Re: Higher taxes bring little, July 5 letters.
I have read letter-writer Bryan Peterson’s comments with interest and must say I agree with him on a couple of points, mainly that he is neither an economist nor a financial guru.
Frankly, he doesn’t stack up too well in the math department, either.
Bryan blithely ignores the fact revenue neutral arose as the implementation of the HST was accompanied by a commensurate decrease in the rate of provincial income tax, plus a rebate for the most needy in our society.
It seems quite simple math to add the return of $1.6 billion to the feds and a reduction of $1.4 under the old PST to come up with a cost of $3 billion to go back to the old system, let alone the administrative cost in terms of additional bureaucracy. What is there to understand?
Of course the federal government will let any province set their share of the HST at any rate they desire, as they have no financial interest. I think it is important, however, for us to be assured that the rate can and will be reduced to 10 per cent over the next couple of years, and that is the purpose of getting the feds’ agreement in advance.
To suggest there is some nefarious collusion between the two levels of government is ingenuous at best and closer to a straight misstatement of the truth. Both governments recognize the benefits of a harmonized sales tax, as do most of the democracies in the free world. It is both efficient and fair.
Admittedly, the HST will not reduce until July 2012, as we are committed under our agreement with the feds for two years. However, we are not free to go back to the two-tier system until the same time frame, so this is a red herring.
Bryan, did you expect to see more money for health care and education along with lower unemployment the day after the HST was implemented? The benefits of the HST will take some time to work its way through the economy before we reap its full benefits.
Robert Cooper, Surrey
Getting to ‘no,’ June 24 letters.
As one who has spent many years successfully studying theoretical physics, I feel entitled to claim I am more than familiar with mathematics.
As a result, I must flunk two of your “students,” who recently wrote letters promoting the HST.
Letter-writer Elmer Sather failed to recognize the HST is a combined tax, which adds a new tax – let’s call it the “GST extension” – to the pre-existing GST, replacing, where applicable, the PST, to make a new, integrated tax – the HST.
In all comparisons, the old GST is always present – now at five per cent – so the only percentages that matter are the old PST and the new, GST extension, both at seven per cent. The promised reduction from seven to five per cent for the GST extension will not come into play, perhaps, until July 1, 2014.
This is where your other “student”, Randy Elliston, fails in his simple math.
The referendum issue is not whether the HST tax after July 1, 2014 is a smaller percentage than that in force on July 1, 2010 when the current HST was introduced – this is obvious, a Grade 1 student knows five is smaller than seven.
The question is whether the sum of the taxes on all one’s typical purchases over 12 months is smaller with the PST – that is, prior to July 1, 2010 – than the sum of all the taxes calculated on all the goods and services at the extended GST rate after that date.
Since the full range of services taxed by the GST – and therefore HST – is vastly larger than the few goods taxed under the PST, then the annual tax grab is much larger with the HST, as was always the intent of the government in introducing the HST.
Questions of transparency and efficiency, raised by Elliston, are simply red herrings. i.e. part of the smokescreen to confuse the ‘naïve and stupid’ in this referendum.
Mr. Sather and Mr. Elliston, I am afraid you have flunked your math class on the HST and I must recommend that you both repeat your Grade 8 course on elementary percentages. Everyone else is encouraged to complete their homework so that they will be able to vote ‘yes’ on the mail-in ballot.
Dr. Herbert Spencer, Surrey
Tax truth is in the numbers, June 30 letters.
I am now very concerned about the knowledge level of the ‘yes’ side. The PST rate was and would return to seven per cent not six per cent.
As far as letter-writer Joan Rivett’s generous offer of allowing for PST on $30,000 out of $50,000, it is not very generous thanks. The accepted percentage of items that were PST exempt and will not be HST exempt is 20 per cent. That means if we compare spending $50,000 before and after HST, approximately $10,000 would have been PST-exempt, not $20,000 as you stated.
I also feel, after reviewing the list of exempt items, that even 20 per cent is high as many of the items are not common – smoke alarms, life-jackets, fire extinguishers; $10,000 on such items seems high.
So let’s do your math again: $40,000 x 7% PST=$2,800; $50,000 x 5% GST=$2,500; $2,800 + $2,500=$5,300. Oops, you lose again. $50,000 x 10% HST= $5,000.
To be fair, you pointed out the HST does not drop right away. That is why seniors, parents and low-income earners will receive rebate cheques.
Your insinuation that the reduction may not happen – I imagine due to lying politicians – is moot because I could argue that the PST might be raised or added to exempt items.
As for seeing savings already, get real. We are talking about a major undertaking involving billions of dollars, millions of consumers and thousands of businesses.
Economics is an intimidating subject, but that doesn’t mean it’s wrong. The benefits will come.
Now, please, for all our sakes, try to educate yourselves, people, and stop listening to Fight HST organizer Bill Vander Zalm’s crazy talk – he was a politician, after all – and vote ‘no’ to going backwards to the ridiculous PST/GST.
Randy Elliston, Surrey
Getting to ‘no,’ June 24 letters.
Letter-writer Randy Elliston, it seems like you should be giving your head a good shake or two.
You seem to be missing a few facts or are misunderstanding what you have heard.
The two percent decrease won’t happen for another two years in which case the 12 per cent will stick until then, and we will be still paying 12 per cent on everything till 2013. By then, two per cent will mean diddly-squat, when the cost of living will increase by probably twice that and you would be actually paying more for things than now and taxed accordingly.
The GST you keep speaking about is not the real issue; it’s the PST that has been implemented on things we never paid on before that we would see a reprieve on in the long run. We paid GST on most everything before but not PST, so it would go back to five per cent on those things, instead of staying at 12 per cent for another two years then, supposedly, 10 per cent after that.
We will still be paying more on all these things, no matter how you look at it.
Consider a family’s spending – that is very significant coinage. I no longer have my family living with me, but I definitely can feel the gouging that’s been happening and know what that extra seven per cent that’s been added to things that were exempt before means.
Why do you think Ottawa gave B.C. the billions of dollars to implement this HST? It’s because they know it will greatly benefit them, not us, in the long run, and that’s why B.C. Finance Minister Kevin Falcon is fighting to keep it; because he doesn’t want to give the money back, not because it’s so great for the economy.
We were doing just fine before all this. It’s the government that can’t get its poop together and thinks it can keep sucking us dry till we have no more energy to fight back.
It is imperative to understand the whole, true facts before you vote ‘no,’ because there will be no going back then.
Vote ‘yes’ and let us decide what to do, not be dictated to.
Patricia Seggie, Surrey