HST is good for business, but at whose expense?

Reading Ian MacLeod’s letter last week was like watching a contortionist—fascinating, but repulsive [Letters, June 16–23]. He ties himself in knots trying to be simultaneously for and against taxes, depending on which government brought them in. Corporate taxes in the ’90s—boo! HST today—hurray!

MacLeod wants us to believe corporations should get a free pass because “only people can pay taxes.” Strange creatures, these corporations. They’re regarded by the law as having the status of persons, so why should they not pay taxes as people do?

We’re told raising corporate taxes only leads to higher prices, lower wages, and job losses. The problem is, corporate tax rates have fallen 40 percent over the last 25 years with no sign of the rising wages, increased employment, or lower prices MacLeod’s argument would lead us to expect in return. What we’ve seen instead is an increasing concentration of wealth.

Corporations exist to funnel money to their shareholders through dividends and capital gains. And who are those shareholders? The wealthiest 10 percent of households hold more than 80 percent of stocks and mutual funds. So let’s at least recognize this shell game for what it is. Cutting corporate taxes is nothing more than a tax cut targeted to the wealthy.

The provincial Liberals cut corporate taxes while bringing in the HST: tax cuts for the 10 percent funded by tax increases on everyone else. If that’s your policy position, fine. But do try to be honest about it.

> Michael Brockington / Vancouver

 

The HST is helping my Burnaby production-supply company stay in business and continue employing a dozen people. Whether a movie or commercial shoot is looking for makeup, camera supplies, a smoke machine, or fake snow, we can help them. When the HST came into effect, we experienced a substantial increase in business, as filmmakers are choosing to work in B.C. If the HST were to be replaced by the 12 percent PST-GST, I would estimate that 20 percent of my business would disappear, and that could mean job losses.

I’m voting No to keep the HST and to keep B.C.’s film and TV industry strong.

> Mike Kaerne / president and general manager, HollyNorth Production Supplies

Comments

9 Comments

RonS

Jun 23, 2011 at 8:04am

Well Mike Kearne what do you think now? Virtually no new movies scheduled for shooting here. The Superman movie went to the US after saying they would shoot here. What did the HST do to help that and many more that have decided not to shoot here and move elsewhere? Is it because of wages or more likely the Canadian dollar? I'll lay odds it's the dollar but I bet your next bitch is Union Wages. Now the movie industry will want to cut wages to keep movies here. Fat chance that will work either. We're not stupid, lots of movies are now being shot in Eastern Europe because their economies are in the tank and wages are cheap. Like the manufacturing industry, the movie industry will go to where it's cheaper to make a movie. There is no loyalty to BC because we have the HST No sir, it's who can give more to their bottom line.

Quit the hyprocrisy, we know what's going on and I will vote YES to EXTINGUISH the HST!

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B. Park

Jun 23, 2011 at 9:23am

HST is good for some business (really good for exporting businesses and resourced businesses) - not service businesses. The HST takes money from the everyday BC consumers at an estimated 2.8 billion dollars collectively and redistributes them to the Liberal Government & business; roughly 2 billion to business and 800 million to Government.

The HST has been shown all around the world to be a failure. You don't have to go any further than within our own borders. That HST/ VAT is a failure. Provinces with the lowest economic performance have the HST: Nova Scotia, New Brunswick, Newfoundland, Ontario, British Columbia and Quebec. Provinces with the strongest economic performances do not have HST: Alberta, Saskatchewan and Manitoba.

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Arthur Vandelay

Jun 23, 2011 at 10:07am

@B.Park - Re; you assertion, "The HST has been shown all around the world to be a failure."

You really may want to back up that statement because VAT taxes like the HST are the norm around the industrialized world and especially in any progressive democracy like the northern European countries where the VAT rates are generally in the 20%-25% range. Indeed, this is primarily why Canada is making this change, for our companies to be able to effectively complete on an equal footing with the rest of the industrialized world who do not burden their producers with taxes that they must pass through to consumers in the price of their goods and services, thereby making them look uncompetitive globally. Here are the rates of VAT in Europe where they have used them for many decades.

http://en.wikipedia.org/wiki/Tax_rates_of_Europe

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Bob Ages - Delta

Jun 23, 2011 at 11:37am

The Nordic countries with high VAT rates also have much lower inequality of income than BC, both for market and post income tax earnings. Let's not compare apples and oranges. When the business community supports full unionization and all the other progressive policies in Europe, we can talk about the merits of a tax shift like the HST. See www.bestdealbc.ca to find out more about fair taxes and good public services.

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Dave Thom

Jun 23, 2011 at 4:37pm

this story is correct. However, you must realize that HST and low corporate taxes help bring wealth and value to BC. Yes, you are right a high amount is concentrated in the rich. HOWEVER, a lot is also beneifiting everybody else.

It's the unfortunatley thing about a global economy. We need to COMPETE with other jurisdictions. If you want to keep corporate taxes high, and have high red-tape taxes like PST....you just drive investment and money to the competitors. In the end....sure, the rich aren't as rich....but EVERYBODY else SUFFERS even more!.

In the current world economic structure, it's unforutnate the rich will always get rich faster, but then again, it has VASTLY improved general population wealth over the last 100 years. However....being uncompetitive make everybody WORSE off!

That's just reality! Only an economic revolution will change this....something that BC cannot do alone (we would ruin everybody's fortunes in BC). Perhaps the economic collapse of the USA will bring revolution....but that is not happening anytime soon.

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RE: B. Park

Jun 24, 2011 at 2:18pm

"... HST: Nova Scotia, New Brunswick, Newfoundland, Ontario, British Columbia and Quebec. Provinces with the strongest economic performances do not have HST: Alberta, Saskatchewan and Manitoba..."

I do agree that HST is good for some, but I would not go as far as saying HST is reponsible for each province performance. Given the fact that Newfoundland is doing remarkable job at creating employment. Ontario was poorly performed due to the manufacturing sector. It's good to compare but I feel you are stretching it here a bit.

The problem I have with HST is that it benefits the big corporations and the government is have a leap of faith that the big corporations will do the right things. If we all have learn, big corporations only line the executive pockets in the expense of taxpayer, shareholders, and employee. If we are relying them to spin-off the saving, we have better luck to see a pig fly.

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Joy Matthews

Jun 29, 2011 at 2:25pm

The cost to BC should the HST be extinquished will be high - and as tax payers we will all end up paying. And there is no guarantee that the exemptios that were in place previously for PST will be re-instated. These exemptions which included serivces such as getting a hair cut or buying that new bicycle are not guaranteed should the PST be re-instated; nor is there any guarantee that a re-instated PST will stay at 7% - the government will have to find the money somewhere to cover the costs related to re-instating this tax. HST has been healthy for all businesses - because even small business owners get the full HST back when they file their returns whereas they received little or no relief from PST. The sky is not falling and with the proposed decrease to 10% we are far better off then the eastern provinces where their HST is 13 - 15%.

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