The B.C. Liberal government's proposed harmonized sales tax has enraged most people commenting on Straight.com.

Not everyone, however, opposes Premier Gordon Campbell's decision to combine the five-percent GST with the seven-percent provincial sales tax into a new 12-percent HST.

Late last month, the  Business Council of B.C. posted a commentary on its Web site praising the government's plan to introduce the HST on July 1, 2010.

In what it hailed as "the most important provincial tax reform in a generation", the BCBC expressed great delight in the way the HST will allow business inputs to be removed from provincial sales taxes.

The BCBC stated that this  will lead to "billions of dollars of additional  business  investment and faster renewal of the private sector capital stock".

"While the PST is often viewed as a 'consumption' tax, the reality is that it applies to elements of both consumption and production," the BCBC stated. "Approximately 40% of the PST revenue collected by Victoria is paid by businesses on a wide variety of inputs used in producing goods and services. This represents additional costs for BC businesses of some  $2 billion annually."

The BCBC acknowledged that the HST will have an impact on "tax-inclusive prices paid by B.C. consumers but to a lesser degree than most expect".

"Businesses that sell in the domestic market will see costs fall as the PST is removed from business inputs," it stated. "The benefits of these cost reductions will flow through to consumers in the form of lower (pre-tax) prices."

What the Business Council of B.C. did not state in its commentary:

* The HST  will be  a great benefit to capital-intensive, export-oriented companies, including those in the forestry, mining, and transportation sectors, because they will be able to obtain credits for  provincial-sales-tax inputs. Some of these capital investments will actually reduce the number of employees because machinery will perform work previously done by human beings.

* The HST will make B.C. exports more competitive, but that might not be  as important in the future as rising oil prices destroy demand for B.C. resources overseas. The peak-oil crowd is convinced that economies will increasingly "relocalize" in the 21st century, yet the Campbell government has decided to give a boost to 20th-century industries.

* The HST is more important to the Ontario economy, which has a heavy manufacturing base.

* The HST is a fantastic gift to big businesses that make substantial capital investments, but the impact  will be  far less  positive for locally owned companies that  rely primarily  on human capital to sell services exclusively to local residents.

* The HST probably has a more detrimental impact in Vancouver, which has a strong service-based economy.

* The HST will clobber the restaurant industry and have a harmful impact on the entertainment sector, both of which  are not  as reliant on capital investment as the resource sector.