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Jordan Bateman

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Adding PST To School Supplies Part Of $159-Million Tax Grab

Posted: 11/22/2012 2:04 pm

When British Columbians rejected the Harmonized Sales Tax in the 2011 referendum, they were promised things would go back to the Provincial Sales Tax normal. But an independent panel has recommended adding taxes to things that virtually every B.C. family buys -- a plan that will increase our already sky-high cost of living.

The report from the Expert Panel on B.C.'s Business Tax Competitiveness includes recommendations for adding the seven per cent PST to basic telephone and cable TV service, snack foods and school supplies -- items that all used to be exempt. It's a $159 million tax grab -- even if the government follows another panel recommendation to give $25 million more in sales tax credits to lower income families.

Ask a parent about the cost of school supplies, and you will likely hear it's a major struggle every September to get items on the ever-growing supply list. It's not just pencils and notebooks anymore; schools ask parents to purchase emergency supplies like foil blankets, light sticks, tissue, water and food. Adding another seven per cent of tax to those purchases will make things even worse.

The panel claims it's unfair to satellite TV users to tax them but not tax cable; they also say telecommunication bundling makes it difficult to collect the tax. No arguments here, but instead of recommending a tax cut for satellite subscribers, they want to spread the misery to all.

school supplies

They're also after your Smarties. While some suggest that taxing snack food will curb obesity, neither research nor practice has bore that out. Even leading B.C. doctors agree that taxing snack food will do little, and that it is incredibly difficult to implement.

"Research actually shows little correlation between individual behaviours and body weight: many who seldom consume such foods are overweight while many who do, are not," said Dr. Paul Martiquet, an adjunct professor at the UBC School of Medicine and the Medical Health Officer for Powell River, Sunshine Coast, Sea to Sky, Bella Bella and Bella Coola.

Added Dr. Lloyd Oppel, head of the B.C. Medical Association: "I think it would be difficult to draw up a list of things that were truly bad versus things that are truly good and be able to implement a tax on that basis."

Denmark tried a food tax but killed it after one year, noting it increased prices and administration costs and put Danish jobs at risk. Many Danes were crossing the border into Germany to avoid the tax all together.

Even the Ministry of Finance officials assigned to crunch the numbers for the tax panel knew this was simply a tax grab. In a note unearthed by a Freedom of Information Act request, bureaucrats called the snack food tax "purely a revenue measure" and remarked that it would be very complex to implement.

Whether HST supporters like it or not, the public spoke and the PST is coming back. It's not a great tax, but it's the one democracy wants. Altering exemptions now will be ignoring the referendum results and raise the anger of already overtaxed B.C. residents.

Adding PST to previously non-taxable items is a tax grab, plain and simple, and will increase tax burden and cost of living, two things British Columbians are already groaning under. If this burden is as important to the government as they claim, Finance Minister Michael de Jong must flat out reject those proposals.

 

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When British Columbians rejected the Harmonized Sales Tax in the 2011 referendum, they were promised things would go back to the Provincial Sales Tax normal. But an independent panel has recommended a...
When British Columbians rejected the Harmonized Sales Tax in the 2011 referendum, they were promised things would go back to the Provincial Sales Tax normal. But an independent panel has recommended a...
 
 
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AcunningDisguise
magnus gigas caput
07:44 PM on 11/24/2012
This is what people said would happen they simply took all the bad off the HST and moved it to the old system.

What we voted for Liberals was a return to the old system ...tax exemptions intact!
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Rich Velay
Reality is progressive
05:39 PM on 11/23/2012
Did anyone actually believe that ditching the HST for separate PST and GST would lead to lower taxes? Did anyone actually believe that having to pay back the funds we received for implementing the HST would lead to a better fiscal situation for BC?

Not only has our debt load been increased by 1.6 billion we have to pay back to the Federal govt, not only have we lost the estimated 30 million in savings with regards to collecting sales taxes, but we now have to increase taxes to make up for the lost revenues due to rejection of the HST. Just where did people think the BC govt was going to find that 1.6 billion, if not from increased taxes?

Why a majority of BCers would vote, in effect, to increase taxes while simultaneously accepting a loss of 1.6 billion in Federal funds is a question I don't expect to be able to answer. Some people just enjoy being masochistic, I guess.
03:59 PM on 11/24/2012
Absolutely. We sit here all fat and happy thinking that the Provincial government is composed of our friends and that our friends in government will keep their word. How naive. The vote to repeal the HST was intended, in the imaginations of some, as "punishment" for the Liberals and for the naughty thing Gordon Campbell did in bringing in the HST when he said he wouldn't. So we loaded our collective guns, pointed them at our collective feet, and pulled the trigger. Ow! We created this mess, and we are collectively 9again) ignoring it, assuming the PST will be exactly the same as it was. Nope. Not gonna happen. Surprise, surprise. We are on the hook for $1.6 Billion plus, and the government will not stoop so low as to cutting waste in any form to save our money (it isn't theirs, after all, why would they care?), so they'll come a-collectin', as usual.
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Rich Velay
Reality is progressive
01:20 AM on 11/25/2012
Can't say I disagree!  ;)  Besides which, casting a vote in the referendum, to "punish" Gordo was kind of messed up, since he had retired by the time the referendum was even held!
I wasn't sent a referendum question about "how" the HST was implemented, nor was I sent one about whether or not it *should* have been implemented.
I was asked, in essence, "Do you agree that you should kick yourself in the nuts and accept higher taxes, to protest against, errm, higher taxes?"  It was *very* easy to vote No to that...
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cowman
Politics and Comedy
03:07 PM on 11/23/2012
Changing the PST prior to bringing it back violates the referrendum and the law. This is exactly the kind of dirty last-minute bait-and-switch the BC Liberals have become experts at. Removing the HST but replacing it with something that functions exactly like the HST is wrong no matter how you slice it. The BC Liberals have recently recovered to 29% support thanks largely to the collapse of the BC Conservatives, now at 12%, but those numbers will take a nose dive if they try this. Mess with the return of PST and you might as well not run a candidate in the May election.
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Rich Velay
Reality is progressive
05:56 PM on 11/23/2012
This was the referendum question:

Are you in favour of extinguishing the HST (Harmonized Sales Tax) and reinstating the PST (Provincial Sales Tax) in conjunction with the GST (Goods and Services Tax)?

I see nothing about tax RATES in this question, nor do I see anything concerning how the PST would or would not be handled, regardless of the results of the referendum.

The question was simple, scrap the HST and have separate PST and GST, or not. The negative consequences associated with scrapping the HST were obvious and accessible to anyone interested in looking for them.

Suggesting that the government of BC owes something to BCers, due to the referendum, other than scrapping the HST [the question asked] is disingenuous in the extreme. People who voted to get rid of the HST got what they asked for; now they and everyone else in BC has to live with the consequences. Thanks for nothing...
04:59 AM on 11/24/2012
The Liberal administration did in fact commit that the PST would revert back "intact" to its' prior situation. Any attempt by this administration to play loose with the Referendum would be absolute political suicide. I suspect the Liberal caucus will be advising the premier and the minister of finance on just how bad the results will be, if in fact, the executive council goes forward with what Jordan Bateman is suggesting.
As a small business dealing with consulting, while I appreciate how beneficial the HST can be for large businesses especially in the area of Manufacturing, it has not had a net positive effect for our business. In actuality, from our particular perspective returning to the PST will increase our overall net revenue which we will be able to re-invest back into our company. Combined with that having the PST as a business expense will give us the double benefit of reducing our overall federal/provincial business taxes.
For our situation a return is good, for others the situation will be different.
Our biggest complaints about the HST revolved around the way it came about and worst of all the timing. In any economic cycle, the worst time to tinker with increasing taxes is when an economy is stuggling, you cannot take that much money out of the consumers pockets at a time when you need them to be spending. To my view the implementation of the HST has likely been a major drag on economic recovery in BC.
05:00 AM on 11/24/2012
As regards to the repayment of the 1.6 Billion "incentive" BC received from the Ottawa, I have yet to be convinced that any serious negotiations took place. My sense tells me that Minister of Finance at the time likely dragged his feet and did very little, if any negotiating other than perhaps a brief phone call. A case could have been made that the Feds benefitted by substantially increased Business Taxes which I believe to be in the range of $300 million annually which should be sufficient enough to offset the "incentive" offered.
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BCPATRIOT
British Columbia
02:45 PM on 11/23/2012
Christy Clark wants to go down in history a BC's worst ever premier.

Can't wait till May 14th, 2013 to give her and her followers the BOOT out of office.
06:36 PM on 11/23/2012
I am terrified they will repeal the fixed election date law and we will have to wait until May 2014. The libs have nothing to lose by doing that...
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AcunningDisguise
magnus gigas caput
07:46 PM on 11/24/2012
She's already achieved that with her importation of foreign workers. Being that she is just an extension of Campbell.

They go into history joined at the hip.
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BCPATRIOT
British Columbia
09:24 AM on 11/25/2012
I wish the election was tomorrow, she's putting our province more in debt everyday.