With a little education, the HST could become very popular very quickly.
The Star Phoenix roughly explains why. In short, no one likes paying taxes. No one likes paying higher taxes. And no one likes paying taxes on things that weren’t being taxed yesterday. Hence the poison in the supposed pill fueling recent election talk. But it’s only an unpopular move because unless you’re an economist, or paying really close attention to what all kinds of actual economists are saying, you haven’t the slightest idea how it’s supposed to benefit you.
With only a very minimalistic amount of actual research, there’s a fair laundry list of taxes, administrative costs, etc the HST proposes to eliminate. This is exactly the same HST, complete with proposed 13% harmonization, that New Brunswick adopted in 1997–yes, under a liberal majority government.
A study (PDF) was done in 2000, which outlined that prices in the atlantic provinces did fall with the advent of the HST, due to a combination of lowered tax rates (eastern provinces were seeing taxes upwards of 11% or higher) and lower overall costs in administration. Fortunately, items that are already being taxed provincially in Ontario–at an already existing rate of 8%–won’t see any real price increase when the HST comes into effect for items already not exempt from the PST–they’ll be in line now with the tax situation in atlantic Canada. People in BC, however, might actually fair out a little better. Their provincial tax sits at 7% right now, and will probably still be that way when they harmonize. The Globe and Mail has a sort of hst FAQ posted that explains roughly where it is consumers should expect to see prices fall, and where they should expect to see them increase. The article also points out we won’t actually know how the specifics will play out until it actually happens. Or, until the parties in support of the HST come out with something you don’t have to be an economist to translate.
And that’s the crux of the problem right there. Conservatives and liberals alike are telling Canadians the HST is a good thing, without really explaining why. I mean, beyond the standard responses that businesses will pay less to produce what we need, and consumers therefore should pay less to purchase/use what we need. But it never is that simple. Without details, and without knowing exactly what it is we’re supposed to be absolutely overjoyed to see come into effect in 2010, we’re left guessing. And the guesses a lot of folks are coming out with are that everything up to and including the kitchen sink will probably end up costing more–a theory not hindered by Jack Layton’s general opposition to anything that won’t buy him votes.
Not everyone has the time to actually go and look at how it’s been implemented in every other province who’s doing the harmonization. For that matter, not everyone really cares–they don’t live there. All that matters is how HST legislation everyone knows is coming down the pipe sooner or later will effect them. And right now, beyond Layton’s crying about it and the rough estimations of economists not involved in the actual legislation, that’s precisely what Canadians are not getting. If the net result is going to be lower taxes/prices all round, then say so. If HST provinces will simply be paying more taxes at the cash register and less off their paycheck, again, say so. Stephen harper and Michael Ignatieff’s parties would both support this tax. Stephen Harper is behind the push for the tax to come into effect. An expectation that he, or someone in his government, would be able to provide some degree of an explanation of exactly how such a change would be carried out is not, you’d think, an unreasonable one. So let’s have a crack at that. It might help the move’s popularity some. And really, it could use some help.
