Bill Tieleman unspins Premier Gordon Campbell's defence of the Harmonized Sales Tax, one line at a time.
BC Premier Gordon Campbell made his longest defence of the Harmonized Sales Tax in a 783-word opinion editorial article submitted - and duly printed - by many BC newspapers.
Like much of what the Premier and his government have said about the HST since he and Finance Minister Colin Hansen announced it would be imposed on July 23, 2009, his article is full of spin, misleading and incomplete statements and misinformation.
To provide an antidote to the Premier's sugary-sweet view of the HST, I have taken the liberty to annotate his article with my own debunking and fact-checking - so readers can judge for themselves whether the HST can be supported based on the Premier's arguments.
And even though the $1.9 billion a year HST has been imposed as of today - Canada Day for full irony - this article is HST-free.
* * * * *
ANNOTATED OPINION-EDITORIAL
WHY THE HST, WHY NOW?
By Premier Gordon Campbell
[And Bill Tieleman]
June 29, 2010
VICTORIA - July 1 is the first full day the Harmonized Sales Tax takes effect
Or if you prefer, is imposed without notice prior to the May 15, 2009 election, without consultation, without a vote and despite the overwhelming majority of British Columbians opposed
and I know that most British Columbians are concerned about what it will mean to them and for their family budget.
How about outraged?
I understand British Columbians from every region have expressed frustration and anger about how the HST was implemented.
Duh. Fight HST got a minimum 15% of all registered voters in every one of BC's 85 ridings to sign a citizens Initiative petition demanding elmination of the HST, with at least 11 ridings obtaining more signatures than your Liberal MLA got votes in the last election.
I know you have many questions for our government and for me personally.
Questions that should have been asked before the election.
Why did we say we were not considering an HST before the election?
Because we would have lost an election over the HST.
What made us change our position?
Because we had already lied about the size of the deficit - it wasn't $495 million - it was $2.8 billion!
Then we panicked - that's more than seat cushion money. So we called the federal Conservatives just three days after the election and begged them to give us the $1.6 billion HST "implementation" money.
Why are we bringing in the HST when much of the public opposes it?
Funny, that's what Blair Lekstrom asked me, before he quit the BC Liberal cabinet and caucus over the HST.
The answer is simple - because we don't care what the public think. If we did, we would have told them about the HST before the election.
We figure the public are too stupid and memory-challenged to remember the BC Liberals imposed the HST by the 2013 election.
How will the HST impact my family?
The average family will pay $521 more a year in new HST costs but many British Columbians will get hit far harder, according to the Statistics Canada study.
You deserve answers to all these questions.
But we're not going to give you them - that would be fatal!
Although you may not have seen much media coverage before last summer, combining the PST and GST to create a harmonized sales tax is something that has been discussed publicly for many years.
And soundly rejected each time by BC, including by my former Finance Minister Carole Taylor and my former Revenue Minister Rick Thorpe in the Legislature in 2008.
Federal governments - past and present - and business organizations - large and small across the province - repeatedly asked us to harmonize the PST with the GST because it eliminates unnecessary costs, reduces administration and is more transparent.
But not the public - who would get hosed by the biggest tax transfer in BC history, shifting $1.9 billion in HST costs onto consumers and off of my friends in big business. And those "unnecessary costs" simply getted downloaded onto the little guy who has to pay for it all.
Each time we were asked, we said we would not consider it for two primary reasons. First, it would eliminate B.C.'s ability to set our own tax rate.
And it still does - BC has given up its tax sovereignty to Ottawa for the most part.
Second, we wanted to be able to shape our tax regime with flexibility that would allow us to exempt certain goods and services from being taxable. It wasn't until last year that kind of flexibility was available.
As opposed to the Provincial Sales Tax, where we had complete and absolute flexibility to exempt any and all goods and services from provincial tax. That's why bicycles, restaurant food, vitamins and services like massage therapy, accounting, haircuts and much more were exempt.
Under the HST, BC can only exempt 5% of all taxable goods and services - so the extra 7% must now be applied to pay for shifting the tax onto consumers and subsidizing big business. Sorry suckers.
After the election, the Minister of Finance and I were informed that the Province's financial situation had deteriorated significantly.
Honestly, we never knew before that, even when noted economists like Helmut Pastrick of Central One Credit Union said our previous 2009 budget numbers were absurdly low. Ha-ha-ha-ha-ha.
I asked officials to find a way to meet our budget targets without cutting core services.
Because I've cut core services so many times before.
By late May 2009, it was becoming clear that after months of discussion Ontario had negotiated new flexibility within the HST model.
Actually, it was becoming clear far sooner than that, especially after Ontario announced it was imposing its own HST in March 2009!
Through further discussions with the federal government, we learned of additional flexibility that would allow provinces to set their own tax rate, instead of adopting a national rate of 13 per cent. This allowed us to set our own rate at 12 per cent, the lowest in the country.
Wow! Great news that we could now tax you an extra $1.9 billion a year on things that weren't taxed before - but at Canada's lowest HST rate!
And it will never go up - I swear - trust me!
We were also offered new flexibility that would allow us to exempt products we felt would be important to families - children-sized clothing and footwear, books, motor fuel, diapers, car seats and a range of other products.
In total, just 5% of all potentially HST-taxed products - everything else goes up.
Besides, I already put a carbon tax on gas and fuel - did I mention it goes up 1.1 cents a litre today also?
But enjoy those non-HST diapers - you may need them when you see how many things the HST does apply to! Ha-ha - just kidding.
In addition, the federal government offered $1.6 billion in transition funding. That meant we could reduce the future debt we would pass on to our children and support increased funding to both health care and education.
Even though you - the same taxpayer - will pay $1.9 billion this year and forever, we thought getting $1.6 billion in a one-time-only payment was well worth it! After all, we have good financial management skills.
With those new conditions in place, we asked ourselves if the HST would strengthen the Province's economy as we move through the global economic downturn.
It won't, as it reduces consumer spending and discourages buying goods and services at a higher rate, but we did ask.
Would the HST allow our industries and small businesses to better compete internationally and within Canada?
Not really - the USA and China don't have an HST, while Alberta has no provincial sales tax and Saskatchewan and Manitoba have rejected the HST.
Would it create jobs?
Not in the restaurant industry, which fears losing up to $750 million in sales and thousands of jobs due to the HST on food, or the new home building industry, which will be hit by significant taxes on homes over $525,000, or other service industries where they will have to charge clients an extra 7% tax for nothing.
Would it give business the ability to pay higher wages and lower prices?
Sure - unless they just decide to keep the money for themselves. Nah - that would never happen.
Study after study confirmed the HST would do all those things. World-renowned economist Jack Mintz from the University of Calgary found that moving to an HST will create more than 110,000 jobs, attract over $11 billion in new investment, increase wages and lower prices.
We were so sure that we didn't even bother to commission any studies before decided to impose the HST. We hired Jack - after he wrote the same report for Ontario - and he went all out, producing a 13-page study! 13 pages! It's exhaustive - and it's the only one we ordered.
And it came out months after we made our decision.
Don't worry that a Manitoba government study of the HST found that it would impose significant harm to consumers and the economy - or that Mintz previously wrote a report for Ontario that said the HST would cost that province 38,000 jobs!
Those working in small business, forestry, mining, energy, agriculture, retail, transportation and construction will realize immediate and direct benefits.
Unfortunately, not one union representing workers in those sectors believes a word we or their employers say about the HST - but the owners - outside most small businesses which will suffer - are very happy!
For the rest of us, the stronger economy will mean more job opportunities, stronger communities and more revenues to support critical public services.
Unless the HST hurts our fragile economic recovery and the opposite happens, or unless you work in one of the thousands of businesses negatively impacted by the HST and lose income or even your job.
The HST, combined with our other tax reductions, will soon make British Columbia one of the most attractive places to invest and do business anywhere in the world.
Unless you own a restaurant, a barber shop, a massage therapy clinic, a consulting firm, build new homes or vacation homes, working in the performing arts or sports - where ticket prices jump 7%, are a doctor with a 7% business rent increase, run a funeral home or are an investment counsellor - 7% more for consulting clients, or a realtor - 7% more tax on your fees charged clients, or work in the travel or airline industry - 7% more on domestic travel, or - well, I could go on and on but you get my point!
I know many people feel like they are paying more and getting less.
Because it's true!
That's why over the last nine years our government has acted to leave more of people's hard-earned wages in their pockets. We've cut income taxes by at least 37 per cent for individuals since 2001, and British Columbians now pay the lowest personal income taxes in the country if you earn less than $118,000.
But we've also increased a wide range of user fees to make up for it - like jacking your BC Medical Services Premiums by 50% - and reduced or eliminated coverage for physiotherapy, massage therapy and other treatments.
And we refuse to increase the minimum wage despite over 8 years without a raise for the poorest British Columbians.
The after-tax size of an average British Columbian's paycheque today is considerably higher than it was in 2001. An individual earning $50,000 a year pays $2,012 less in provincial income taxes today. That's more than $2,000 for individuals to save or spend as they choose.
Until the HST kicks in that is - I'm taking it all back!
Cutting taxes has helped our economy stay strong enough that we've been able to make record investments into health care and education.
And you'll have noticed that there are no waiting lists for surgery anymore, no overcrowded emergency rooms anywhere in the province and every school district in BC loves us because there are no school closures or layoffs for teachers or staff! We done good!
The HST has not been good short-term politics.
My party is now at 26% in the latest polls, believe me I know! We are cooked!
But in the end, everyone has to decide whether they are going to do what is right or what is easy.
For me, giving a $1.9 billion to big business as my parting gift as I head out the door and leave the BC Liberal Party in ruins is quite easy - and expressing their gratitude to me afterwards is the right thing for them to do!
I believe the HST is the right thing for our Province's economy and for our children's future.
No one else does, but I do - and I'm still the Premier for a few more months. If they don't like it, your kids can move to Alberta or Washington state.
Change today will make us stronger tomorrow.
But not the kind of change that comes from the Fight HST Initiative or especially Recall!
Please don't Recall enough BC Liberal MLAs to force me to rescind the HST!
-30-
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44 comments:
That was very nicely done.
Congratulations and THANK YOU.
I wonder if the former deputy minister to the Minister of Finance, Paul Taylor, could offer one of his "blabby" opinions about the need for the HST.
Bill, we must all thank you for the job you have done on the petition. It would have been easy to simply say"Well we must roll over and maybe Gordo will lose the next election" Your review of Gordos line of BS makes for good reading.And the whole thing was done with class and at a pretty small amount of money. On Gordos side of the argument, we the tax payers are covering the total cost besides the new increases effective today. well done folks, it has shaken Gordo and his gang to the core.
Great rebuttal, but one formatting correction please!
The black lettering drops off about halfway through the article, and then it all turns red, including Campbell's words.
Of course it could just be my eyes - seeing red over the HST!
Sorry Anonymous 4:46 p.m. - I don't see any problem on my computers with the formatting.
If anyone else does please let me know.
I did earlier, but now I don't...
Sacha Peter's Spin-free discussion on HST
There has been so much spin about the HST. My post comes from both an accounting background and a physics background (two professions that might seem quite distant have a lot in common). I am also very well versed with income tax legislation and government policy concerning finance in general.
Both sides of the HST debate have spun the facts so hard that it is difficult to get legitimate analysis on it. The following is an attempt at clarifying the HST, as I see it.
Here's a quick snip...
Q: Who is this economist Jack Mintz the government always quotes, what was his research?
A: The government has always been quoting this study by Jack Mintz. Unfortunately for Mr. Mintz, the government focused on a single paragraph in the report, when Mintz was comparing the effects of both corporate tax decreases and the harmonized sales tax on capital investment – the only issue is that capital investment is not operational cost savings. Previous experience in the Atlantic provinces would suggest that the positive effects of harmonization are significantly less than advertised. It should be noted that other economists have been quite silent about this issue, probably both for political reasons and policy reasons.
You have made one BIG mistake here Bill, and that is the Campbell actually could write a defense of any policy.
This guy is more likely to write letters to Penthouse Magazine or to High Times than anything remotely appearing to be public policy.
Like his brain, the other one . . . at the Fraser Insitute ghost wrote it for him.
The GREAT SATAN
Let's just wait for the result.
The petition will pass.
There's no sense in wasting pixels going over and over what Campbell has said, since the HST is here, it will be up to the NDP to get rid of it.
Nice work Mr. Tieleman. I have stated as a business owner and an employer that we will not be lowering prices due to the HST and no other businesses I have talked to will be. The HST is bad policy for all the reasons you mention above.
Thank you Bill, this has been a long road and full of pitfalls. You are a great citizen!
I'm getting some sort of virus warning from your site right now Bill - its probably nothing but just in case this is the message that pops up:
"NoScript filtered a potential cross-site scripting (XSS) attempt from [http://billtieleman.blogspot.com/]. Technical details have been logged to the Console."
No I don't have any idea what it means.
Thanks for all the ongoing hard work, and Happy Canada Day - you are a true patriot!
Intelligent Idea Sir
We admire your opinion to save the tax with these great thoughts.
To bad the most important question can never be answered. Even without HST and reverting back to PST, social services and deficits are a huge burden. It's either less services or more tax. There's no gold at the end of the rainbow.
Once again, most of you have taken an issue, Googled it, found some superficially related facts or quotes from people, quickly read them, then applied it to this issue and therefore place it out of context. It is clear you have no real understanding of economics, its social, historical, or strategic implications on this issue, or any.
Page 1 again
“To bad the most important question can never be answered. Even without HST and reverting back to PST, social services and deficits are a huge burden. It's either less services or more tax. There's no gold at the end of the rainbow.”
By Anonymous 12:59AM
Actually, it can be answered by no less an authority on business than the Oracle of Omaha, Warren Buffet in his 2003 Annual Report on Berkshire Hathaway Inc. (excerpts below). While it relates to the U.S., the same can be applied here in Canada and particularly in BC.
http://www.berkshirehathaway.com/2003ar/2003ar.pdf
“Berkshire, on your behalf and mine, will send the Treasury $3.3 billion for tax on its 2003 income, a sum
equaling 2½% of the total income tax paid by all U.S. corporations in fiscal 2003. (In contrast, Berkshire’s
market valuation is about 1% of the value of all American corporations.) Our payment will almost
7
certainly place us among our country’s top ten taxpayers. Indeed, if only 540 taxpayers paid the amount
Berkshire will pay, no other individual or corporation would have to pay anything to Uncle Sam. That’s
right: 290 million Americans and all other businesses would not have to pay a dime in income, social
security, excise or estate taxes to the federal government. (Here’s the math: Federal tax receipts, including
social security receipts, in fiscal 2003 totaled $1.782 trillion and 540 “Berkshires,” each paying $3.3
billion, would deliver the same $1.782 trillion.)”
“…tax breaks for corporations (and their investors, particularly large ones) were a major part
of the Administration’s 2002 and 2003 initiatives. If class warfare is being waged in America, my class is
clearly winning. Today, many large corporations – run by CEOs whose fiddle-playing talents make your
Chairman look like he is all thumbs – pay nothing close to the stated federal tax rate of 35%.”
And finally,
“…We hope our taxes continue to rise in the future – it will mean we are prospering – but we also hope that the rest of Corporate America antes up along with us.”
I had the opportunity to catch his follow-up comments when speaking with Lou Dobbs on CNN in May 2003 and he clearly stated that in America the top Corporations and top Income Earners were not paying anywhere near enough in taxes. The same can be said in Canada.
I note that further in his letter to the shareholders he covers the dangerous territory of corporate governance, which would apply as much to Canada as to the United States. This one letter alone should be required reading by all politicians and academics. So, who should we listen to, academics who look solely at numbers without any underlying social responsibility or the chairman of one of the largest corporations in America and who is reportedly the second wealthiest individual in America.
Let’s be clear here, no one likes deficits in governmental finance but there are times in the economic cycle where governments must run deficits to ensure that existing programs and services are maintained at a specific level. What we currently have is a situation where priorities seem to be skewed by spending in new areas that perhaps could either be slowed down or put on hold, such as, “all day kindergartens”, reductions in corporate taxes (which for large corporations are scheduled over time to drop to 10%), or even the new roof on BC Place. It becomes a debate about spending priorities during tough economic times.
Page 1 again
“To bad the most important question can never be answered. Even without HST and reverting back to PST, social services and deficits are a huge burden. It's either less services or more tax. There's no gold at the end of the rainbow.”
By Anonymous 12:59AM
Actually, it can be answered by no less an authority on business than the Oracle of Omaha, Warren Buffet in his 2003 Annual Report on Berkshire Hathaway Inc. (excerpts below). While it relates to the U.S., the same can be applied here in Canada and particularly in BC.
http://www.berkshirehathaway.com/2003ar/2003ar.pdf
“Berkshire, on your behalf and mine, will send the Treasury $3.3 billion for tax on its 2003 income, a sum
equaling 2½% of the total income tax paid by all U.S. corporations in fiscal 2003. (In contrast, Berkshire’s
market valuation is about 1% of the value of all American corporations.) Our payment will almost
7
certainly place us among our country’s top ten taxpayers. Indeed, if only 540 taxpayers paid the amount
Berkshire will pay, no other individual or corporation would have to pay anything to Uncle Sam. That’s
right: 290 million Americans and all other businesses would not have to pay a dime in income, social
security, excise or estate taxes to the federal government. (Here’s the math: Federal tax receipts, including
social security receipts, in fiscal 2003 totaled $1.782 trillion and 540 “Berkshires,” each paying $3.3
billion, would deliver the same $1.782 trillion.)”
“…tax breaks for corporations (and their investors, particularly large ones) were a major part
of the Administration’s 2002 and 2003 initiatives. If class warfare is being waged in America, my class is
clearly winning. Today, many large corporations – run by CEOs whose fiddle-playing talents make your
Chairman look like he is all thumbs – pay nothing close to the stated federal tax rate of 35%.”
And finally,
“…We hope our taxes continue to rise in the future – it will mean we are prospering – but we also hope that the rest of Corporate America antes up along with us.”
I had the opportunity to catch his follow-up comments when speaking with Lou Dobbs on CNN in May 2003 and he clearly stated that in America the top Corporations and top Income Earners were not paying anywhere near enough in taxes. The same can be said in Canada.
I note that further in his letter to the shareholders he covers the dangerous territory of corporate governance, which would apply as much to Canada as to the United States. This one letter alone should be required reading by all politicians and academics. So, who should we listen to, academics who look solely at numbers without any underlying social responsibility or the chairman of one of the largest corporations in America and who is reportedly the second wealthiest individual in America.
Let’s be clear here, no one likes deficits in governmental finance but there are times in the economic cycle where governments must run deficits to ensure that existing programs and services are maintained at a specific level. What we currently have is a situation where priorities seem to be skewed by spending in new areas that perhaps could either be slowed down or put on hold, such as, “all day kindergartens”, reductions in corporate taxes (which for large corporations are scheduled over time to drop to 10%), or even the new roof on BC Place. It becomes a debate about spending priorities during tough economic times.
Page 2
Did the provincial government screw up on the HST? Absolutely! To compound the screw up, we are supposed to believe that this change was not on their “radar” prior to the provincial election in 2009. Let’s see:
January 2009 McGuinty announces Ontario is reviewing the implementation of HST for Ontario and engaging Ontarians in a discussion about it. (Apparently we have to believe that alarm bells did not ring loud and clear at the Ministry of Finance)
March 2, 2009 B.C. Budget Deficit projected at $495 Million
March 2009 Ontario Budget announces the implementation of HST in Ontario (again, no alarm bells are ringing at the Ministry of Finance)
April/May 2009 Liberal response to Restaurant Associations’ concern about HST: (same response given to the Greater Vancouver Home Builders Association)
“Such items that are currently PST-exempt include energy-efficient appliances, membership fees for clubs and gyms, newspapers and magazines, taxi fares, restaurant food and the professional services of architects and accountants. This is a major concern.
“The harmonized GST would make it harder for future provincial governments to lower or raise sales tax rates, which reduces flexibility. In short, a harmonized GST is not something that is contemplated in the B.C. Liberal platform.” (Thanks to a column by Mike Smythe)
May 12, 2009 B.C. Election Day
May 14,2009 From a column by Vaughn Palmer “But the starting point on this particular road to ruin was May 14, when the premier ordered the finance ministry to find the money that would allow him to save face on the deficit”
May 26, 2009 Budget Deficit could be 4 times higher than originally projected.
September 1, 2009 Revised B.C. Budget Deficit now projected to $2.775 Billion (5.6 times higher than projected)
What these dates indicate to me is that there is something very wrong with the Ministry of Finance in Victoria. There are big questions here that the voters have a right to have an answer to (and these are just a couple of examples):
1. When Ontario made its’ initial announcement, where there no bells going off in Victoria? If not, why not? And again, when the Ontario Budget came down still no bells ringing in the ministry!!
2. Are the premier and the minister of finance so disconnected from each other and apparently from the ministry staff as to not question this move by Ontario?
3. Realizing that tax receipts start coming in during April, there must surely have been some indications that revenues were down substantially and to be blunt, it must have been much sooner than we have been told. Virtually every economist, pseudo economist and business leaders were not buying the original deficit numbers, especially considering our sister province next door on February 24th was projecting a $4.7 Billion deficit. How could we be coming in at one tenth of that number?
When the minister stated HST was not on his radar, I have to wonder what was on his radar, apparently not much.
This government seems to believe there is a “pot of gold at the end of the rainbow” and that is the overburdened, nickel and dimed individual taxpayer. We apparently have trees’ in our backyards just sprouting $100 dollar bills. We are seeing as Mr. Buffet noted a new type of class warfare and one that needs to be addressed.
wow, it only proves Stan can cut and paste. My 5 year old can do that.
Not too smart eh Stan. Quoting your "Let’s be clear here, no one likes deficits in governmental finance but there are times in the economic cycle where governments must run deficits to ensure that existing programs and services are maintained at a specific level".
Most of us don't want to burden our children and grand children. If you can't afford it, don't spend it. Running deficits means overspending and people living beyond their means. Either cut services or pay taxes. No other solution Stan. You can't simply print money.
I was watching the House of Commons, on the telly. A motion was passed by the entire House to, give millions of our tax dollars to, banks, large corporations, gas and oil company's. They get huge tax reductions, and now the gift of the HST to boot. Why does that smell of corruption? I went grocery shopping, what a nightmare. Certain sized bottles of drinks, one size has the HST, the other size doesn't. I got a carry basket, and threw all the HST stuff in the basket. I found an item, that was supposed to be exempt, but had the HST applied to it. Milk is exempt, however, soy milk isn't. The HST, looks like it was done up by a lunatic. People need to put the budget taxes and the HST, side by side. Where the budget doesn't get you, the HST does. There is HST applied to everything, from a fridge, to a nail file. The HST, has a very long arm. Citizens, must be careful, the budget taxes and the HST, could put some people out of their homes. Has anyone noticed, Campbell and Hansen are very careful, not to mention the, HST and the budget taxes in tandem. Another, sneaky, underhanded trick by, Campbell and Hansen.
I had no problems at the grocery store. Maybe you're just tax challenged in the brain 1:24.
The other 3 Million plus don't care.
Page 1
“Running deficits means overspending and people living beyond their means.”
“Wow, it only proves Stan can cut and paste. My 5 year old can do that.”
Firstly, to Anonymous, at the very least I am not afraid to post my name. And yes, cut and paste is a handy option to have to save hand typing. I am very pleased that your 5 year old is capable of working a computer since there is only 55 years between us. Of course, I suspect your 5 year old certainly must have better reading and comprehension skills since clearly you did not read the full texts and like most BC Liberals’ chose to cherry pick only what you want. The idea here is for civil discussions and not for drive by snipping comments.
I have neither children nor by extension grandchildren but I do indeed have a large number of nieces and nephews and certainly no one wants to leave future generations in an overburdening debt situation. However, upon review of provincial budgets over the last few years that is increasingly becoming the case as the overall debt load increases.
Maybe you missed September 2008 and the subsequent recession, I can assure you that most of us in the transportation field were fully aware of it and if anyone had bothered to ask for our input we could have, as an industry, given them a “heads up” about 12 to 18 months ahead of time. But as they say in my industry that is now water under bridge.
When you stated “people living beyond their means” I think a better statement would be “government spending beyond our means”. At the end of the day at issue is: what is or should be the role of government in the economy? I, like most business people, would like to see government marginalized and more involved with regulatory issues but I also realize that there are times in the economic cycle that government must step in to cushion the impact on its’ citizens during tough times, to even out the peaks and valleys. That is a primary function of government, involve itself when necessary and remove itself when things are going well. Ideally, taxation levels need to be higher during good economic times always expecting a downturn so there are no huge surprises or threats to revenue. That is basic Keynesian economics.
If you look at the current provincial budget and just look at solely the income tax revenue paid by Taxpayers and by Corporations what you will see is that for each dollar in income tax paid by taxpayers, corporations contribute directly 24 cents (based on the current budget). But if you look at the projected income tax revenue for the next fiscal year there is a major change whereby for each dollar paid by taxpayers, Corporations will contribute 14 cents. So clearly there has been a shift from corporations to individuals on tax load. This shift has not been debated or discussed during elections, even if you could find a Liberal MLA who would enter into a meaningful debate.
Now the difference in shifting taxation comes at a cost to individual taxpayers who unlike businesses cannot mitigate or offset this cost as effectively as a business. That point was clearly made in Warren Buffets’ letter to his shareholders and is as valid in Canada as it is in the United States.
In the case of the HST debate, this really is about the straw breaking the camels’ back. Voters/Taxpayers are recession weary and are saying enough is enough. It has become a flashpoint for a lot of unease that voters have been feeling for some time. It is a feeling that the powers that be, and that includes business groups, some economists (paid by taxpayers), government politicians and certain radio commentators/columnists, view voters and citizens as lower class citizens than themselves.
Page 1
“Running deficits means overspending and people living beyond their means.”
“Wow, it only proves Stan can cut and paste. My 5 year old can do that.”
Firstly, to Anonymous, at the very least I am not afraid to post my name. And yes, cut and paste is a handy option to have to save hand typing. I am very pleased that your 5 year old is capable of working a computer since there is only 55 years between us. Of course, I suspect your 5 year old certainly must have better reading and comprehension skills since clearly you did not read the full texts and like most BC Liberals’ chose to cherry pick only what you want. The idea here is for civil discussions and not for drive by snipping comments.
I have neither children nor by extension grandchildren but I do indeed have a large number of nieces and nephews and certainly no one wants to leave future generations in an overburdening debt situation. However, upon review of provincial budgets over the last few years that is increasingly becoming the case as the overall debt load increases.
Maybe you missed September 2008 and the subsequent recession, I can assure you that most of us in the transportation field were fully aware of it and if anyone had bothered to ask for our input we could have, as an industry, given them a “heads up” about 12 to 18 months ahead of time. But as they say in my industry that is now water under bridge.
When you stated “people living beyond their means” I think a better statement would be “government spending beyond our means”. At the end of the day at issue is: what is or should be the role of government in the economy? I, like most business people, would like to see government marginalized and more involved with regulatory issues but I also realize that there are times in the economic cycle that government must step in to cushion the impact on its’ citizens during tough times, to even out the peaks and valleys. That is a primary function of government, involve itself when necessary and remove itself when things are going well. Ideally, taxation levels need to be higher during good economic times always expecting a downturn so there are no huge surprises or threats to revenue. That is basic Keynesian economics.
If you look at the current provincial budget and just look at solely the income tax revenue paid by Taxpayers and by Corporations what you will see is that for each dollar in income tax paid by taxpayers, corporations contribute directly 24 cents (based on the current budget). But if you look at the projected income tax revenue for the next fiscal year there is a major change whereby for each dollar paid by taxpayers, Corporations will contribute 14 cents. So clearly there has been a shift from corporations to individuals on tax load. This shift has not been debated or discussed during elections, even if you could find a Liberal MLA who would enter into a meaningful debate.
Now the difference in shifting taxation comes at a cost to individual taxpayers who unlike businesses cannot mitigate or offset this cost as effectively as a business. That point was clearly made in Warren Buffets’ letter to his shareholders and is as valid in Canada as it is in the United States.
In the case of the HST debate, this really is about the straw breaking the camels’ back. Voters/Taxpayers are recession weary and are saying enough is enough. It has become a flashpoint for a lot of unease that voters have been feeling for some time. It is a feeling that the powers that be, and that includes business groups, some economists (paid by taxpayers), government politicians and certain radio commentators/columnists, view voters and citizens as lower class citizens than themselves.
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You know, we do live supposedly in a democracy and when you have 76% (Ipsos Reid) opposition to something along with a petition with over 700K signatures on it, you must listen, you must go back to the drawing board and find a better solution. This government has placed a cart in front of a horse going uphill and keeps piling on expecting the horse to do all the work.
Voters/Taxpayers in this province are not averse to paying taxes but it must have the appearance of being fair for all and changes must be at the right time of the economic cycle. You cannot always look at taxation through a single lens and that is what has partially gotten this government into the problems it is facing.
Today (3.Jul.10) Les Leyne gets most things wrong as usual - but then redeems himself with this gossipy little tidbit:
"Oak Bay Marine Group's Bob Wright, whose firm has donated several thousand dollars to the Liberals, met a few weeks ago with Liberal MLA Ida Chong, whom he has supported over the years.
In the bluntest terms, he broke with her and the government over the HST. He said he was not only not going to support Chong, he was going to actively help defeat her."
Think through cutting Business TAXES etc. ---- once we have cut Business Taxes etc. down to Zero to attract investment --- Do we start to Pay Businesses with TAX PAYER CASH to attract aforementioned investment etc. ie: Over the last year or so we have heard Bill Good & others talking about eliminating all business Taxes because all they do is pass the Taxes to the Consumer , Hence by cutting all business Taxes they will pass on the savings & Prices will drop --- do people really think it costs $1,000.oo to produce & ship a 40 inch HDTV from China to BC etc. ?
steve dockeray
milner bc
Canada
We certainly appreciate all your hard work Bill, in exposing our dictator Campbell, for what he really is. I have taken notice, neither Campbell and Hansen, ever say a peep about their insane budget, and the HST coupled together. Where are the logistics, to tax citizens, who have already lost everything they owned? We people are so used to having to live on nothing. I think a general strike, would get rid of, Campbell, Hansen and the BC Liberals faster. We can't leave him in office. Guess who Campbell is going to have, to drill his off shore oil and gas wells? None other than the boys, from the Gulf oil spill, BP. He is also fighting to have, China's dirty oil tankers, coming into the, Kimberly inlet. Can you imagine that spill, when it happens? We need to get rid of Campbell, as quickly as possible, before he destroys the entire province.
We certainly appreciate all your hard work Bill, in exposing our dictator Campbell, for what he really is. I have taken notice, neither Campbell and Hansen, ever say a peep about their insane budget, and the HST coupled together. Where are the logistics, to tax citizens, who have already lost everything they owned? We people are so used to having to live on nothing. I think a general strike, would get rid of, Campbell, Hansen and the BC Liberals faster. We can't leave him in office. Guess who Campbell is going to have, to drill his off shore oil and gas wells? None other than the boys, from the Gulf oil spill, BP. He is also fighting to have, China's dirty oil tankers, coming into the, Kimberly inlet. Can you imagine that spill, when it happens? We need to get rid of Campbell, as quickly as possible, before he destroys the entire province."
Disagree with Campbell, but "dictator"?? Was Mike Harcourt a dictator? Paul Martin? Ujjal Dosanjh?
and where is Kimberly Inlet?
What makes you figure that it would be BP drilling off the shores here? Why not Shell or Exxon??
So who would you replace Campbell with?
Campbell and the BC Liberals, are objects of ridicule and contempt. Their silly little juvenile games, are beyond belief. Ding dong Dejong, made a total ass of himself, of course, he also does the same thing in the Legislature. Hansen, is just as bad, he spends more time evading, honest questions, and plays the silly little boy. My God, what we have governing this province, is such a source of shame, we cringe at what their next exhibition will be. I don't know, what the disaster of the century will be? The Gulf spill, or Campbell and his band of idiots. Sorry, my contempt is showing.schetro
The worst problem is, we are not dealing with normal people. No decent, sane person would behave like Campbell, Hansen or the BC Liberals. Campbell is very Hitler like. He has to control absolutely everything, to keep the people from finding out, just how badly off financially, this province is. It is said we are billions, in the hole. Did he not, have the FOI papers blacked out, to conceal the Olympic debt? He is deranged, the same way Hitler was, when the war was being lost. His ministers, are just as fanatical as Hitlers gestapo were. They are willing to destroy their political careers, for someone who isn't worth, the powder to blow him to hell.
Great article Bill, and great comments Stan Mortensen. Thanks.
"The worst problem is, we are not dealing with normal people. No decent, sane person would behave like Campbell, Hansen or the BC Liberals. Campbell is very Hitler like."
Oh? how is that? Are there brownshirts on the streets looking for people of a certain faith to kill? Checkpoints every 2 km to check your credentials??
" He has to control absolutely everything, to keep the people from finding out, just how badly off financially, this province is."
In case you haven't seen it, B.C. has been better off than most places in North America.
" It is said we are billions, in the hole. Did he not, have the FOI papers blacked out, to conceal the Olympic debt?"
The final numbers on the Olympic financial picture have not been released by VANOC yet.
He is deranged, the same way Hitler was, when the war was being lost.
I think you're the one who is deranged. Turn back to let's say Trudeau and his War Measures Act, the National Energy Program, or
the Conservatives GST, and the $800 million in additional taxes the NDP set upon the provice in the 1990's.
Campbell has made some very stupid moves, including this HST, but comparing him to Hitler is way over the top.
If the NDP imposed additional taxes on consumers, would you state the same thing about Carole James??
His ministers, are just as fanatical as Hitlers gestapo were. They are willing to destroy their political careers, for someone who isn't worth, the powder to blow him to hell.
Calm down and enjoy the summer. The degree of silliness of comments such as this one is dragging down Bill's blog.
Folks - while I always appreciate a wide open vigorous debate, I urge a modicum of moderation here.
The Hitler references, the personal insults - it doesn't impress anyone reading it and lowers the argument considerably.
I haven't censored or blocked any comments yet and don't intend to but I would urge taking the higher road.
Bill,
Another odd application of the HST (to go along with the horse feed I heard about today when you were on SL's show); hay.
Yes, hay is taxed if you buy less than 16 bales at a time. We can only get 12 bales in our pick up truck; hence we usually buy 12. Taxable.
Feed to animals that are considered non taxable for sale (goats). Go figure. Someone at Revenue Canada (who decide what gets taxed) know nothing about farm animals.
Another ruling is that pheasants are non taxable for sales, peacocks are not. Peacocks ARE pheasants.
What can I say?
I'm still annoyed I got taxed on my 7 layer dip today at the cave on.
Now the hay thing.
Because my farm doesn't produce 30K or more dollars a year, I get to pay the HST on farm goods that are taxable and won't get it back.
That's it. We're done. Turn us over with a fork.
We cannot afford to carry on farming and pay the HST to do it.
It's just not worth it. I don't wanna go broke so Canfor can send raw logs to China.
Another small business bites the dust.
5:02, you need a new tax accountant and you deserve to go broke. You got it all wrong regarding $30K limit and can't register for HST.
anonymous 7:55,
I venture that people who work hard on farms to feed themselves and others do not deserve to go broke. I further venture that anyone earning less than $30,000 a year would have a difficult time affording an accountant.
Perhaps you could help point anon 5:02 in a helpful direction if you know where and how he or she could get some useful tax advice. Telling someone that he or she "deserves to go broke" is unkind and unhelpful to his or her personal well-being and to our overall economy. After all, we do want our neighbours to be prosperous, do we not?
SIG
For the chap with the hay farm, oddly enough the NeoCon/BC Liberal (is there a difference??) fellow with the little cajones is partially right unfortunately not bright enough as subsequent poster, Sig, pointed out to give you an assist rather than a meaningless and ignorant comment.
In any case, you might want to consider registering the farm as a business entity and registering for the HST number. When you do that please ensure that you register for an import/export designation as well. My late dad had a hay farm on Barnston Island some time ago and should have registered the farm as a business; it would have saved him a lot of grief and aggravation with Rev.Can. in subsequent years. He did finally acknowledge that just prior to his passing, but those darned stubborn Scands.
As well you can likely contact an accountant with a CGA Certification who can best advise you, possibly for a minimal fee on the best way to set up your books.
Once you are registered with a HST number, at the income level you are indicating it is likely you would be able to submit your HST filing once a year. Just for your guidance and information, the CGA may suggest that you obtain a Quicken business program which can link in with their tax program. FYI, the online filing of the HST is a breeze so long as you are registered, you just need to make sure you have all of the information and that it accurately reflects your true sales and your true receipted purchases.
You may think you do not need an import/export account number but based on my dad’s experience quite often the parts he needed he had to secure from south of the border for a more reasonable cost than here in Canada, especially for some of the older farm pieces.
Anyway, everyone’s situation is different so you should seek the best possible advice that you can afford.
Good luck with that and hope this information helps you.
Great article Bill, and thank you for all the hard work you put in during the "NOHST Initiative".
I just can't wait for the wave of misinformation that will come forth from the government. The crap they have been dishing out so far is nothing.
Harvey Oberfeldt has a great piece on his website, "Keeping It Real", that everyone should read. He offers no political bias and pulls no punches. It will be interesting to see how the BC Liberal shills attempt to spin his take on the HST etc.
Once again Bill, your blow by blow dissertation of Gordon Campbell's editorial piece was humorous, brilliant and most of all enlightening.
"Recall in the fall".
CGA's are glorified bookkeepers. As useless as tits on a nun.
New information from my accountant.
Business which sell only exempt goods and services may not register to collect GST, and thus may not claim any input tax credits for GST that they have paid.
I produce goods that are HST exempt. I cant register to collect the tax. So I can't get input credits.
If I sold taxable items, then I could register voluntarily. But I don't.
BTW If you're a farmer, such as myself, whose farm income is less than that which I make at my job (which supports my farming), my business is considered a hobby farm by Rev Cda and I can't deduct expenses for farming. A lot of family farms have operators working outside the farm to support it. Large and small farms. They're considered hobby farms therefore no deductions for expenses. So you see the root of the problem. The HST on certain types of supplies tips the balance.
I pay for all my supplies myself. I don't get tax breaks for it. And I pay income tax on any income from farming.
It is no longer worth it, financially, to contribute by providing a local product.
Appreciate the suggestions (the helpful ones, anyways), but as I said, I give up.
Hi to the hayfarmer;
Yup you are right, forgot about that part of the legislation. Glad your accountant was able to give the correct info.
I see small cajones did another drive by, I can see the headlines now:
BC Liberal supporter disses CGAs'
Oh well, consider the source.
"Folks - while I always appreciate a wide open vigorous debate, I urge a modicum of moderation here.
The Hitler references, the personal insults - it doesn't impress anyone reading it and lowers the argument considerably."
I know what you mean Bill, but it is very difficult for people to maintain the debate at a high level when what we are discussing is such DESPICABLE behaviour! Even Jesus or Ghandi might lose it confronted by the Campbelloids and their rip-offs of the people and destruction of what used to be a pretty good place on this earth/
Only a arrogant A-hole like the Gord would claim our place to be the very best when supposedly trying to host the world!
"Welcome world, by the way, where ever you come from SUCKS!" Gordon Campbell paraphrased
Yep, anonymous farmer, I have a friend who has exactly the same kind of thing going down with him.
Both he and his wife have a ranch that they has been having to build up and purchase by working at full-time job off the ranch. Before the Federal Conservatives and the BC Liberals got in power, they were able to write-off a good deal of their ranch expenses that were over and above living expenses. Anyhow, he can hardly afford the expenses to maintain the small herd that he now has, let alone the expenses of building up a herd: more hay and hay storage, more fence, more farm equipment, vet bills - more everything. He's a bright, energetic and capable man who works more hours every day than there are hours of daylight. The BC Liberals have done him and others like him a huge disservice.
Anyone who knows anything about the ranching/farming business knows that one doesn't get rich doig the job of running this sort of business. All that one can hope for is enough good years to keep moving ahead until everything is paid off. Then, one either has something to pass down to one's kids or he can sell - finally, aftert 30 years or so for a bit of profit for retirement. The BC Liberals don't care about small businesses; they only care about putting the little guys out of business so the big business folks can own and run everything.
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