The Dawn of a New Tax Era…
June 9, 2010 4 Comments
… Things turn out best for the people who make the best of the way things turn out … ~John Wooden
So… the BC and Ontario gubberments are trying to convince its citizens that the Harmonized Sales Tax, known as ‘HST‘ is a VERY good thing for us, because economists and businesses say so. They call it a ‘tax reform‘ and labeled it as a ‘value-added sales tax.’ Ultimately, taking our 7 or 8% Provincial Sales Tax (“PST”) that is currently being charged on selected items (not all), adding it under one pretty umbrella on ALL items to the existing 5% Goods & Services Tax (“GST”) – and voilà: we are now paying 13% on items that, well are essential to survive on, impacting quality of life – and in some areas – making it even more difficult for lower income families to FURTHER make ends meet. Because apparently, our existing over-taxed structure is hurting job creation… because businesses are being taxed up the wahzoo, increasing prices end-users pay. In essense: this is how its explained here:
Right now, most businesses pay PST on various costs throughout the supply chain, which form part of the cost of doing business. In other words, though you may not realize it, the PST is charged multiple times on various business costs before a product reaches the store. That added cost of the PST is then passed on to consumers in the form of higher prices.
While consumers believe they are only paying 8% PST on the final purchase price, in fact that final price includes layers and layers of hidden taxes. The HST would eliminate this hidden tax, because most of those embedded costs are refunded to businesses through what are called “input tax credits.” These savings can be passed on to consumers through lower prices.
Most of the products we buy every day will see no new tax. There are a lot of products and services on which we already pay the PST and GST. For these products, like cable and phone services, new cars and adult clothing, there won’t be a change. On July 1, 2010, instead of paying 13 per cent tax to two different governments (8 per cent provincial and 5 per cent federal), there will be one tax — still 13 per cent, collected by the federal government.
Currently, PST (also called RST) is applied at every step in the creation of a product. Those multiple PST charges are embedded in the price you pay at the store – even though you can’t see it. And of course, you pay PST on the final purchase price.
In total, about 83 per cent of products and services purchased by consumers will see no new tax. Only 17 per cent will see a new tax, things like personal and professional services such as hairstyling and legal fees, as well as energy costs including home heating fuel and electricity.
Other products will be eligible for a point-of-sale rebate for the provincial part of the HST. This means you will only pay the 5 per cent federal portion of the HST. These include print newspapers, books (including audio books), diapers, children’s clothing and footwear, children’s car seats and booster seats, feminine hygiene products, and qualifying prepared food and beverages sold for $4.00 or less.
So here’s my question that I simply just don’t get: if we, the end-user/buyer, are currently paying HIGER prices because the manufacturers are paying taxes on top of taxes on top of taxes – and this HST is supposed to eliminate that: why is it that the prices on 83% of said products will not change – will not be lowered? Why will we still be paying the HIGER prices then if all those in between taxes are no longer there? Manufacturers and retailers are not decreasing their prices/costs – no, they are instead, going to INCREASE them…pass that on the us, the end-user. Lovely.
In fact, luxury items such as alcohol – will INCREASE their prices?? How is the HST going to help homebuyers when instead of only paying 7% on the sale of a house, are now expected to pay 13% taxes on top of builders increasing their sale prices by an average of 6%? For a new home – we are NOW looking at approx 7-11% increase, depending on the province you live in!! Same goes with cars and fuel and electricity… and the list goes on and on and on…
And while under the current taxing system, apparently greatly flawed tax system, items that promoted a greener -way-of-life were tax exempt, are now, no longer exempt. Going ‘Green’ is already unaffordable as it is! You are now telling me ‘save the planet‘ but I can’t afford to – you’ve officially made it far to expensive to do so!
The tourism industry will be greatly impacted as recreational fees will rise.
How this is ‘value-added‘ tax going to benefit the tax-payers, struggling families, industries is beyond me. Implementing HST is hiking up the sales of items that are already suffering because of the state of the economic world – which will in turn, mean less people will be able to afford them. Thus… further declining the requirement for them… further impacting the job creation that this ‘value-added’ sales tax will supposedly going to provide.
Not so bright, you dickwads!
They say this will help protect our ‘social services’ provided to all Canadians.
My ass it will!
It will simply create a further need for more or additional social services that the governments are already struggling to provide.
And while I didn’t vote for this government at the last election and they can do whatever the fuck they want, however they want it because apparently we ’empowered them to fuck us all up the ass with lies’ – one must look at the bright said of things. If you shop in Washington.
British Columbia, Ontario Residents to Become Eligible for Non-resident Sales Tax Exemption
OLYMPIA – June 8, 2010 – Beginning July 1, residents of British Columbia and Ontario become eligible for a non-resident sales tax exemption on purchases of goods in Washington for use outside the state.
State law allows a sales tax exemption to residents of jurisdictions that impose a sales tax of three percent or less. Washington sellers are not required to make tax-exempt sales to qualifying nonresidents, but most do. The exemption applies only to tangible personal property and does not apply to lodging, meals, or other retail services that are provided in the state.
In order to receive the exemption, qualifying residents must show proof of residency, such as a driver’s license, to the Washington seller. The seller must retain the information to support the exemption in the event of a tax audit.
Residents of British Columbia and Ontario previously did not qualify for the exemption but both provinces are adopting a harmonized sales tax (HST) in tandem with the Canadian federal government beginning July 1. The HST technically is a value-added tax (VAT) and not a sales tax.
Residents of other Canadian provinces that impose the harmonized VAT have been eligible for the exemption for years.
Six states, including Alaska, Colorado, Oregon, Montana, Delaware and New Hampshire, eight Canadian provinces, and four U.S. possessions already qualify for this exemption.
The exemption statute, RCW 82.08.0273, was enacted in 1965.