The BC government is right to move towards a harmonized sales tax. Business groups and economists have been calling for this for years and it is a smart tax policy in this economic climate. HST will save businesses over $150 million and will save the province $30 million in administration costs from not having to deal with two different taxes from two different governments. Businesses will also stand to save nearly $2 billion on new investments and inputs. Canada and BC already lag other jurisdictions in research and development and investment spending and these savings will help spur greater business investment, greater competitiveness and a stronger BC economy. The new HST will be applied to nealy everything, doing away with the long list of goods that are currently exempt form the PST. This is where the NDP is making political hay and the public seems upset. But the PST exemptions are largely ridiculous. Tax should be applied across the board fairly to everything. Why do I pay tax on a wool scarf, but you don't pay tax on the wool to make it? Why should I pay no tax on news magazine while you pay tax on fashion magazines? Why is children's clothing tex exempt but not seniors' clothing? Why are pencils tax-free for college students but not tax free for my personal use on the Sunday crossword?These exemptions are largely unnessesary and are often taken advantage of. Having worked for a time in a clothing store, I can attest to the abuse of the tax free clothing for kids--many, many adults simply buy themselves items and them claim they are for some child to get the tax break. There's no need for such a hit-and-run, spotty tax policy. However, the government is providing some limited exemptions, which the critics often fail to mention; feminine hygeine products WILL be exempt, diapers WILL be exempt, as will basic groceries, kid's clothing, fuel, books and carseats. Plus, refundable tax credits (free cash) will be given quarterly to low-income individuals to help offset the new taxes.
There is no reason for all this HST hubbub. It is the same amount of tax, 12%, as now, just paid in one lump instead of split into two. The exemptions will change, but not as much as the critics claim, and not as much as I would argue they should. And those who will be impacted the most, will be given money to help them out. While I will admit that this debate should have been held during the recent election, where it was notably absent, the HST policy is smart, it is fair and it is being needlessly attacked.
