screened by some ideological notion of making it better for business. Any business person who can't make a go of it shouldn't require my help. That is the first thing the government did wrong. They lied about it being revenue neutral and it turned out to be a tax shift and a cash grab as has been proven. They have tried every spin imaginable, first claiming it was for social services and then just going with we needed to protect our fragile economy.

Now when the desperation sets in the tinker with the referendum question, then they tinker with the rules of fairness in campaigning and now they bribe the voter with a promise of relief after they have got all their cash.

I sense a con. They can't afford to lose the cash because the budget is a mess and if they go into the next election that way then the NDP will do to them exactly what they did to the NDP. Even the MSM won't be able to cover their fiscal incompetence.

So all the details are just a cover to get the liberals elected. If they get approval then you just imagine what comes next because lying and cheating are just fine. The only way is to reverse this mess to the beginning. Start over. Figure out what the GST was costing and transfer that to business taxes in another form and delete the GST. Then if you need more go to the legislature and debate a tabled budget and don't come to the average income earner with more consumer taxes to feed more liberal boondoggles. Business will get use to it. This constant whining by business and assorted liberal government hack is self-serving. IT is like they want to be in business but they sure want subsidy from the taxpayer. That is plain silly.

None of it is rocket science but they try to make it sound like they are the only ones smart enough to understand.

David Schreck - Correction

You are being very disingenuous in the following statement: ".....the HST is costing families as a result of the $2 billion cost shift: businesses no longer pay PST...."
You know as well as anyone that the PST paid by businesses was included in the price the consumer paid for the product. To argue otherwise is nonsense.

madrona

Single persons with incomes of $25,000 get not a penny of the $230. HST rebate. You can look it up.

I think you need to do a little more reading my friend - $8,000. is a perfectly plausible estimate of the net value of HST rated goods and services which a single person might easily spend in a year.

But, that's really NOT the point I was trying to make although it's a perfectly valid example - what I was trying to illustrate is how fucking unfair and inequitable the HST is.

IT HITS PEOPLE HARDEST WHO CAN'T AFFORD IT.

I don't care what amount you use to do the calculation, use $6,500. if you like and you'll find that, just as was the case in my example, that the impact of the tax on that expenditure is always going to be four times greater on the person with the lower income.

THAT'S WHAT'S WRONG WITH IT - AND THAT'S WHY YOU SHOULD VOTE YES ON JUNE 24. That’s why it is unfair and inequitable and regressive – BY DEFINITION.

Unless, of course, you make significantly more than the median income in this province - in that case, vote NO and happily continue to screw with the lives, the happiness and the futures of the vast majority of British Columbians who are struggling to put food on the table and pay the rent.

That's the choice people have to make - and only in British Columbia do we have the power to make that choice AND MAKE IT STICK.

Oh madrona

I forgot to deal with one other error in your post - if the HST is voted off the island we go back to the status quo ante - that is, PST and HST - no different from what was happening before this whole boondoggle started.

Did you forget that?

And your last point - about visitors not paying their way if we had no sales taxes - and how that would make our situation here worse...I take it you're not familiar with Alberta.

That province has no sales tax at all - I haven't heard of any Albertans screaming for it so they can reduce the income tax they pay.

Let me know if you've actually met any of them...I'd remind you that your argument also flies in the face of neo-liberal orthodoxy.

Remember, reducing taxes always creates jobs and investment.

brave madrona

A day or so ago you said:
"At the end of the day, I would like to state my point of view. We were going to pay a tax one way or another."

Then you said a few lines later:

"The real question for those who remain opposed is whether they want to pay more tax to see the HST fail."

You'll need to reconcile those two statements for yourself, but the truth is in your first comment. We're going to pay anyway, no matter what. The whole point of this vote is to make the way we pay fairer to society as a whole. Nothing you or Vanderzalm or some youtube video says has changed that.

And in the same post (boy that was a rich one, for you!) you also asked:

"But help me out here... where is the evidence that the HST has harmed the economy. "

Rhetorical question, was it? Daniel Boloud closed Lumiere and DB Bistro Moderne because of the economy, the HST and the 0.05 drinking law. There are nearly another dozen restaurants closed in my area within the past year. Vancouver does have some cyclicality to its food service, but never, and I mean never have I seen two closed restaurants in the same block!

By the way

Your property taxes now have HST included in the amount you pay. It's not broken out, but the municipality has now become an end user, and there's no place for them to pass the HST along and receive a credit. Just like hospitals and schools (both of which may apply for credits of up to 63% of HST paid, by the way) municipalities don't qualify for that same kind of break.

That's hit all municipal budgets hard. Higher taxes or service cuts are the only solutions, because municipalities are not allowed to run deficits by law.

skeletor

"What I have understood from years of this stupid debate is one thing: no one wants to pay taxes. Everyone wants business to take more of the burdon, pro business says well if we take it on we hire less people and thus less employement."

Well, someone's winning that argument. See BC Budget 2011-12 at:

www.bcbudget.gov.bc.ca/2011/bfp/2011_Budget_Fiscal_Plan.pdf

You'll see under the revenue side, that personal income taxes contribute $6.1 billion, corporate income taxes contribute $1.6 biilion and sales taxes (now to be borne almost completely by the individual and scarcely at all by the corporation) was to contribute $5.8 billion.

Nearly $12 billion contributed personally against $1.6 buillion contributed corporately. Does this sound like a fair fight to you?

The other part of the qeustion that nobody's talking about is: what will corporations do with the money they save on taxes? I submit (and many economists are in agreement) that it will not find its way back to BC in the form of investment, training or jobs.

GW Some Good Points

Hey GW I am going to concede some of your points - I mistook the single for family tax credit (it was never stated in your argument but I should have worked from that assumption). So no credit applies.

The gist of my problem with your comparison was twofold and I probably should have come out and said it at the front:

1. %of fixed vs. variable expenses as a proportion of total expenditures - I am proposing that as you make more money fixed costs (for which HST does not apply to most i.e. housing and groceries) becomes a smaller portion of your expenditures. At the low end of the income earning spectrum, your fixed costs are likely to represent a larger portion of your income.

2. Total $ as a proportion of income. Since the % of fixed vs. variable expenditures is likely to shift slightly as you earn more and we express this against income, the more you earn, the more money you will have for variable expenditures (which are more likely to be subject to HST).

My issue with your example is that it does not reflect the impact of income on ability to expend. As someone who regularly reviews this kind of analysis, it felt like a first stab to identify that there might be a problem but not enough depth to actually demonstrate where the problem is.

This is my last post so I want to make sure I leave you with something of value. The challenge low income earners face (yes, I have studied and worked in this area for over a decade so I am not making this up), is an issue of rising fixed costs (housing, groceries, fuel) compared to the rate of income. When we compare the impact of those three elements, they have a far more significant impact on an individual's budget. As I was trying to allude to in a previous post - if you really care about low and moderate income earners, forget about this tax (it is not the big fish) and focus on more important issues around reducing the cost of fixed expenditures.

one more thing...

I can't resist GW. Why don't Albertans care that tourists and others don't pay PST in their province? Because they don't see it on their income tax!

I have to admit, I was flying by the seat of may pants for a lot of the posts - but I did check this one out. Natural Resource Revenue (Oil) accounts for $8 Billion of government revenues in Alberta, in BC they account for only $2,54 Billion. We have a larger population. I could say more, but you get the point... oil revenue offsets goods and services tax. So the solution in BC may be to drill like crazy and hope to find oil... or accept the fact that we have to find the money somewhere else.

Thanks all - it has been great, hope to see you on a future post.

madrona

I guess this means you don't want to argue about the problem of the HST being a tax shift?

"if you really care about low and moderate income earners, forget about this tax (it is not the big fish) and focus on more important issues around reducing the cost of fixed expenditures."

This is a diversion. We voted against this government. We voted for a party that was going to put the problems of low and middle income earners ahead of high income earners and corporations. Its a little bizarre to claim that its up to NDP voters to fix the problems of the world when we're not in power.

Why don't YOU and the Liberals fix them? Isn't that why you wanted power?