Hst

Why everyone should stop whining about the HST tax.

HST, the harmonized sales tax thing for Canada, why are people complaining about this? They just assume its a tax with no benefits and go on there lunatic petitions. This petition is a waste of time, they will just dismiss it, and if they do for whatever reason cancel, they will be forced to add another tax that is less beneficial to Canada. Let me do a simple equation.

HST- Helps business, increase in profits- More jobs available and hey maybe expand, more jobs and less people unemployed.- Increased economy around Canada.- Over periods of time price tags will go down.

Now often what I believe people think about HST is the price of purchasing things in shop will be more expensive right? Over time this tax will reduce prices in stores.

So please, tell me whats wrong with this tax?

Sales taxes are a tax on almost EVERY retail good. This proportionally taxes the poor more than the rich. Feel free to have a sales tax, but you need to couple it with an increase in capital gains and/or property tax if you want to be fair.

I have no problem with a sales tax. I think they are a great source of income. I'm just sharing the common argument against them.

The petition to get it repealed is only in BC, Ontario has not questioned it. I think it has a lot to do with misinformation. At first, everyone saw the pitch and thought "hey, that's great!" but on Canada day when HST hit everybody clued into what it did to their pockets.

Gas went up which was the big thing people noticed, and big expenditures (for instance, the cost of a funeral could cost 2 thousand more) shocked a lot of people. What they aren't realizing is because the companies that produce the materials to make the products that are sold are no longer paying the full taxes, they can be more competitive. This over time will cause prices to drop either way, but I don't think BC is really taking this into consideration.

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Originally Posted by Rota

Sales taxes are a tax on almost EVERY retail good. This proportionally taxes the poor more than the rich.

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But eventually the prices will go lower over time when the business goes on, and more job opportunity's will open. Though I understand what your going at.

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Originally Posted by AbstractAngel

The petition to get it repealed is only in BC, Ontario has not questioned it. I think it has a lot to do with misinformation. At first, everyone saw the pitch and thought "hey, that's great!" but on Canada day when HST hit everybody clued into what it did to their pockets.

Gas went up which was the big thing people noticed, and big expenditures (for instance, the cost of a funeral could cost 2 thousand more) shocked a lot of people. What they aren't realizing is because the companies that produce the materials to make the products that are sold are no longer paying the full taxes, they can be more competitive. This over time will cause prices to drop either way, but I don't think BC is really taking this into consideration.

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hehe, I guess you kinda deciphered I am from the province B.C, but yes I can agree, there is probably a lot of misinformation out there. Over time this will be forgotten.

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Originally Posted by crappyservers

But eventually the prices will go lower over time when the business goes on, and more job opportunity's will open. Though I understand what your going at.

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It doesn't matter if prices eventually drop. The simple fact is that the lower your income is, the greater percentage of income you spend on retail goods. The more money you make, the more disposable income you have to invest in financial vehicles that make more money. :princess:

Thus, the poor will always spend a greater proportion of their income on a sales tax, than the rich. :)

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Originally Posted by crappyservers

Why everyone should stop whining about the HST tax.

HST, the harmonized sales tax thing for Canada, why are people complaining about this? They just assume its a tax with no benefits and go on there lunatic petitions. This petition is a waste of time, they will just dismiss it, and if they do for whatever reason cancel, they will be forced to add another tax that is less beneficial to Canada. Let me do a simple equation.

HST- Helps business, increase in profits- More jobs available and hey maybe expand, more jobs and less people unemployed.- Increased economy around Canada.- Over periods of time price tags will go down.

Now often what I believe people think about HST is the price of purchasing things in shop will be more expensive right? Over time this tax will reduce prices in stores.

So please, tell me whats wrong with this tax?

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I don't live in Canada so I had to read up on this tax, your explanation was way off of what the tax is actually for.

In Canada, the Harmonized Sales Tax (HST) combines the Goods and Services Tax (GST) and Provincial Sales Tax (PST) into a single sales tax. This changes the PST from a cascading tax system, which has been abandoned by most economies throughout the world, to a value added tax like the GST.

Like the GST and PST, the Harmonized Sales Tax is a regressive tax. To maintain the progressive nature of total taxes on individuals, Canada and other countries have accompanied the change with a reduction in income taxes, and instituted direct transfer payments (refundable tax credits) to lower-income groups, resulting in lower tax burdens on the poor.

Though economists support the change and studies have shown it will be revenue neutral, polls show that 82% of British Columbians and 74% of Ontarians opposed it before it was implemented.

To me this sounds like a better step forward for Canada. I apparently still have quite a bit of reading to do because I am lost on how it affects Canadian citizens the way AA says it will. So bear with me on this, I am extremely uninformed on this and would like a little help understanding it more.

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Originally Posted by abracax

I don't live in Canada so I had to read up on this tax, your explanation was way off of what the tax is actually for.

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My apologies, the op was not meant to be a explanation really.

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Originally Posted by crappyservers

My apologies, the op was not meant to be a explanation really.

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Ok, I think I have a better understanding of the tax now. From what I get it's basically Reaganomics for the soc.ialist. It's a way to stimulate the economy and lesson the overall taxes paid every step of the way on services and products. In the long run it will stabilize prices and possibly lower some prices on minor products to help fight inflation.

Would this be a correct assessment?

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Originally Posted by abracax

Ok, I think I have a better understanding of the tax now. From what I get it's basically Reaganomics for the soc.ialist. It's a way to stimulate the economy and lesson the overall taxes paid every step of the way on services and products. In the long run it will stabilize prices and possibly lower some prices on minor products to help fight inflation.

Would this be a correct assessment?

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From what I understood yes, that is basically my understanding of it.

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Originally Posted by abracax

Reaganomics

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:oops: <shudders> :oops:

http://icanhascheezburger.files.word...-girl-doll.jpg

Shopkeepers are forced to become tax collectors and the added paper work and associated costs could actually cause them to delay employing more people.

These types of taxes do have a higher impact on low and fixed income earners. The other factor to be considered is that having a 10% sales tax (estimated tax figure) at the point of sale means that every time prices increase, for whatever reason, the tax take increases as well. We have a GST in Australia and I have never seen overall price reductions since it was introduced. Politicians will always try and tell you that you will be better off but I have yet to see that happen either.

[EDIT] Addendum:
If you ever ask a politician why they want to introduce a tax of this type, they will eventually admit that it is intended to "broaden the tax base". If you look at that phrase then you can see the reason why taxes of this type are more of a burden on the poor. Broaden the tax base, the base being the lowest income earners in the society and broadening that base means bringing into the tax-paying base those whose income is below the taxable threshold in regard to income tax. So a pensioner (for example) who spends 100% of their income on living expenses will now be included in the tax base and will be paying 10% of their income as tax. The same applies to all low income earners who live from paycheck to paycheck. On top of any other taxes that they are already paying they will also be paying 10% of their net income as sales tax. Meanwhile, a person with a high income, who only spends 50% of their income on living expenses will only be paying 5% of their net income as sales tax. These are also the people who can afford to pay tax accountants and lawyers to find ways to minimise the amount of income tax that they pay. That could mean that the % of their real net income that they spend on living expenses is even lower than 50%, so the amount of sales tax they pay would be even lower than 5% of their real net income.

(All numbers are example figures only as I don't know the actual rates being considered in Canada.)[/EDIT]

Rodri, from what I read about Canada's HST is that it is put in place to lesson the burden of taxes on lower incomes. As Lower incomes were paying out most of their income in taxes this now shifts those taxes to higher incomes as they are the ones with the major purchasing power.

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Originally Posted by abracax

Rodri, from what I read about Canada's HST is that it is put in place to lesson the burden of taxes on lower incomes. As Lower incomes were paying out most of their income in taxes this now shifts those taxes to higher incomes as they are the ones with the major purchasing power.

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Any general sales tax will affect lower incomes more than it affects higher incomes, for the reasons I stated earlier in this thread.

There are sales taxes that affect higher incomes more, but as I understand it, the HST is not one of those kinds of sales taxes. For example, a luxury tax on high ticket items ONLY (not just "ALL retail goods") would primarily affect higher incomes. They buy more cars and exotic goods that cost thousands of dollars. These luxury taxes on jewelry, and automobiles, and whatnot do affect the rich more. I do not think the HST is a luxury tax, or am I misreading the info about it?

I don't know what tax rates are in Canada and I don't know much about their tax laws. But one thing always seems to hold true in all capitalist economies and that is that the greatest proportional tax burden is always borne by low income earners, or as I prefer to think of them, ordinary working people. It's pretty basic really, if you have a capitalist system then you need to motivate people to get rich and if they do get rich, then you don't want to over-burden them with too much tax. That could be seen as putting barriers in the way of wealth creation. Whereas the minimum wage earners who make up the vast majority of the working population are an easy source of government revenue as there are so many of them.

If 1,000 people are forced to pay an extra $1,000 a week tax that is only $1,000,000 revenue but if 10,000,000 are forced to pay an extra $1 a week in tax, that is $10,000,000 revenue for very little pain on any one individual. So governments like a broad based tax scheme as it looks far more equitable and a small amount from each individual can become a very large amount in total.

The thing about broad based sales taxes is that they are simply a tool to gather revenue and nothing more. They do not encourage or discourage particular types of behaviour in ways that some other taxes or excises might. For example, a heavy tax on tobbaco may help to decrease the consumption of tobbaco products overall. But a general sales tax that is applied to most or all goods and services doesn't really change anything except the amount of money that you might have left after paying your bills.

High income earners may have to pay more tax under a GST/HST system but if they have any sort of savings or investments that they regularly contribute to then proportionally they will be paying less GST/HST tax as a percentage of their income than a low income earner who has to spend every cent they earn on living expenses.

I don't expect equity in tax laws in a capitalist system. That's not the way they work but I do wish politicians would stop trying to convince me how much better off I am now compared to any time in the past. It just isn't true.

The collapse of many nations has come when the classes were split too far. Policies that encourage the expansion of the wealth gap, only hasten the demise of a culture. England owned over 80% of the known world at one time. Now, it doesn't even own all of the British Isles. We all know what happened to French aristocracy during the French revolution. But, that's a conversation for another thread.

Rodri is totally correct. A blanket sales tax on nearly all goods does not influence buying behavior that much. And the politicians need to NOT try to sell it as a tax on the rich, it's a tax on EVERYONE!

The blanket sales tax brings in more tax dollars for more expensive items. If you are poor there is no way you should be buying a $6,000 plasma or a $7,000 gaming computer or $80,000 car. The rich spend more and spend more often, the tax affects those who spend and not those who don't.

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Originally Posted by abracax

The blanket sales tax brings in more tax dollars for more expensive items. If you are poor there is no way you should be buying a $6,000 plasma or a $7,000 gaming computer or $80,000 car. The rich spend more and spend more often, the tax affects those who spend and not those who don't.

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Noone is denying that the rich pay more dollars in taxes.
The argument is that the poor pay "proportionally" more through a sales tax.

A citizen that makes $25,k and spends 1,k on the the sales tax has spent 4% of their income. A rich person making $400,k could spend 8k in sales taxes, which is 2% of their income. They spend EIGHT times as much as the poorer person, but only half as much income percentage.

It is my understanding that that is exactly the reason for implementing the HST, so that the proportion of pay towards sales tax becomes far more even than it was in the past.

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Originally Posted by abracax

It is my understanding that that is exactly the reason for implementing the HST, so that the proportion of pay towards sales tax becomes far more even than it was in the past.

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That may be the line they are feeding the common public. But, unless there's something else in conjunction with the HST, a general sales tax will ALWAYS affect the poor far more than it affects the rich.

Is there a luxury tax, or a capital gains increase, or a property tax increase? Is there something else that is part of the "HST" package that would actually do what they are advertising? Just a general sales tax will not do it.

VAT taxes can be a good idea when they replace cascading taxes. Not so when they are just slapped on to the end.

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Originally Posted by abracax

Ok, I think I have a better understanding of the tax now. From what I get it's basically Reaganomics for the soc.ialist. It's a way to stimulate the economy and lesson the overall taxes paid every step of the way on services and products. In the long run it will stabilize prices and possibly lower some prices on minor products to help fight inflation.

Would this be a correct assessment?

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Yes, basically the way "AbstractAngel" relates it is this:

On some things (Whatever the government deemed necessities) you used to either pay no tax, or only half the tax (7%). When the HST came into affect, you instantly overnight paid %13 on everything, across the board. This is a noticeable change, and something that outrages many people (in BC for example, us Ontarians are so nihilistic we wouldn't care if you upped it %20 lmao j/k j/k...). The bigger picture is that in the long run, the tax break on manufacturers all along the way will eventually drive prices down, so people will pay the same they used to (or even less) because of competition, and businesses will be better off. But this will take time and patience, it's not an overnight thing, and not technically a guarantee (though it's proven to be positive in many places). This is why people are upset, because all they have seen right now day-to-day is higher prices, with no actual promise prices will decrease if the companies wish to be unitedly greedy instead of competetive.

Now, I'm being generic, but here is a way to break it down. A break down of how it goes now vs how it used to go (old system was in red):

1. The people who gather scrap metal sell it $0.50 to the bolt manufacturer.
The people who gather scrap metal sell it to bolt manufacturer at $0.50 with 7% tax added on.
2. The people who manufacturer the bolts sell them at $1.00 to the Toolkit Assembly Company.
The people who manufacturer the bolts sell it to the Toolkit Assembly Company at $1.00 with 7% tax added on.
3. The toolkit company sells it to WalMart for $10
The toolkit company sells it to WalMart for $10 with 7% tax added on.
4. The customer purchases the finished product for $20.00 with %13 tax.

Now, that adds up, and fast. With the new system, it doesn't have unnecessary taxes on manufacturer, in the long run helping with taxes. Since the consumer used to only pay %13 on some items/services and 7% themselves on others, they notice the change more, but in reality, those prices will decrease because the people making the products won't have to spend as much creating the product, shipping it, etc.

I despise taxes but I like the way the US does it, it makes more sense lmao