On the BC HST: Is That The Best You Can Do?
April 30, 2010 · By Shane Edwards
Roslyn Kunin is director of the British Columbia office of the Canada West Foundation.
She wrote a piece in today’s Vancouver Sun defending the HST, now that recent reports indicate 20 ridings have already succeeded in collecting enough signatures to repeal the HST, and the rest of them are gaining hard.
I have never seen such a pile of ridiculousness in my life.
The arguments come down to, “It will make us more productive by simplifying technology. And that will make us better than the Americans. Did you know they are more productive than we are? And they’re getting better.”
The article could have been entitled, “The HST will make us Better Than Americans”. Of course, that premise would have been laughed out of the newsroom – but that’s what the piece says.
If your central premise is that streamlining the tax collection process will make BC more competitive, you’d better back it up with facts. Last time I checked, I don’t see companies that produce tills and other money-processing equipment charging companies less simply because the system has to do one less percentage calculation.
But more obviously, I don’t believe a single State in the USA has an HST. Mainly because there is no Federal Sales Tax in the USA – although many cities and counties charge special sales taxes on certain goods and services. So, basically this article, which the Vancouver Sun’s website advertises as one of the most read articles today, negates itself. It says that we need the HST to be more competitive because America is more competitive than us… but the USA doesn’t have an HST. They are kicking our butts productively because they work harder. It has nothing to do with harmonized taxes.
Canada (and BC) needs to get off the pot (and the Pot) and work harder. Not whine to the government about taxes being too complicated… never mind my 9 year old can calculate them in his head.
Shane,
Though I have no love for the HST (mainly because it hides the various taxes from citizens, thus lessening accountability), I don’t think you’ve spelled out much of a case against the productivity argument for the HST.
Putting aside any “we can be better than Americans” type of argument, complex taxation schemes have been proven to produce a drag on economic productivity. Multiple forms of consumption taxes cause extra work not at the till, but in the remittance, especially when different products have different levels of taxation. I don’t think there can be much of an argument that a single sales tax will have some positive effects on productivity.
In comparison to the U.S., you argue that Ms. Kunin’s article collapses in on itself because the U.S. has no federal sales tax, and thus most jurisdictions need not worry about a harmonized sales tax (let’s put aside the cities that have a municipal sales tax as they’re by far the minority), but I take her argument to be not that the HST, per se, is what will achieve productivity gains leading to an American level of efficiency (and I question whether the Americans are more efficient), but that a single sales tax will achieve this – because then, like the U.S., we won’t have multiple layers of taxation.
That all seems sound. The argument then becomes what form this type of single sales tax should take – whether we should combine multiple taxes or eliminate one. One can certainly argue for the productivity benefits of a one sales tax and against an HST.
I’m already on record as supporting the increased reliance on consumption taxes, but my preference is to eliminate income taxes as we do so. Sadly, it appears that we’re moving to increased consumption taxes and the status quo on income taxes.
And that just sucks.
Sorry for responding to my own post, but when I say that a single sales tax will, in some ways, positively affect productivity, I mean moving from two sales taxes to a single sales tax will have some positive effects on productivity.
I’m not so daft as to suggest that a sales tax, in and of itself, will provide productivity gains.
The HST if put in place properly would be a cost saving and labor saving device but seeing as Gordon wants to use it to increase taxes on things not taxed before it’s a wash.
It’s not the HST that is bad it’s our Crooked Premier and how he wants to implement it.
PS the carbon tax has no reason for being at all, pure theft.
More on Liberal Lies from Canada’s Left Coast …
http://www.libertaspost.com/ar.....nd-support
I am amenable to Jon’s proposal to go with a higher sales tax toward the abolition of income tax.
Trouble is, the rot of socialism pervades every major political party. Neither the Liberals nor the NDP nor the “Conservatives” will ever seriously pursue the abolition of income tax because it is anathema to socialist wealth redistribution. It would also throw significant uncertainty into the revenue line of the federal budget, which would necessitate proactive, deep cuts in spending so as to avoid deficits, a tack that no political party is keen to pursue.
Beyond mere economics, there is the battleground of the mind. Having been raised on the pablum of feel-good Trudeaupian nanny-statism, an entire generation of Canadians now subscribes to the moral superiority of socialism. This is why the tired, illogical boilerplate argument of socialists against sales tax — its impartiality makes it unjust — continues to resonate with John Q. Public.
If the goal is to reduce taxation, then the two-pronged attack on sales and income tax is probably the most efficient means to real cuts. Of course, there are other alternatives too, e.g. the elimination of capital gains taxes, the elimination of corporate taxes, the elimination of licensing fees, etc.