The Deceit of the HST

I know I’m a little late with this, but I thought since Shane presented some justifiable outrage over British Columbia’s HST, I should present some outrage over Ontario’s HST.  Despite my defense of one aspect of the HST in the comment’s of Shane’s post – and despite my inclination towards replacing income-based taxation with consumption-based taxation – I am fully against the initiative.  I’m sure all my old Econ profs are horrified (sorry, Prof. Hay), but despite all benefits of a unified consumption tax, the HST is incredibly deceitful.

We already knew that the HST would lessen responsibility for politicians.  It’s a nebulous tax that belongs to no one in particular.  Thus, increases won’t be easily attributable to anyone one government or party.  The GST – as hated as it was when it was enacted – had one fabulous feature; you could always see how much it was.  The GST was born in 1991.  For 19 years, it was never increased.  Anyone see that streak continuing with the HST?

Now, we have another reason to hate this atrocious taxation policy.  The McGuinty government has decided to enact it before it has even become law:

In a move that will surprise many, Ontario consumers will get a taste of the province’s dreaded new harmonized sales tax (HST) beginning Saturday [May 1 - I said I was a little late with this], two full months before it is fully implemented.The early start applies to all products and services to be consumed after the 13 per cent tax’s official start on July 1. Airline tickets for fall travel, for example, will be subject to the new blended HST, as will gym memberships, theatre tickets and a range of other goods and services.

But of course, this couldn’t possibly be the government’s fault:

Provincial revenue minister John Wilkinson on Thursday defended his decision not to publicize the early transitional start. He said the rules have been posted on a government website since October. He blamed businesses for failing to inform the public about the changes.

“The decision of businesses as to whether or not they marketed that is up to them,” he told reporters. “But this information has been available broadly to the public since (October).”

Wow, now that’s chutzpah.  Beyond the fact that it’s not the job of private citizens to inform us of changes in tax policy, this just doesn’t pass the smell test.  Businesses have an incentive to get people to buy as far in advance as possible (they’d rather have your cash now than later), surely if they could have boosted their sales in April by highlighting the upcoming dishonest actions of the government they would have.

On the BC HST: Is That The Best You Can Do?

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.

Surprise! Surprise! The NDP will raise taxes!

How’s that NDP majority working for you now, Nova Scotia?

The results from Finance Minister Graham Steele’s cross-province consultation on the province’s finances are in, and they indicate a sales tax increase is coming in next week’s budget.

Related: Government fiscal myopia (Tax! Tax! Tax!) cuts across party lines, it seems. The Quebec Liberals.

Update April 1: Éric Duhaime expounds on the tax and spend addiction of the Quebec Liberals. Increasing government spending by 3% “year after year after year.” Nice.

Stephen Harper aka John Maynard Keynes

CBC:

… the Fraser Institute, which champions free-market economic solutions, concluded government spending and infrastructure investment accounted for just 0.2 percentage points of the 1.1 per cent growth between the second and third quarters of 2009. [...]

“First of all, that’s completely wrong and quite frankly contradicted by very serious work that’s been done [elsewhere]” Harper told reporters. “Economic theory and history is clear, governments must … make sure [funds] are put to productive use in the economy to create jobs.”

And with that, Mr. Harper demonstrates he is a pro-Keynesian quasi-capitalist who really does not believe economic freedom alone can pull nations out of challenging economic times. Actions and now words have shown that when the pressure is on the CPC believes government must intervene by essentially reversing the generational taxpayer truck to the government trough and opening the valve.

The gig is up. A free market, small-government, fiscal conservative Mr. Harper is not.

Could Amazon be the first of many bringing jobs to Canada?

Amazon.com is looking to open a new Distribution Centre here in Canada, if Canadian Heritage allows for it.

Canadian Heritage has 45 days to complete the review launched Jan. 27, but it could be extended by another 30 days if needed.

Walid Hejazi, a professor of international business at the University of Toronto, said he believes the government is close to allowing Amazon in to Canada, a move that would be consistent with the government’s recent steps to open Canada to more foreign investment.

And doing so would provide better prices and more jobs to Canadians.

Paul Misener, Amazon’s vice-president of global public policy who has been meeting with government officials, says a Canadian distribution centre would provide a benefit to the country.

“We are pleased to be continuing to communicate with policy-makers about the benefits that we have brought to Canadian culture both within Canada and globally,” he said Wednesday.

With the Canadian government opening up the telecom and satellite industry to foreign ownership allowances, Amazon could potentially be leading the way (hopefully) for foreign corporations coming into Canada and being able to take advantage of the benefits of doing business in Canada.

But, in many ways, Canada has been a closed market to so many different competitors because of those very foreign ownership laws and how they slam up against our cultural preservation limitations.

However, if it happens, and more follow, those industry “giants” as some call them, will only add to jobs in Canada which leads to a larger tax base, both corporately and in individual spending.

And Jack Layton wants to prevent tax benefits for “big business”. Michael Ignatieff doesn’t think the current Budget will create new jobs for Canadians.

“We will vote against it, but in a way that does not provoke an election,” Liberal Leader Michael Ignatieff told reporters, speaking in French. “I don’t see a path in this budget that gets Canadians back to work. This is the key thing.”

Mr. Layton and Mr. Ignatieff, this is how this Budget could, and I stress could get Canadians back to work and raise our GDP to levels that can accomplish what the Budget proposes.

Instead of poo-pooing the Budget just because you hate the Conservatives, try finding ways to make it work, or make it work better.

Support the Government and encourage these initiatives that are bringing investors and jobs to Canada!

Lions and Tigers and Budgets! Oh my!

I have to say that I was amused by the reactions of the various Opposition Leaders to yesterday’s Budget release when they came out of the House of Commons. Robert Fife and Craig Oliver seemed to have a fun time dealing with Jack Layton and Gilles Duceppe. In fact, I was stuck by the similarities between said leaders and the colourful cast of The Wizard of Oz.

The Cowardly Lion (played by Mr. Michael Ignatieff) – ‘This budget is so very terrible that we simply can’t stand to support this government! In fact, we are so unhappy with it, we’ll rrrruff, and we’ll rrrrrufff! and we will vote against it with at least fully half of our caucus!’

Yep. So instead of getting fully behind his rhetoric and getting his entire caucus to vote against the budget, he opts for the cowardly route. Not that I’m looking for an election or anything, since that would just be stupid on anyone’s part. But still, it makes you wonder if Mr. Ignatieff has spine enough to bring consensus to his caucus and have everyone of them move in lockstep. Judging by his previous courageous stands, well, I’m not going to hold my breath…

The Scarecrow (played by Mr. Jack Layton) – ‘Well look, see, there’s a lot of things I like in this budget that addresses some of our larger concerns, but we don’t want to think about that. Look at the things he’s doing that I don’t like!’

Right! The ‘If I only had a brain!’ argument! Jack Layton couldn’t decide what he was going to do about the Budget. Was he going to support it? Was he going to vote against it? Was he going to try and negotiate? Was he going to do anything? Mr. Layton just couldn’t decide! So instead, he’s going to take it to his caucus and tap into the power of loony-left-groupthink and come up with something outrageous.

The Tin Man (played by Mr. Gilles Duceppe) - ‘You see, I don’t care about the rest of Canada. I only heart Quebec. This budget does not do the things for the Quebec Nation that we want, so since we don’t get special treatment above and beyond the rest, we vote no.’

Thanks Gilles! I think we knew that the man with no heart for Canada wouldn’t support a budget that doesn’t try to bribe Quebec with the rest of the nation’s money.  How very predictable, but then we expect that from Mr. Duceppe…wait, was that a redundant observation? We expect predictability…? Anyway, back to navel-gazing for you Mr. Duceppe.

So in the end, while we got the usual reactions from the usual suspects, I was at least momentarily amused by them. Carry on carrying on boys!

National Daycare = Financial Sinkhole

So evidently Michael Ignatieff has jumped onto the tired old Liberal horse called Nationalized Daycare. He’s riding it for all it’s worth, and all we are worth too. They continuously cry out about how the Conservatives have “left the cupboard bare”, and in fact I just received an 10%er from Rodger Cuzner claiming exactly that.

Now, I live in a rural riding, and I’ve seen the challenges people have in finding day care for their children. Now I’m sure it’s ridings exactly like mine that Mr. Ignatieff et al have their eyes on when they talk about this glorious idea of a Nationalized Daycare program. Here’s the problem though, as seen through the eyes of someone in a rural riding.

We are not Toronto. Not a big surprise and certainly no stretch of the imagination. We have a population of approximately 109,000 people according to Elections Canada. If you’ve followed that link and looked into this riding, the map shows that we’re a fairly long strip of rural land. About half the population lives in Chatham itself and the remainder is spread out into smaller communities.

Now where the population is widely spaced, it’s likely that the only National Daycare Centres that would be put in place here are in the communities of Chatham and Leamington, possibly Tilbury and possibly Ridgetown. That leaves everyone else within the riding having to drive their children 20-30 minutes away from home and then having to travel back in order to go to work. This will very likely cause a lot of grief on any parent who would have to drive an hour (round trip) to another city/town at the beginning and the end of their day just to put their child into this Nationalized Daycare program.

As I’m sure everyone knows, there will be an complaint about Undue Hardship. The typical Liberal response to that will be to offer a subsidy for local day care because of the “unreasonable” distance a parent needs to travel. Likely, the local day care will be charging more given the potential loss of children to the ND program and the fact that it’s government subsidized. This will of course drive up the costs of the program. And I think we also know that the bleeding heart Liberals will succumb to nearly every complaint and woe presented to them.

Then there’s the loss of jobs in the private sector. For a party screaming about the loss of jobs in Canada, to put in a program that will essential wipe out an entire private industry is appalling! The government will of course require certain specialized certification in order to justify the elimination of the private industry which will require current providers to either upgrade their knowledge, which means going back to school which means loss of income and an increase in student debt ($$$), which may further be subsidized by the government ($$$), or else the former daycare provider will just have to suck it up and find a new job (more likely) or go on Employment Insurance ($$$), provided they’re eligible…

All of these costs will end up spiraling out of control (see National Gun Registry) due to poor planning and unrealistic expectations in productivity. The usual answer of the Liberals is to simply throw money at it and hope that solves the problem while crowing about investing in childcare (see Health Care).

How will they pay for all of this? Easy. They’ll simply raise taxes, or pull a Dalton on us and create a Childcare Premium.

The Liberals have been talking about this for nearly 2 decades and still can’t provide anything close to some kind of detail as to how this program might function within budget. This tells me that they have no plan, and that they’re just going to ‘figure it out as we go’.

If this ever happens, I’ll weep for the nation.

Big Government vrs. The Virtue of Governing Oneself

I’m all for gun and property rights. But I can’t understand people that always want to get tough on crime, particularly with stiffer prison sentencing. Can’t they be more imaginative? Why don’t they buy a gun, then get involved in some group or another to elevate the character of young people or the otherwise dispossessed.

The political culture is such that we are subjects of a massive state apparatus and comforted with infinite means to entertain ourselves, but why such little appreciation for the responsibilities that come with citizenship? with looking out for your own self-interest, especially in the community where you live? taking pride in your own capacity for self-governance?

Such prison policy is bearing fruit south of the border and it is rotten! … Reform is needed, and as the New York Times reports, it’s becoming a bipartisan issue.

I watched Gran Torino for the first time last night. Great movie!

There is a scene in Gran Torino where Clint Eastwood’s character, Walt, is asked why he didn’t call the police instead of confronting a gang outside his house. Walt’s response, “Well you know, I prayed for them to come but nobody answered. … when things happen quickly like that, you have to react.”

When faced with any individual or social “problem,” be it crime, the need for some agent of welfare, or even some public works project or another, we need to consider how civil society engenders a much larger definition than Big Government prefers to accommodate. Big Government is not the natural result of civil society, rather, Big Government is what Max Weber called an “iron cage,” and we require a responsible citizenry to moderate its role in civil society.

Consider what John von Heyking writes in his insightful review of “It’s the Regime, Stupid! A Report From the Cowboy West on Why Stephen Harper Matters:”

And so Canadians have come to view their sovereign as the agent of “gift giving,” … This decadent regime has been rendered possible by a decadent Christian culture that has forgotten the distinction between compassion, which benefits bureaucrats (because the purpose of compassion is to feel good about oneself), and caritas, for which the language of costs and benefits are irrelevant (because the purpose of caritas is love for another). Subjects of the modern regime need to balance their interest-calculation with some pride, which Cooper describes as a “something that you hold on to without qualification as to whether it is in your interest to do so – otherwise there would be no ‘you’ to have an interest.” …

In other words, too many take Big Government to be the default solution to whatever ails them. And yet, there is no virtue, no individual dignity to be gained, in not taking responsibility for your own life.

N.S. Premier Darrell Dexter fighting for brownie points

Nova Scotia Premier Darrell Dexter must think tax-payers are as stupid and arrogant as politicians:

“I can say that it was a bit of a surprise to me,” Dexter told CBC News on Friday. “I’ve never had any problem sharing the credit for undertakings by the government with the various levels.”

Most people are smarter than that. Most people know any “credit” belongs to the tax-payer and, regardless of what level of government exacts the money, there is only one tax-payer. Since politicians do not pay taxes in any honest or intelligent sense, it does not surprize me to learn the stupid complaint from Darrell Dexter.

California Stealin’: Taxation and Theft

California is a fiscal basket case.  There’s no real argument about that.  Now they’re trying to find more underhanded ways to wring more tax dollars out of the citizenry.  According to The Los Angeles Times:

Starting Sunday, cash-strapped California will dig deeper into the pocketbooks of wage earners — holding back 10% more than it already does in state income taxes just as the biggest shopping season of the year kicks into gear.

Tax withholding is a scam.  Despite any facile claims of needing a steady stream of income, tax withholding is designed to allow people to ignore the level of taxation and to make people pay more taxes than they rightfully owe.

First off, if the government can spread your tax burden over a long period of time, you’ll notice it less.  Further, by taking the money directly from your employer, you never actually see it.  The government has removed you from the transaction, and you don’t feel the complete tax burden that has been imposed upon you.  However, if they are only taking from you what you owe, there’s nothing too devious about that.

The insidious aspect of tax withholding is that it leads to people paying excessive taxes – taxes beyond what they are legally obligated to pay.

Come April, when we all file our taxes (assuming we do), we all, presumably, are hoping for a refund.  If, after taking an initial stab at completing the ridiculously complex tax forms, we owe money, most of us will look for more deductions or rebates.  If, after taking another pass at the tax forms, we now are owed a refund, most of us are happy.  If, after the initial attempt at our taxes, we are owed a refund, we’re happy.  Basically, we are, in effect, not worried about the amount of taxes we pay; we are worried about getting a refund.

Once we have that refund, we are far less likely to continue to look for more deductions.  We’re satisfied – we have our refund – so why bother?

And, thus, we come around to increased withholdings.  Implementing regulations that command excessive withholdings increases the number of people who will get refunds.  Consequently, it increases the number of people who won’t look for all the deductions they are owed.

But, the government has willfully deceived these people.  They may get bigger refunds, but their tax payment will have gone up even though their tax obligation did not.  It may not be theft, but it’s not that far off.

And, come on, that notion that the government needs the cash and can’t wait until April to get it is an utter lie.  They can just issue I.O.U.s.

(H/T: Veronique de Rugy.)

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