Economists !

Thing is that when I compare what Kesselman says and then what Schreck says, the numbers that Shreck provides are closer to reality. Of course business wil;l support the HSY as such is to their advantage, but that advantage is consumated on the backs of the common person. For people on fixed incomes or modest revenues, the HST in any form is just a total disadvantage, Home repairs/maintenance, common hygenic needs, and a host of other HST punishments are just not sustainable. The simple I want to sell Jake my old car, that now demands tax, or other private sales, the hideous taxation on house purchases and onward to the Property transfer tax, the tax on legal fees, realestate fees etc ... taxation never stops.

Kesselmann just does not get it! Schreck does understand the cause and effect to the common person that is for certain.

typo - Michael Smart not Micalheal

Sorry for the typo in the heading for my reply. Michael Smart's Ontario study is worth reading as it admits weakness in the method and it dicusses the consumer price index in details that you won't find in many places. Please read my response to Smart as well as his article and compare that to Kesselman's advocacy for the HST.

My article on Smart and links are at http://www.strategicthoughts.com/record2011/HST_Smart.html

There are limitations

...to using the CPI to measure secondarily an impact as Kesselman has done, but it's the only tool we've got. One has to respect the work he's done here.

...even as I note that my phone service has gone up by 3% and not come down at all as "input cost savings are passed along by business to consumers"

New housing is a notoriously bad example to use, and if I read Kesselman properly, he notes no change in pricing, indicating no savings to consumers. Builders will always seek to extract every last bit of profit out of their projects, and decisions to reduce prices are made more on the cost of money to financing the project and indeterminates such as length of time on market, period of year, quality of finishing, location, etc. I am sure Kesselman will not be able to find any savings being passed along to consumers in new housing in the forseeable future, and one can only assume that the new house HST rebate acknowledges that. that would make it... a subsidy to builders as far as I'm concerned.

My morning coffee and muffin went up last July and hasn't come down. I'm not holding my breath. Unfortunately, the poorest among us don't have a lot of money to go on, so this impacts them significantly in a negative way, Kesselman's mitigation proposals notwithstanding. You can't claim a tax credit if you don't have an address or don't file a return. And most of our several thousand homeless binners don't.

zalm

Its not just the homeless, there's lots of low income people who don't bother filing tax returns because they don't see the point. Its why the government prefers to offer tax deductions, they know much of it will go unclaimed.

So a 2% cut in HST will last how long?

It will bounce back up again after the next election. We know that. Suckers, aren't we?

Basic facts

I don't care how many economists or politicians try to explain or disect this TAX SHIFT. The basic facts are:
a. the liberals did not have a mandate from the voters to institiute it.
b. they forced debate closure.
c. they have been lying to us from the beginning. Prices are not going down. Inflation is rising. The poor are getting poorer. Companies are reaping larger obscene profits. And the government is running scared even after bribing us with a one time rebate on an excess that will continue year after year.

VOTE YES TO EXTINGUISH THE HST.

Typical economist hot air,

Typical economist hot air, in the dream world of imaginary monetary values, totally divorced from realities.

We now have to pay HST on a long line of necessary products, like foods, that were tax free before.

When we take cattle for slaughter, we now have to pay up to $50. HST, depending on the weight, we didn't pay before. The same goes down the line, acknowledged by the government, offering rebates, the same as Mulroney's GST tax racket, buying people's uninformed support.

And the sole purpose of these frauds is to permit our "wealth creating foreign investors" to take more and more, then bring it back to inflate real estate prices and buy up more of the country from under the citizens' feet by non residents.

Between 1955 and 75 the inflation rate was under 100%, but in the next 20 years, thanks to braindead advice by miseducated, neoclassical economists, and deregulated money creation powers by banks, inflation was over 1,000% and growing.

So, where is the logic in following the advice of any of them?

Ed Deak

fish counter

Doubly so - considering that all we have from Falcon is a "lick and a promise" - and that, barring really nasty revelations, there will be an election this fall.

not only hot air

Forget the hot air, this guy is dreaming in Technicolor. Look Mr. Kesselman, with all due respect to your degree, I have been in small business for almost 40 years.

Not once, not ever, have I passed any “business savings” or “tax dept savings” onto the consumer. I am struggling to understand why you would presume anything different from human nature in business.

The offset of any pass-through of the business tax savings to consumers is complete presumption on the writer’s part and naive in my opinion.

Consumer taxes are regressive to the economy. VAT is added to goods. The consumer objects; the protest is to put the wallet in the pocket. Consumption drops, along with government revenues for programs and services.

The tax is increased to bring the revenue levels back up to cover for programs to continue. These types of taxes cause inflationary pressures. As so the circle continues…..why can’t economists understand and recognize this fact? Even a dummy like myself can see this far ahead….

If I have money in my wallet I spend it. If it is taken away in taxes I don’t spend it on goods and services. What the hell is wrong with understanding these simple facts?

The 2% shift(loan) back to business is going to be paid back once the HST becomes law. The rate will be set by the feds. Not a question of if the tax is raised but when.

Piano.... is correct. Tax

Piano.... is correct. Tax cuts to businesses are never passed on. I've been in independent businesses in BC since 1957.

The little guy has a hard time to survive and big business demands constantly increasing profits to please the stockmarkets that demand it, or their stocks drop.

What benefits have the customers, or the employees, of the Royal Bank get from the $45. million yearly salary of the CEO, or from any from John Manley's 100 Chief Executives, with an average of $5. million yearly takes.

And not "earnings".

Hopefully, the world will one day wake up and demand answers to the incredible damage done to humanity and the ecology by the von Hayek/Friedmanite garbage being taught in our universities as "economics".

How about an article on the damage done by and the consequences of overcapitalization ?

Ed Deak.

The pro-NST crowd have short

The pro-NST crowd have short memories; they can't remember 2 decades ago when the GST was brought in.

Results Need Independent Confirmation

As an accountant, I look at numbers like Kesselman's from a little different angle. He knows that CPI numbers especially by province are subject to more statistical variation than national numbers. When we start taking differences this variability is magnified even more. His study does not prove anything except that these rough numbers seem to support an hypothesis that he is trying to prove.

We accountants often work with estimated numbers and we "prove" they are reasonable by setting up alternate ways of getting to the same answer. In this case there really is no other gross estimate of prices other than CPI. However, if the trend indicated by CPI is true we should be able to find many observations of prices that have been reduced expressly because of the HST. So step #1 go find a bunch of prices that have fallen. Step #2 talk to the seller and find out why. You don't need to examine every price just a sample to confirm your trend is valid.

Next look at the composition of the PST tax savings. Could they logically be passed on to consumers. First remove exports. They represent at least 1/3 of the savings. I say at least because although exports are about 1/3 of BC's economy the are likely more heavily weighted in the PST savings.

Next look at the categories of non-exports. Construction is about 1/2 the total savings or about 3/4 of non-exports. Most of those savings are heavy construction - roads, bridges not homes. Savings on those go to the government not consumers. There are probably other categories that are similar.

That would mean my "giggle test" number is saving pass through of around 25-30%. If the study shows 80% there must be something wrong. If I can't identify example price cuts, then the CPI approach may give invalid results.

I am not an economist but I like numbers that make sense.

It was suppose to be so simple.

Remember the first press conference by Campbell announcing the GST. It was all suppose to be so simple. Now having been caught in lies and deceit the liberals provide us with a lot of smoke and mirrors to convince us that the HST is good for us. Funny hoiw every time I buy something, i notice I am paying more and it isn't just a bit more. Nothing has become cheaper.

All this just tells me that it is time to start over. Gary is right. Vote yes!

Thank you, Jon Kesselman.

I've long thought that David Schreck's concept of "economics" has been a little bit skewed.

As much as anecdotal evidence is important, and the stories of average British Columbians are good to hear to understand impacts of policy, a good economist cannot possibly ignore facts and figures and replace them with an emotional argument.

For example, in the case of the HST - with all due respect to all BC-ers - you cannot possibly believe an anti-HSTer who shouts and complains that she/he pays 'THOUSANDS more per year' when they can't explain exactly what that tax is being paid on. Really? You're suddenly spending tens of dollars on things that were previously exempt? Restaurant meals, haircuts, etc? Implausible.

I encourage everyone to look at the facts and the real numbers of the HST in making their decision. The question is simple: do you want to pay 12% PST/GST or 10% HST?

Thank you, Jon Kesselman - #2

Correction: *spending tens of thousands of dollars :)

we the people...

I would like Prof. Kesselman to know that I have studied(BGS) at SFU, on Burnaby Mtn.and am aware of the "Ivory Tower" syndrome of academics who may be prone to reworking theories from tabled statistics.
I believe it's time to sharpen pencils and do some field work. As historians have reliably been prone to do; investigate primary sources ,ie; meet the people to document anecdotes and household records to analyze the evidence,known as longitudinal records?. This is a longstanding principle at SFU; to go out to communities to service/investigate.
Indeed, Prof. K states "having well grounded estimates of the consumer impact of B.C.'s HST...is essential to public debate over the new tax".
I very much agree and as a canvasser for "Fight HST" a year ago, I found people wanted discussion and they shared anecdotal evidence readily of hardship in regard to massive expanse of consumer items to be newly included into taxation from much fewer items under the previous GST.About 8% of the doors I knocked on declined to sign the petition against the HST. The other 92% treated me like a hero.
Professor Kesselman predicts that there will be GAINS in regions of high unemployment in future due to "export oriented resource industries over future years" Are we to believe that selling off raw energy(gas,oil,water) and materials(logs) is to be preferred over value added(manufactured enhancement of primary resource)consumer goods? Professor Kesselman might agree that most economists would disagree!
Lastly; I cannot believe Prof. K's analysis that my HST(weekly tax contribution) amounts to approx. $300. a year. I am not a big spender; in fact being retired,I find that because of the massive increase on taxable items this past year(July 1,2011 coming due) I have totaled about $300. in 4 months. That does not include any "big ticket items",just a small eco-friendly electric lawn mower. Prof. K needs to talk to the real live citizens for a true accounting!

the bc liberals win, again

The super slick and super slimy manipulators in the BC Liberal Party have shifted the debate onto home ice and they will surely win. The debate should be about regressive vs progressive taxation, but they've got us arguing amongst ourselves about the merits of a totally disagreeable regressive tax. And they're financing their underhanded campaign with our money. Keep the workers at each others throats and the real issues will be swept under the carpet and the rich will continue to get richer. The head cheerleader for the BC Liberals is a nasty piece of business and despite being a total air head will likely win the next election. Doesn't say much for the average voter, either!

Prices down?

I don't think so. At the end of the day, I have less disposable income, despite cutting back on things like restaurant meals, clothing, food (some items ARE taxed), and upkeep on my home.

It even costs me more to get my septic tank pumped out because of the HST.

There's a joke in there somewhere but this isn't funny.

We're taxed to the max while millionaires with 2 kids under 18 are gonna get a $350 cheque from their buddy Christy.

Looked at practically it is simple. HST hurts the economy

TI quoted;

“I encourage everyone to look at the facts and the real numbers of the HST in making their decision. The question is simple: do you want to pay 12% PST/GST or 10% HST?”

The above quote is the typical oversimplification of the problem that pro-HST people have been chanting lately…even Falcon himself asked this question in the Leg.

Here is a question for you to answer. I am doing a 10K reno on my bathroom. Do I want to pay $500.00 GST or would I rather pay $1200.00 HST?

So I am not doing the reno now. Like I stated previously, my wallet goes into my pocket and the work is lost to the business world. The tax is lost to the government coffers. Construction workers work less because of this decision.

Are you moving? Well, instead of 5% GST on shifting to the new residence it is now 12%. The cost of the move just went up by 7%.

Need some more examples??

Yeah for debating

Great to read this debate rather than just having one side or the other.
Informing rather than indoctrinating should be the goal of news sites.

Schreck has never let facts

Schreck has never let facts get in the way of a good story.

Faith Based Economics

Boy am I tired of the U of Calgary/U of Chicago Milton Friedman economics. The HST has cost us more to live. And using our money to tell us that isn't so isn't working. Harmonizing the two taxes makes sense, but the rate should have been lower from the get go. And saying you'll lower it by 2014 to try to get elected is another cheap trick. Do you think we're stupid?

Canary "That does not

Canary
"That does not include any "big ticket items",just a small eco-friendly electric lawn mower. Prof. K needs to talk to the real live citizens for a true accounting!"

I believe that a lawn mower was subject to GST/PST @ 12% VS HST @ 12%

The question IS simple.

Do you want to pay what you were paying before HST OR do you want to pay more at 12% or 10%? That's a no brainer.

Neo-liberal economists and taxes

One has to be very skeptical of any economist who favours tax cuts that apparently induces the business sector to invest and/or pass long its saving to the consumer.

All through the 1990's we heard the drumbeats for lowering corporate income tax, especially at the federal level. All of the usual suspects - the CD Howe Institute, the Fraser Institute, the banks and the corporate papers like the NP and the G&M - all played their part. And they won; we've seen federal corporate taxes cut by a third, and many provinces have gone even further.

Except there's a problem. The improvements in productivity, competitiveness and employment, which were the supposed outcomes of these tax cuts, never materialized. Indeed, globally speaking, our productivity is worse, a situation lamented by a mystified corporate sector:

http://www.td.com/economics/special/ab0610_productivity.pdf

What we got instead was a glut of corporate profit hoarding [http://www.theglobeandmail.com/news/politics/corporate-tax-cuts-dont-spur-growth-analysis-reveals-as-election-pledges-fly/article1972599/], outrageous CEO benefits and mergers. And a country facing debt and rising inequality.

So the HST efficiencies will be passed along to the consumer? Only a chump would believe that.

Just a quick point Mr Kesselman

Who paid for your study?

Spendings thousands as result of HST

I had an interesting conversation with my brother on Saturday. He told me that he was spending at least $1000.00 as result of the HST. I asked him to tell he how. He said that he spends on average $400 per month eating out with his family. So I conceded that he is paying $350.00 more in HST. I asked about the additional $650.00. He said gas, we know that hasn't changed except for the fluctuation in prices. He said parts for his cars, he spends a lot because be likes to buy junkers and fix them up - a hobby. I told him he previously paid PST so no change. He then said groceries but I told him that most were not subject to HST and if they were, then he previously paid PST on them. Eventually, his only comment was that groceries have become more expensive and he conceded that it wasn't because of the HST but inflation itself. So in the end, he is paying $350 more a year in HST but both his daughters are entitled to credits so its a wash. He's now a convert especially since with the decrease he is going to be paying less consumptions taxes than he was under the old system.

Where are we now?

Kesselman says the CPI evidence says companies pass much of the HST savings. Schreck says his evidence could just be random fluctuation, and none or little of what companies save they may be passing on. Smart's evidence mirrors Kesselman's, but it could too be random. So what do we believe?

To me we have 1) economic theory, which says in competitive markets the savings will be passed on and 2) two studies which may be meaningless, but may also be true, saying the savings are passed on.

Many of the arguments against the HST could be made against any consumption tax. The CCF opposed the introduction of what became the PST in 1949. Consumption taxes reduce what consumers -- read, ordinary working folk -- can consume. The CCF thought, and the NDP thinks, and I agree, a highly progressive income tax is fairer. Let's do away with sales taxes completely!

Unfortunately, in all practicality we can't, on a continent where we have a nation below us with low income taxes. To replace the consumption tax with higher income taxes would double the provincial income tax rate. Imagine the protests. Likewise, to raise the corporate tax rate to replaces the sales tax (around 12 points) would indeed chase some business out of the province.

Now if only we had the tar sands in BC and oil under the ground, we could do what Alberta does, avoid a sales tax altogether. Of course Alberta is spending it's heritage now, not worrying about the future when the oil runs out, but, hey, you only pay 5% in Calgary.

It seems to me that if we have to have a consumption tax... and the choice we're facing is not HST or nothing, but HST at 10% or GST+PST at 12% (with more exemptions)... if we are to have a consumption tax it should distort the economy as little as possible. Every economist I know (except maybe Schreck) will say the value-added HST does is better on that account.

I am concerned about what the PST will do to manufacturing in BC if manufacturers can't pass their tax cost on, especially when Ontario and other provinces have gone to HST. Manufacturing jobs are more likely steady, good paying, and union.

Let's say we get the HST (after two years) at 10%. The province may need more revenue. A Government could increase it back to 12% -- but do you think politically that would be feasible? Once down to 10%, it will stay at 10% for some time, I think. So from where will the money come? I would hope the income tax.

No one likes any tax. But I do hope that our distaste for all taxes doesn't blind us to the task of choosing the lesser objectionable one.

I'd further like to challenge Professor K's assertion

I'd further like to challenge Professor K's assertion that there have been enormous 'savings' to business as a result of eliminating the PST and substituting the HST.

He claims that there were huge amounts of PST being passed on to customers prior to last July 1...which is passing strange since one of the things which pro-HST government spokepeople have been asserting from the word 'go' is that the impact of the change in taxation protocols would be revenue neutral (read no change in tax revenue collected) in the hands of government.

One of these claims must be wrong.

Either the PST was not a significant factor in business and consumer prices OR the government was lying when it claimed that changing things would make NO NET difference.

Furthermore, I was more than a little interested to see the following commentary from Ed Turner, a former Director of Consumer Taxation for the province.

You might be interested too:

http://www.bcgrea.com/pdf/The_Pen-Spring-11.pdf

TI

Ever heard of the "cascade effect"?

mumbojumbo

So I read through this entire article and almost wish I hadn't, why is the HST no longer the simple tax the Liberals first claimed it would be? The old saying "if you can't dazzle with brilliance then baffle with Bull S*** " definitely fits here.

Personally the HST is costing me much more than the old but as a business it has a small benefit that cancels out that loss so I don't care which way the vote goes. What I do care about is Gordon Campbell and his crew of pathological liars lied through their teeth to us about the HST before the election and ever since. How then can I believe one damn word these guys utter now?

Christy Clark may be prettier than a pink pig with a blue ribbon but she is still leading group of lying snakes. Scrap the HST, get rid of these sidewinders and lets start over.

I think there's another very good reason

I think there's another very good reason to vote down the HST - perhaps, in the end, the

MOST IMPORTANT REASON OF ALL.

The fact that the BC Government is even deigning to give voters a 'choice' is a unique and important event in the democratic history of this province - in fact, it's a significant event in the history of democracy in this country.

I do not believe for a moment that the citizens of Ontario, for example, would not have taken advantage of initiative legislation to challenge the decision of the Ontario Liberal Government to adopt the HST if they had had in place such a law.

For the first time – and on the initiative of citizens themselves – a duly elected government in a Canadian jurisdiction has been forced to back down on a decision which fundamentally affects the lives of every citizen of British Columbia.

This is a unique moment in Canadian history – it is vital that British Columbians now take this momentous event to its natural and logical end and reject the HST once and for all – not just because extensions of Sales Tax (without considering all the inequities and unfairness of the rest of the tax system) are fundamentally regressive but BECAUSE IT IS WAY PAST TIME THAT GOVERNMENTS IN THIS PROVINCE AND THIS COUNTRY SHOULD BE REMINDED THAT THEY GOVERN WITH THE CONSENT OF THE PEOPLE – NOT IN SPITE OF IT.

Why are we still listening to neo liberal economists?

Didn't they just finish ruining the global economy?
Where's the big rethink that supposed to come out of real life evidence?
These guys shouldn't get out of the penalty box so quickly.

"He's now a convert especially since with the decrease "

What decrease. It is not in effect yet. Boy is he naive!

Poverty

This is a lovely example of trying to make theoretical and unworkable economics work in the real world. He should understand that the problem is regressive taxation hurts those who live at the lower end of the socio economic scale. He seems to think that it is okay to make them pay a larger percent of their income in taxation when it could be used to buy additional food or pay a bill on time so they don't have to pay the 'late fee". Mr. Kesselman should come down off the mountain and ask the people living hand to mouth and pay cheque to pay cheque what they think. His skewed reality has done so much harm to average people, it really sickens me that people who still adhere to the Hayek/Friedman school of economics are still allowed to teach that claptrap.

ProHST

Your brother better hope he doesn't need any labour done, such as for home renos or anything else.

Also, the cash payments are this year only.

In the end, he's one of the people who will be paying an extra $2 billion in taxes. And unlike with income tax the money won't be going to pay for healthcare or whatever, most of it will be going to lower the taxes that business pays.

If he's happy being poorer he'll love the HST.

DNA

Well the whole world has turned upside down since then hasn't it?

Case in point, when the federal Cons proposed to reduce the GST rate from 7% to 5%, the federal NDP opposed same.

The Nova Scotia NDP government increased their HST rate by 2% to 15% - the highest in Canada.

During the recent federal election campaign, Jack Layton went to Nova Scotia and stated that the 15% HST was acceptable!

How progressive!

FWIW, the only political party in BC whose platform includes removing this "regressive tax" is the BC Conservatives. With them the HST rate of 12% (5% GST + 7% PST) would be reduced to 5% HST - with the elimination of the PST entirely. Now that's progressive!

Back to the beginning

There has been so much analyzing and theorizing by so-called economic experts, that all they have succeeded in doing is make something that was crystal clear anything but.

On July 23,2009 the Office of the Premier and the Ministry of Finance issued a news release about the harmonized tax. In this missive it is stated that "It's estimated the HST will remove over $2 billion in costs for BC businesses".

We were also told by both Gordon Campbell and Colin Hansen that the revenue from the HST would be revenue neutral to the government's coffers.

By these two statements one must conclude that the 2 billion plus dollars that businesses would save would be made up by the taxpayer. Considering that BC's population is around 4 million people, one must assume that the average extra cost per person is $500.00 per year. Even if one accepts the findings of the Dinning report that stated that business would only be transferring $1.3 billion onto the backs of consumers, that works out to $325 per person per year. Whichever set of numbers one wants to use, the bottom line is that consumers are getting hosed.

To make matters worse, the government has been crowing about the fact that 1.1 million people are getting some sort of relief from the HST, which means that the other 2.9 million people are being impacted by more than the $500 or $325 to make it neutral to government, depending on which set of numbers one wishes to accept.

Any attempts by any economist, politician or anyone else to pretend to quantify the effects on the average family is futile and as credible as the promises Bernie Madoff gave to his clients.

In my opinion, the government, economists and any other proponents of the HST have employed misdirection to confuse the issue. Ultimately, each person that has a vote on this issue must forget all the white noise put forth by the experts and use their gut instincts in deciding whether this tax is fair to their particular situation and vote accordingly.

I don't really care about how this tax was brought in, but I do care how it will affect me financially, and I will be voting "YES" to get rid of the HST.

TI and others ask..

"The question is simple: do you want to pay 12% PST/GST or 10% HST?"

That is not the question. The question is do we want to pay a Value Added Tax (VAT) that allows businesses to reap more profits on the backs of we the consumers?
The answer is no. We ask that everyone pay their fair taxes. Not have some pay for the benefit of others.

Just have a look at what's going on in Greece. The country is broke and it's beyond repair. Why? Because they instituted a VAT and people started going underground and not paying taxes. So the government jacked up the VAT and more went underground. Now you have most of the country owning expensive houses and driving around in limos and the country can't operate. It has no income and the EU is not going to give them any further money to help out.
The most omportant thing to remember in our HST is that BC is giving away our right to tax ourselves and the Federal Government will be able to adjust it (upwards) whenever they need money. And we won't be able to do a god damn thing about it.

Luke

"During the recent federal election campaign, Jack Layton went to Nova Scotia and stated that the 15% HST was acceptable!"

Oh come on Luke, you're either not reading what I've told you before or you're simply being purposefully political.

The HST in Nova Scotia is not "revenue neutral". The government did not cut income and corporate taxes while raising the HST. The government raised the HST in order to balance the budget and not make cuts. Both the Liberals and the Conservatives are calling for program cuts to get the budget balanced.

In Nova Scotia its not a tax shift, its a tax increase. That's important and is completely different than what happened here in BC.

And I hear federal Liberals want you guys to stop acting like this and instead stand for something? if so, why not defend what your Nova Scotia Liberals are calling for? Cuts to health and education.

More Luke

"FWIW, the only political party in BC whose platform includes removing this "regressive tax" is the BC Conservatives. With them the HST rate of 12% (5% GST + 7% PST) would be reduced to 5% HST - with the elimination of the PST entirely. Now that's progressive!"

That is progressive except for one little thing. Where's the balance? Will it come from program cuts? Which would mean its not progressive at all. Or would it come from raised income and corporate taxes? Which I would agree with and which would mean their tax policy is progressive.

You can't reduce everything to a soundbite, analysis is required.

Shills for Big Business (aka 'Smart' Tax Alliance)

Mintz is just a shill for Big-Biz. If we followed his logic, we should not only reduce the corporate tax rate to zero but increase the GST by another 5% and give all the proceeds to the same gang, who "provide us all with jobs". Once we have restored feudalism in our society, we should ensure that only the children of the corporate elite should inter-marry to maintain the purity of their superior genes.
Kesselman is one of those academics who makes a ton of extra cash 'consulting' to Big Business & Big Government, cranking out 'reports' that always provide the answers they are paying for. His HST 'study' is a classic example of this type of bogus science. He will play with bogus statistics (like the CPI), mix it with bogus assumptions, stir-in a bit of simple math & bingo! "the HST is great". There is a much simpler calculation (pity I can't charge $50,000 consulting fee): Annual tax shift to Big Business = $2,000 million spread over about 2 million BC families comes to about $1,000 per family per year.

Meanwhile, Kesselman's fellow blue-sky economist, Mintz keeps cranking out employment promises from his computer model & the suckers keep buying it. It seems his model is about as accurate in forecasting as the climate models used by another bunch of academics.
Come on, folks. We don't live in the early days of the Industrial Revolution or the Gilded Age. This is a democracy; we need an economy that creates benefits for ALL the people not just the top 1% as we've been doing for the last 20 years.
This requires a FAIR TAX system, which is NOT the HST.

objectivity...

"Additionally, Schreck offers no alternative methodology for gauging the HST's consumer impact. Astonishingly, he suggests that "community activists who can see what the HST is costing families" are a more accurate gauge of the HST's impact than objective analysis using the best available data." says Professor Kesselman.

Really...using data can actually be more 'objective' than studying what actually happens for people? If there was ever a statement indicative of a tired and outdated world view, that is it. I made less than $10,000. last year, and I paid more in HST on purchases than I received in rebates. This is anecdotal, of course, but those 'community activists' are really on to something when they understand that a pattern reiterated by the poorest of households over and over again is, quite frankly, more 'objective' than the analysis of a professor who obviously doesn't understand the realities of the poverty lifestyle. As just one example, thousands of the very poorest live in rooms with no cooking facilities, and much of what they purchase to eat is taxed. How could it be otherwise? The food banks in this country have long understood that even giving canned food to the very poorest - those camping and living in various other dire circumstances - is pointless if they do not have a can opener or the means to buy one. But these kinds of realities don't seem to be 'objective'? It is cruel and vicious that any government would so little understand the realities of trying to live on the welfare rates of $610. monthly, or a few thousand garnered from temporary jobs over the course of the year, or those doomed to minimum wage livelihoods by virtue more of circumstance than character.

I would invite you, professor, to do a little more homework to see precisely why the CPI is useless for the very poverty-stricken, and why this tax is so regressive and punishing. I will happily help you model what living on welfare rates entails, but you could simply observe and confirm that for yourself.

Kindly do not insult me and others living this reality with your intonations of 'objectivity', for it is you that fails to see the objective, true picture.

Looking Back...

It has been decades since the great neo-liberal experiment began - NAFTA, GST, TILMA, HST, SPP, tax cuts galore (only for corporations), deregulation, privatization, outsourcing, off-shoring, etc...

The Hayek/Friedman camp of economists made great promises - this was all going to turn out grand for everyone - workers and CEO's alike... economic utopia - a rising tide lifts all boats. A New Economy - nothing but high paying, creative white collar jobs for everyone, low prices in the stores..

Compare that to the real result though - the rich got insanely rich, everyone else is getting shifted towards the poverty end of the spectrum. The financial system is on life support, unemployment is high, the recovery is jobless with the exception of some new McJobs, regular people are massively in debt, few have savings, pensions...

We have a growing national debt because tax revenues do not cover expenditures - all the corporate tax cuts did not increase employment, investment, GDP etc - total bust that idea...

The neo-liberal experiment is further along in the USA so you do not even have to extrapolate - just look south, you will see exactly were this is all headed - the wonderful new economy is going straight to hell in a hand basket.

The neo-liberalisation of the economy has been a boon to the corporate class but a complete bust for working people - call it what it is - class warfare.

We've been had and as the HST debate shows you - they're not done taking yet - not by a long shot.

Sales taxes

Sales taxes hit low income people the hardest. In that way they are unfair. They are fair in that everyone pays the same rate unlike Income Tax where those who can hire the best accountant pay the least no matter how much they make.

a meeting of bc economists

During the Olympic debate the Assoc of BCEconomists held a meeting in Victoria to debate the olympic economic impact study produced by the government.

One of the more respected economists stated that it was unfortunate that the analysis appears to be selling rather than assessing.

The problem with impact studies is due to the computer model and what it allows one to do with it. Like the old saying...garbage in, garbage out GIGO. Kesselman admits his logic comes not from qualitative research but from number crunching on a computer. Nothing wrong with that but like others have stated it is only part of the story.

I also have put off major expenditures and renovations due to increased taxes so must save more for the renovations meaning I must delete other expenditures to other sectors of the economy. This is not how one grows an economy? Has Kesselman or Schreck taken this factor into account?

If the government was earnest in its proposal to decrease the HST to 10% then why doesn't it do it now?

The government has already budgeted the windfall from the HST into its spending plans for the next few years which is also the same period leading up to the fixed election date of 2013. This was all connived prior to Christy Cluck arriving on the scene.

They knew they would take in more revenue and made plans to spend it as fast as we provided it to them.

Vote YES means the government has to put off its discretionary spending plans designed to entice voters to vote for them.

Do you remember during the leadership contest of the socred/liberal coalition when caucus reversed Campbell's attempt to buy the electorate with an income tax cut which would have put into jeopardy the contingency reserve set aside for election plums? It was estimated that this "fund" contained up to $750 million. (RBC)

With the inequity between business benefits and consumer costs (we now know that the HST is not revenue neutral) they have enough money to reduce the HST now to 10%.

I will be voting YES but do think a better taxation system must be put in place soon afterwards if YES takes the day. I am hoping the government senior staffers have already worked out options to put to the people of BC other than the lame attempt to reduce the HST to 10% over the next 3 years.

I am also concerned about whether the feds, who now control all sales taxes in BC, will raise the HST to help pay for its deficit spending.

PS I have to agree that the HST is far more administratively efficient for small and large businesses.

Nail on head..

Well said, RickOshea.

For David Schreck's response...

...go to his website http://www.strategicthoughts.com/