Maureen Bader: B.C.’s HST stands for hidden sales taxes

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      Many people in British Columbia feel both dismayed and betrayed by the HST. It is a $2-billion shift in hidden sales taxes from business to consumers done by a government which said sales tax harmonization was not on the radar screen during the most recent election. True, government reduced income taxes to soften the blow of the tax shift, but meanwhile, it increased other taxes. If government cuts one tax then raises another, people are no better off. If the government wants to honestly claim families will be better off with the HST, it must get rid of the other taxes and reduce the overall HST burden.

      The HST, which kicks in on Thursday (July 1), brings together the seven-percent provincial sales tax (PST) with the five-percent goods and services tax (GST) for one “harmonized” 12-percent sales tax. When the HST was first announced, the Canadian Taxpayers Federation recommended the provincial government protect families from this tax shift by reducing other taxes to offset the impact. The government partially agreed and increased the basic personal income tax exemption from $9,373 to $11,000. However, they are still hitting families with other tax increases.

      The carbon tax is also going up on July 1. It will rise from 3.33 cents per litre to 4.45 cents per litre for gasoline, and 3.84 cents per litre to 5.11 cents per litre for diesel. Families will be paying more to drive their kids to soccer practice and businesses will pass their cost increase to families in the form of higher prices for everything from food to clothing.

      Following the pattern of great fanfare for a tax cut then slipping a tax increase in on the sly, the government announced a residential energy credit equal to the B.C. portion of the HST, to lower home heating costs for families. What did it do next? It increased a tax on B.C. Hydro bills, the Rate Rider, from one to four percent. As a result, B.C. Hydro customers won’t benefit from the full seven-percent tax break. Just to add insult to injury, families will pay the federal portion of the HST on the Rate Rider.

      The Medical Services Premium (MSP), or health tax, also went up in 2010 and will go up again in 2011 and every year after that. On January 1, the health tax went by six percent, from $648 to $684 per year for individuals, and from $1,290 to $1,368 per year for families. On January 1, 2011, the health tax will go up again, to $726 per year for individuals and $1,452 for families. At this rate, the health tax will double in nine years.

      The government claims families will be better off with the HST because prices will go down over time—oh, except when government is doing the pricing. One example is the PST on liquor, which will fall from 10 to seven percent under harmonization. Don’t raise your glass in celebration too soon folks, because the government will increase the wholesale mark-up on alcohol to keep its tax grab the same.

      The government’s claim that people will be better off with the HST is difficult to square in the face of these other tax hikes. To ensure families are better off, government must reduce the total family tax burden—sly tricks won’t do. The government must eliminate additional taxes like the carbon tax and the health tax, and reduce the burden of the HST by reducing the harmonized rate from 12 to 10 percent. The possibilities for protecting families from the tax shift are endless, unlike people’s patience with government’s tax sleight of hand.

      Maureen Bader is the B.C. director of the Canadian Taxpayers Federation.




      Jun 30, 2010 at 2:51pm

      Hi B.C. Your province is one of the most beautiful places on earth. I don't live in your province yet but I do own a property there. When I bought I got a huge surprise when it came to the registration cost. (Tax) 1% of the cost of the property. $2000.00. The same property here cost between $300.00 and $400.00. I got a bad taste of what NDP and Liberal governments do. Then I see this new HST. What is wrong with government today. Aren't they suppose work for us? This sucks folks and I am having second thoughts. I feel bad for you all.


      Jun 30, 2010 at 3:35pm

      Ms. Bader: The PST was applied at multiple stages of the manufacturing process, out of sight of the consumer. The HST is applied once at the retail stage and appears as a separate line item on receipts. Like the GST, it's entirely transparent: every penny of it that you pay is reported directly to you. How, then, can you say it stands for "hidden sales tax" and expect us to take you seriously? For that matter, how can you claim that "to ensure families are better off, government must reduce the total family tax burden"? At what cost? Our schools are already underfunded; don't you think that _increasing_ taxes to improve the quality of education might benefit families? What about our health care system, or transportation? Quit pretending that taxes exist in a vacuum and demanding that they be constantly lowered; they don't, and as taxpayers we want no part of any race to the bottom.

      Maureen Bader

      Jun 30, 2010 at 4:46pm

      The HST on new homes is chump change compared to the property transfer tax.

      And yes, the PST is a hidden tax and the HST is a visible tax. Glad we agree on that point. Families will be better off when they are able to reap what they sow. Would you be happier if government took 100% of everyone's income, instead of almost 50%?

      Ed N.

      Jun 30, 2010 at 9:43pm

      i've never quite gotten why the righties are on and on about how "bad" taxes are, but never any mention of being gouged by retail markups and other profit-generating pocketing of my hard-earned dollars. I'd rather pay taxes to fund health care, education, regulating corporate behaviour, etc.; than pay the same number of dollars towards some corporate type's idealistic but unsustainable pursuit of it's-never-enough "wealth". The Cdn Taxpayer's Fed don't represent avg working people, they represent the right-wing fringe capitalist minority.


      Jul 2, 2010 at 11:16am

      I totally agree, with Maureen Bader. Everything you need to run your home is taxed. Where the budget doesn't get you, the HST does. Price gouging in BC, is common place, food costs and gasoline, are outrageously price gouged. The HST, has a very long arm, everything from a kitchen stove to garden plants, have the HST applied. Has not anyone noticed, Campbell and Hansen are very careful , not to mention, the HST and the budget in tandem? Just another of their, underhanded tactics, they are so famous for. BC citizens need to put the budget taxes and the HST, side by side, they will then see, just how badly we are being ripped off by, Campbell and Hansen's outrageous taxes. People really have to look at this, they could be taxed, out of their homes, they need to be prepared. This province, is in a dictatorship government. What is good for the people and the province, is no longer considered. Greed and corruption is what runs BC.

      John B

      Jul 3, 2010 at 10:26am

      Under the old system PST was exempted from inventory. Now the tax is applied to inventory before the items are sold. How dose this increase investment?

      Eat the Poor

      Jul 5, 2010 at 11:20am

      Give it a rest ED N, The LIBERALS raise your taxes so they can fund your lavish socialist life. They are not corporate right wingers, they are tax and spend LIBERALS. They spend money on an ever growing bureaucracy instead of letting tax payers keep the money in their pockets. This is the basis of socialism. tax the hell out of those that produce wealth, so those that produce nothing can lay around and complain that they are getting enough.

      What I don't understand about this whole thing is that 2 years ago if you asked an NDP or Green party supporter, they'd be all too exciting about consumption taxes on consumers because this is how they plan to save the earth. I'm pretty much a libertarian and i think the time must come where government spending needs to be halved. The waste generated by these clowns is mind boggling. In order to pay for it, they take away money from you.