Jane Sterk: Whether you vote Yes or No, HST referendum outcome will be costly
The implementation of HST is the greatest public policy failure in the history of B.C., regardless of the referendum results. Political science, economics, public policy, and tax law classes should be required to use B.C.’s HST implementation as a case study of what not to do when bringing in new policy, especially tax policy.
There are no good choices in the HST referendum
A Yes vote to extinguish the HST and return to the GST and PST means a costly transition, the least of which is the need to repay some or all of the $1.6 billion owed to the federal government. Even more expensive, to say nothing of the practical difficulties, is re-creating the provincial sales tax office; transitioning staff back from the federal tax collector; and reestablishing systems for PST collection. Businesses will be inconvenienced as they change to the dual tax collecting and tax submission schedules. Large businesses may be able to cope; small businesses will find it extremely difficult and pricey.
While some romanticize that the PST is a better tax, it isn’t. A look at PST exemptions suggests questionable logic was used for what got taxed and what didn’t. Some exemptions simply rewarded special interest groups that appeared to have the ear of the finance minister of the day.
A No vote to keep the HST is also costly. The government plans to reduce the provincial portion of the HST to five percent over two years, a tax revenue loss of $800 million for each percentage point. In addition, taxpayers will bear the expense of a one-time payment to be made for every child under 18 and to low-income seniors. None of us begrudge helping seniors. The payment for children, like all universal plans, gives the money to those who need it and those who don’t, with far more in the latter category. As well, others like those in poverty and people with disabilities for whom the HST is a burden receive no compensation.
Direct payments are never good tax policy. They hold the distasteful perception of trying to buy votes.
The HST was badly planned and implemented. Deciding to change it haphazardly does not address the fundamental problems nor does it improve the tax.
The Green party supports taking taxes off income, investment, and job creation—and putting them onto waste, pollution, junk food, and carbon emissions. We believe the tax system should be used to reward businesses and individuals that implement low carbon, energy saving, and wellness creating practices and penalize those that don’t. HST has some of the aspects of that kind of tax policy. However, it fails to achieve the beneficial objectives because it is not connected to a strategic plan.
Is there a right choice?
It seems that the B.C. Liberals and their supporters all support HST and will vote No to keep it—misrepresenting this as “say No to higher taxes”.
On the other side, the B.C. NDP and their supporters are universally opposed to the HST and want to return to the PST. They tell people to vote Yes.
At our recent AGM, B.C. Greens debated a resolution asking the party to take a position supporting a Yes vote. The resolution failed. Three-quarters voted against it. Reasons expressed by the majority included a preference for value added taxes and a simpler tax system; getting rid of the hidden tax costs that are inherent in PST; that rich people pay a higher portion of the tax because they buy more; and that people with wealth can’t avoid the tax. Those who oppose HST expressed concern that it unfairly shifted the tax burden from industry to consumers and that poorer British Columbians pay a higher proportion of their income in HST than do wealthier people.
In contrast to the demand for unanimity made by other parties, B.C. Greens trust that voters will vote in the way that they think is in the best interests of B.C.. Some will vote Yes and some will vote No.
I am going to vote No. I believe HST is better than a return to PST. For me, it is the least bad alternative.
Jane Sterk is the leader of the Green Party of B.C.
Comments
10 Comments
bigstogie
Jun 21, 2011 at 7:49pm
This is the most intelligent commentary I have ever heard, and I am a conservative business owner. While I voted Liberal, I also believe the implementation of the HST was a total failure. Look at Ontario who also implemented the HST at the same time. No problems, no controversy. Jane, very well said.
ditchdigger
Jun 21, 2011 at 9:09pm
Sterk doesn't make any mention of the fact that the HST introduction was a case of lying to the voting public. That, and that now the average taxpayer is paying the corporate sector's $2 billion per year share of the tax pie, is why I'm voting YES!
That, and she also didn't mention that the NDP has not only supported the abandoning the HST, but has called for a review of all taxation in the province.
glen p robbins
Jun 21, 2011 at 9:32pm
Although I read the piece (and did not have the apparent advantage of audio that bigstogie had) I do not believe this is intelligent commentary.
Ms. Sterk neglects to consider an important demographic - mothers with young children who enjoyed an exemption on clothing one which a pathetic $175 which will not help many of this constituency. She presumes to undertand economics - a discipline which was characterized as an art and not a science by the big bank economists during the recession they failed to forecast. Clearly economists and accountants have become the rectum of public policy designed by mini me dictators and their greedy friends in business in this province. Where were the declarations of the advantages of the HST tax policy years ago? Campbell lies - flips a coin - maybe I get away with it -maybe I don't and the next insect in my place pushes it through -- it's all good - for business.
Ms. Sterk has become de facto Gordon Campbell and Christy Clark's advocate. This is quite sad--no worse - pathetic-- considering the huge efforts made by her 'Green' party to promote proportional representation for the people (and for her party's self interest) knowing that this HST is the any cost political push of big business - its the best way of getting rid of hidden taxes according to Ms. Sterk---------when the best thing that could ever happen for the same people she wants fair voting for - would be to blow the HST tax out when its alleged advantages are on the scant side of dubious (at best). The cost of this message is - in the big picture- relatively cheap - because it tells the next asshole with a majority who wants to help his friends with benefits - be careful with the people.
Ms. Sterk missed an opportunity to place her party in the moral highground and I will wager she will get pummelled at the polls for so doing.
She ought to have stuck to her policy constituency - a hugely important one - the environment -- and tax policy relating to that - stick to what you know - or believe in - not tilting on a dirty teeter totter for other fools.
At the end of the day - a shrewd politician will know that the one cost - the 1.6 billion is easier to negotiate downward with a federal government - with a majority from Ontario (Bay St.) and Alberta (Shale Oil) --a residual interest in Quebec gone for decades and the third largest province (BC) - on the way out of your tent ----then to redeal the promised tax cuts to consumers.
No - this is very very 'unsmart'--if Christy Clark doesn't grab some of the BC Green vote in decline - Chris Delaney will -------- and oops so will the biggest dog in your park - the NDP.
James G
Jun 21, 2011 at 10:51pm
The HST is a simple shift of the costs of government from the boardrooms and onto the backs of the working poor. Read the third and independent part of the HST advisory mail-out if you don't believe me.
Ultimately, no-one who has watched the real character of the Green Party, federal and provincial, develop can be surprised by the fact that three quarters of the members at their AGM were in favor of "No" to extinguishing the HST. It is just a public relations dodge to claim the party "trusts its members" to make up their own minds. The truth goes to the heart of the party's dichotomy. It asks for votes from women, minorities, youth and low income voters with insincere planks in its platform while it runs candidates and is run by small business people with a closer outlook to the Conservatives than any other party, excepting only on environmental issues. It was no surprise to me that some members orchestrated a mass joining of the BC Liberals to support Christy Clarks' leadership bid. Well, perhaps they wanted to join some party, any party democratic enough to actually have a leadership convention and vote for someone as leader. So fracking Green!
Here we have the party that plays divide and conquer in the GVRD by claiming cyclists and pedestrians are subsidizing private automobile ownership but are silent about British Columbians in the North and Interior who actually are subsidizing transit in the lower mainland. We didn't hear much federally from Elizabeth May about the number of litres of fuel per month those ferries use to subsidize tiny island populations during her campaign though, did we? By their very own yardstick, the most petro-subsidized electorate in the country just elected her. Wait until they calculate how much Green policy if applied would cost them all!
The worst thing about this party is something that is not its fault. It is the media. Scrutiny is forgotten when the environment is on a party's lapel. It's as if every serious journalist who approaches them gets deflected by a statement as innocuous as "look at this cuddly little bunny," and you never hear any serious challenge to some of the ludicrous claims like the one above. Greens trust their members? No, they just know who they serve.
Birdy
Jun 22, 2011 at 1:44am
The HST vote amounts to deciding between two mobsters who will be extorting us for "protection" money.
Would you like Vinny Hotdogs to pick up the money every week, or Ugly Tony?
I'm going with Vinny Hotdogs.
glen p robbins
Jun 22, 2011 at 7:49am
Birdy - which is Vinny Hotdogs? It isn't extortion if people are paying it and not complaining. The complaining only started when the new rackateers came on - HST.
Argulion
Jun 22, 2011 at 8:39am
I think it is time for politicians and political parties to be responsible for their actions. The HST was brought in by the Liberal Party of BC shortly after an election campaign that said "HST is not on our radar."
IMO, The Liberal Party of BC is responsible for paying back the 1.6 billion to the federal government not the people of BC. Had the candidates been forthright the Liberal Party would have had a mandate from the people to bring in the HST. As it is now, it was brought in through the back door by deceit and forced on the people. The people that brought the HST in should be the only people that are fiscally responsible for repaying any monies; The Liberal Party of BC.
Yes Means No
Jun 22, 2011 at 11:45am
I amazed at the SHEEP like thinking of so called Political & Business "Leaders"...
(1) A change back to the PST should not mean back to the "old" PST it is an Opportunity to fix the PST's many flaws...
- Reduce the percentage like the HST,
- eliminate Corporate Deductions & Rebates,
- make it more efficient and automated requiring far less paper pushers.
- If you can "tweak/change" the HST you sure as hell can the PST, why is it framed as omg back to the old PST no changes possible?
(2) The HST is NOTHING more than a shift of the Tax burden onto British Columbians. Aka. Corporate Welfare.
(3) F.U.D - used to sell Bailouts & Taxes :), F. Fear, U. Uncertainty, D. Doubt, Politicians [every single party] & Corporations are masters at using it to scam the public.
(4) The Government should be looking at generating Revenues from increased RESOURCE Taxation...
... like Australia, the UK with North Sea Oil & Gas, Norway & Newfoundland & Labrador like Danny Williams did right here in Canada!!!
Government Revenues...BS OMG Lost Revenues FearFactor]
- Well put simply if Government does not flush money down the toilet...
- $600 Million for a Roof,
- $1 Billion + for "Smart" Meters,
- Billions on the Owe-lympics etc etc
Than you do not need to squeeze the poor working people of BC to pay for Government largesse & WASTE.
I am sick & tired of the F.U.D. used by Politicians & Corporations to try to "sell" us the voting public lies, lies & more lies.
I am Voting "Yes" to send a message & than get Vanderzam to do a recall / referendum to CHANGE the PST.
Birdy
Jun 22, 2011 at 12:18pm
re: Glen
Vinny Hotdogs is the PST/GST
glen p robbins
Jun 22, 2011 at 12:41pm
Thanks your Birdship