HST VS GST/PST

HST response

I feel compelled to respond to the letter by Yukon Eric Holopainen published in The Morning Star July 10. His opinion is his but it is technically incorrect.

1. He points out that different wage earners pay the same rate of tax. Of course that is correct but it is the same if we go back to the PST/GST. Do minimum wage earners get a break on GST/PST? Of course not. He talks of 12 per cent HST but ignores the fact that it will reduce to 11 per cent and finally 10 per cent. HST does not come off of wages (in his example) but is paid on purchases and not all purchases have HST – basic groceries, residential rent, prescription drugs, eyeglasses etc. Although all British Columbians will pay the same rate of HST (just like PST/GST) the wealthy will of course pay much more because they spend a lot more. They buy larger more expensive houses, cars, restaurant meals, fancier furniture etc. Paying HST can be a choice that many people can avoid – buy your steak at the grocery store instead of the restaurant and it will be tax free. Buy a used Chevrolet instead of a new Mercedes and you’ll save a whole bunch.

2. His comment on creating jobs is simplistic. The world has just gone through a great financial crises and is still far from full recovery – this includes B.C. A tax change such as this requires time to see results in employment and economic activity. 140 countries covering 75 per cent of the world’s population have switched to a HST (VAT) system because of its efficiency. Let’s not go back to an old and tired and complicated PST/GST regime.

3.  Of course the government will get more taxes – the wealthy will obviously pay more. But we need the revenues for everything we ask government to provide – schools, hospitals, medical care, roads etc. What is wrong with that? Yukon says none of the HST will go to these, but he is incorrect. HST goes to general revenue which is spent on all government services.

Remember, it will take two to three years to return to a PST/GST system with the associated costs for government and business. Let’s not forget that we will have to hire about 350 PST tax collectors, auditors, clerks etc. How about their ongoing costs for office space, computers, desks, holiday pay, pensions, sick days, electricity, paper etc.?

Is a new provincial bureaucracy what we really need and want to pay for? Not me.

 

Stu Coffey, Vernon