B.C.'s HST: The Funny Thing About Rage

Peter Severinson

| August 31, 2009

With B.C.'s controversial HST, are the wins worth the losses?

The HST seems to have given British Columbians a big injection of angry. But you know, I've got to say I'm altogether unmoved. Maybe it's the end-of-summer lethargy at work here, but my reaction to the new taxation system is a resounding "OK."

Don't get me wrong. This is a serious public policy issue and deserves attention. But I take it as a given that the tax system, like any other complex and important social mechanism, evolves; it undergoes adjustment, change. And any time you change something this important, there will be winners and losers. So the question we face with things such as HST is, Are the wins worth the losses? And my judgement so far? Well, sort of.

I picked up the following critique from the Progressive Economic Forum, a blog more likely than most to pillory the B.C. Liberals. Economist Marc Lee writes, "In principle a harmonized tax is indeed a good idea. It streamlines the administration of the tax, and moving to a value-added tax is more efficient than a straight sales tax." He then poses the following: "Will the HST create jobs, long-term growth, make us more competitive, enhance productivity and increase investment? I doubt it. There may be some benefits from the new approach but they will be very small in magnitude."

You see? Meh.

But it's funny how everyone gets mad at whatever's the latest thing, although I guess that's understandable. As mentioned, there are always losers in any change, and I suppose they have a right to be indignant. For myself, however, when the HST is stacked against other truths about our province, it pales.

From 1999 to 2006, B.C. has had the highest percentage of people living in the low-income bracket of all the provinces. Every year. In this timeframe the GDP grew about 50 per cent, from $121 billion to $180 billion. In that time, the unemployment rate went from more than seven per cent to less than five. After all that, we're still dead last in Canada when it comes to poverty. And the Liberals stick fanatically to their stance that more jobs will fix everything, refusing to adopt a broad-reaching anti-poverty strategy (as called for by these people).

See, that makes me angry. In fact, it's worse than that, it makes me ashamed of my province. But the issue of poverty is not particularly new, is it? We've lived with it for years. And rather than that making it a more important issue in the eyes of the public, it seems to makes it less so. This, obviously, doesn't make sense. But I guess angry people often don't.

Tags
- peter severinson,
- john bucher,
- HST,
- BC government,
- City and Government,
- Taxation

Hey thanks for the comment.

Submitted by pseverinson (not verified) on Fri, 2009-09-04 08:57.

Hey thanks for the comment. I absolutely agree that the handling of this new tax is the most worrying thing about it. Not exactly the best example of open, transparent democracy. People should really be told what they're voting for. But we need to be careful about calling the HST a tax increase. This isn't just a tax hike; it's a bit more complicated than that. It's true that some things on the consumer side will be more expensive because of the shift, but many business costs that are now taxed by the PST will not be taxed under the HST. So it's unclear whether the government will actually get more revenue from the new system than what they were getting before, at least from what I've read so far. Still, many are really upset about the changes. According to some, this is classic Liberal behaviour: screwing the regular guy while giving the corporations a break. Of course, the traditional conservative counter-argument here is that business that save money will be able to lower their prices to consumers. You'll have to forgive me if I don't hold my breath for that one. Peter.

I'm not so much pissed off

Submitted by Anonymous on Mon, 2009-08-31 14:08.

I'm not so much pissed off at the tax, I'm more irritated at how the entire thing has been handled. If it's really no big deal, why did the Liberals lie about it before the election, and why do they keep shovelling steaming piles of spin on it trying to convince us that an increase in taxes is going to solve all of the world's problems. I would probably have very little to complain about if they just came out and said "listen, we screwed up on the budget. We need the $1.6 billion from the feds, and the increased revenue from this tax. We know that consumers will get a little more screwed over, but let's work together to come up with a way to mitigate that."

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