Two weeks ago we found out the HST was dead and we would go back to GST and PST. Since then the airwaves have been filled with more confusion and flawed economics.
While a simple single tax is better than two separate taxes, I opposed it because it was poorly explained, made confusing and we were not told the truth through the process.
Without going back to the beginning, the ads last spring asked if we wanted to be taxed at 12 per cent or 10 per cent. It didn't say: the lower tax might not come into effect until the budget got balanced, it did not say it would be at least three years from now, it did not say it would be a future government who would have to do the deed and it did not say the business tax break would have to be reduced to get it. No, it simply asked: do you want 10 per cent or 12 per cent? Misleading at best, or not truthful, I say.
Now Finance Minister Kevin Falcon is complaining about having to give back some $1.6 billion to the feds. What did he do with this money? Some say we have yet to get it.
Falcon says it is a big problem to get the money to pay back. As I observed a while back, the Globe & Mail had analyzed the situation and found that B.C. was taxing us an additional $800 million each year with the HST.
So if you set aside the extra taxes being collected, starting in 2010, and assume we repay next year, three years at $800 million per year is more than the amount to be repaid.
Businesses have been grumbling. Some say businesses will relocate to Ontario. Did that really happen back a few years ago when we had the PST?
One of the platforms of the HST was that businesses could now reduce their prices as their costs were going down. So, who can recall seeing price reductions since HST came in? (Don't all stand at once.)
Will it cost money to organize a way to collect the PST? Yes. Will consumers pay less? Yes, by at least $350 per year. Will businesses pay more? Yes as result of not getting a PST refund.
Why does it take almost two years to roll a tax back but only months to impose a new one?
That's one riddle of this mess to which there has been no good response.
What might have been done to make it more acceptable? Immediately reduce the B.C. portion of tax, say from five per cent to four per cent so the HST would have been 11 per cent.
That might have been seen as tax neutral. It could have been taken as a "peace offering" and might have made enough of a difference to have British Columbians vote to retain the HST.
Did it happen? No. Why? You need to ask the Liberal MLAs why they were stone deaf on this issue.
