Tuesday, December 15, 2009

Put up your hand if you (think you) understand HST

That's the question being asked in today's National Post.

What’s there to understand?

Ed Clark, CEO of TD Bank successfully lobbied Dalton McGuinty for the HST that will see consumers pay a 13% tax on everything that raises another $2-3 billion a year for the Ontario government. The Ontario government puts that money in a box, wraps a big ribbon and bow around it, and hand this gift wrapped goody to corporations (like TD Bank) in the form of a windfall profit, in exchange for corporations (like TD Bank) doing nothing. Meanwhile the underground economy will sky rocket. McGuinty will be thrown out of office and the CONs will occupy Queen’s Park once again. Ditto for BC. Ignatieff passes on a huge opportunity to connect with voters as a man of the people and sound economic principles, as opposed to an instrument of Bay Street and Big Business, making him Harper’s look-alike twin-brother.

Apart from that, what’s there understand?

Mind you, the stupidity aspect on the part of politicians like McGuinty and Ignatieff, will never be understood. Some things in life defy comprehension. like political suicide. Just wait until the tax comes into effect on July 1, 2010 (Canada Day no less) and you'll know exactly what I mean.

Put up your hand if you understand HST

(Didn't think so)

Matt Gurney,
National Post
December 15, 2009

I'm not a big fan of shopping. Unfortunately, 'tis the season. Over the last two weeks, I've had to shop not just for the holidays, but to stock up a new home.

Everywhere I go, instead of being bombarded with stock comments on the weather or generic saccharine Christmas cheer, people are chatting me up about the Harmonized Sales Tax. The HST will go into effect in Ontario and British Columbia next summer, and the people I've seen shopping recently aren't happy.

"Just another f-----g tax grab," opined one shopper. "Stupid government is bleeding me dry," said another. These customers were looking to buy now and save later, they told me, obviously delighted by the chance to screw the government out of an extra 8%. The only people who seem happy about the HST are salespeople, eager to use the impending imposition of the blended tax as a marketing ploy.

" Oooh, it's good you're buying this now," an earnest young hardware store employee told me. "It'll cost you 13% more in six months." Problem is, that's wrong. I paid exactly as much tax when I was shopping for home furnishings this weekend--13% --as I would next summer.

The HST is going to hurt some consumers. There's no doubt about that. A lot of items that were once exempted from provincial taxation will now get dinged for an extra 8% -- such as fuel for your car, electricity and haircuts -- and that will hurt a lot of families. But most of the customers now roaming the malls won't save a cent on tax. Their ignorance of the HST, combined with the marketing savvy of the salespeople, has them thinking they just pulled a fast one on Dalton McGuinty and his boys, when really, the joke's on them.

The fact that people are so ignorant about this major economic shift is worrisome, but not surprising -- tax policy is boring. Earlier drafts of this column almost put me to sleep, and that's never a good sign when you're writing. But just because the HST is boring doesn't mean it isn't worth talking about. Lots of vital things are dull -- few of us get excited about plumbing, but I'm willing to bet you'd miss running water.

Premier McGuinty has obviously elected to govern by stealth on this file; no doubt fearful of triggering a populist backlash, he's correctly determined that so long as his government keeps a low profile, Ontarians won't notice until it's a done deal. That may be good politics, but it's lousy leadership.

All the legal steps have been taken -- the HST will go into effect on July 1, 2010. It remains to be seen whether it'll help or hurt the economy. All I can say for sure is that for better or worse, this decision was made by the McGuinty Government against a backdrop of almost total public ignorance. Even if the economy is helped by it, it's hard to consider that good news.



Dr Mike said...

Almost 75% of the people in both provinces do not want the HST.

So far so good.

Iggy & Uncle Dalton say pfffffftttt to the people & say yes to the HST.

Therefore :

Stand-up against the HST = many many VOTES

Take the Iggy & Uncle Dalton stand = 0 votes.

Easy peasy , the Liberals will be out by the curb like last weeks garbage.

Dr Mike

Hishighness said...

We've had the HST in Nova Scotia for years and the Province hasn't exploded yet... hold on tho I'll check out the window...

...nope, it's still there. (Although being run into the ground by the NDP, but that's not the HST's fault)

In some instances the HST also saved us money. It used to be that we'd get charged 11% PST and then 7% GST separately, but they would calculate the tax on the already taxed price.

100 * 1.11 = 111
111 * 1.07 = 118.77

So instead of actually paying 18% like we were supposed to we were paying 18.77% so when the HST came in we saved that extra 0.77%

Now our HST is down to 13 thanks to Emperor Steve lowing the GST to save us all.

I dunno if they do the same thing in BC and Ontario currently.