HST reversal wrong way to go

Response makes financial sense of the Harmonized Sales Tax

I must write in response to the opinion of Monika Karys in the letters to the editor. She states she is opposed to constantly increased taxes to try to offset claims of underfunding in every major jurisdiction funded by taxes. She states she understands how budgets work from her experience working at the municipal level. She then lauds the reversal of the HST as a good first step. Opposition to the HST does not achieve her other goals at all, on any level.

I worked in banking for over 40 years, most of it in commercial finance, so I understand budgets too. Rule one – they should ensure that revenues cover expenses,  and work to increase bottom line resources partly by reducing costs; so there would be more “net dollars” to allocate to areas that need it most.

This principal applies equally to the public and private sectors.

In fact, the HST was slated to reduce taxes (from the current 12 per cent to 10 per cent). The collection of the taxes under HST was much more efficient, and thereby was much less costly to all of us. Fewer very highly compensated public sector employees were needed to administer the program. Now we must rehire many new public sector employees, reinstate an antiquated inefficient system, and continue to pay 12 per cent instead of 10 per cent.

I’m not sure how this result ties in at all to her other claims. Increased costs to collect, increased revenues from higher taxes, more government employees whose compensation dollars could have been reallocated to another more needy area, doesn’t seem to tie into the desire to control or reduce all these areas.

The reversal of the HST was not a good decision – in my opinion, the negative response was made primarily to send a “short term” message to the government of the day, and the results will end up damaging all of us. My hope is that the next government reinstates the HST, by being honest up front that it is, by far, the best and most fair system for all of us in the province (a “user pay” system, with ample tax credits for low income citizens to offset the relatively higher costs for this group).

She does raise the growing spectre of “entitlement” that looms ahead, but that is a subject for another day.

 

Dave Murison, Vernon