598 replies to this topic

[Bob Fugger]

Sorry, but I don't think that you're right. 5+7=12 is far, far to simplistic an explanation. Sure, the tax rate is higher, but the price of the item you are taxing is lower.

For (real life) example: you want to buy wooden storm windows for your character home. You go to WindowCo and get a quote. Here's what the price is made up of: {[(Glass+PST)+(Wood+PST)+(Paint+PST)+(Shop Supplies+PST)+(%age of overhead, such as tools, office equipment, etc. +PST)+Profit]+PST+GST}.

So in a nutshell, WindowCo is paying PST on every raw material, which gets built into cost and then collects PST at the end in the price of the finished product. And THEN charges PST AGAIN on the finished good. As for GST/HST, do you know why it only shows up once in the equation? Because manufacturers get their GST/HST refunded as an Input Tax Credit. Since they don't have to pay all of that tax on their raw materials and because we are in a free market enterprise economy where the competitive forces of the market dictate price, HST - despite being a higher tax rate - results in less total tax bring paid because the cost of the good is lower.

And that's the story of how the price of Mr. Fugger's storm windows went from a pre-HST price of $3,500 +7%PST +5%GST to $2,800 +12%HST. That is supply and install.

[Bingo]

To be honest the Liberals have had more green initiatives over the last few years than the NDP ever did.

I would think that the additional parkland and the ALR that was created by the NDP far surpasses any green initiatives the Liberals have come up with... unless you are talking about the colour of the swamp they've put us in.

[Bernard]

Help me out with exactly what green policies the Liberals have enacted?

Certainly the "Run of River" projects

Run of the river power is among the greenest sources of electrical power possible. In almost all cases the impact of the run of the river project is so low that the impact can not be measured with any metric going. In many cases I have looked at casual tourist use of the area has a higher measurable impact.

[Sparky]

^^^ Thanks for that Bob. I should have known better that to place my rant in the election thread so we could have debated this topic further...but I was politically motivated after reading an article written by a UVIC professor.

You are correct that a business can benefit more than an end user, but that business needs to sell more product than labour to take advantage of the tax credit.

In my business, purchases of materials for resale used PST exempt numbers so there was no tax on tax.

End users of labour intensive services do not fair as well as end users that purchase products.

VHF and I belabored this point when the the HST first arrived after the last election. I still think we have yet to agree.

Thanks for your input.

[Sparky]

Bob, I know you read Alex, but perhaps some of our fellow VVr's don't. I thought I should share this gentleman's rebuttal to my post.

I will put it in quotation marks as the words are not mine.

"Andrew Woburn says:
September 21, 2012 at 10:52 AM

If I read your post correctly, you are asking why the tax systems were changed and decrying the fact that this government spends cash faster than it receives it. I though I would add a little background on the first issue.

The old manufacturers tax was a nightmare patchwork of inconsistent rules and politically motivated exemptions that even corporate financial people didn’t really understand. It was so confusing retired tax collectors made a tidy living refiling company tax records for free in return for half the savings. It was a job killer for Canadians because US companies could set up “screwdriver” factories in Canada to assemble undervalued US components and so pay less “manufacturing” tax than their domestic competitors. It did tax the manufacturing labour component but not other labour such as sales and marketing.

The change to GST eliminated a raft of problems and the tax was completely transparent unlike the totally hidden manufacturers tax . People always say they want transparency but in fact they hated it. It was a supreme act of political courage for Brian Mulroney to introduce GST and especially to highlight it on every invoice.

The former PST regime was also quite complex and unfairly so to small businessmen who could not really be expected to be aware of the nuances and who were often harshly treated by tax collectors. GST/HST is much easier to understand and administer. PST did tax labour because it taxed the end price which includes all cost inputs. The main change in HST is that it also taxes intangibles such as services and of course, new construction.

When the GST was introduced, the federal government made an honest attempt to ensure that the total tax bill to the public remained about the same. If Campbell had similarly lowered the province’s share of the HST rate to neutralize the impact of the change and had eliminated the land transfer tax for new housing, he would probably still be in office despite the underhanded way in which he introduced the tax change.

Although I prefer the transparency and efficiencies of the HST system, and I know that going back to PST is costly and retrograde, I voted against Campbell because I was insulted by the unbelievable arrogance of his actions. The price is high but if it trains a couple of generations of politicians that they actually work for us,it will be worth it."

[jklymak]

"Andrew Woburn says:
September 21, 2012 at 10:52 AM

Although I prefer the transparency and efficiencies of the HST system, and I know that going back to PST is costly and retrograde, I voted against Campbell because I was insulted by the unbelievable arrogance of his actions. The price is high but if it trains a couple of generations of politicians that they actually work for us,it will be worth it."

Thats completely irrational. Lets screw the economy and force a huge deficit to teach a few politicians we are about to vote out anyways a lesson? Hmmmm.

[Bob Fugger]

^^^ Thanks for that Bob. I should have known better that to place my rant in the election thread so we could have debated this topic further...but I was politically motivated after reading an article written by a UVIC professor.

You are correct that a business can benefit more than an end user, but that business needs to sell more product than labour to take advantage of the tax credit.

In my business, purchases of materials for resale used PST exempt numbers so there was no tax on tax.

End users of labour intensive services do not fair as well as end users that purchase products.

VHF and I belabored this point when the the HST first arrived after the last election. I still think we have yet to agree.

Thanks for your input.

Thanks for the AGT reference. Maybe you want to move these posts into a new thread so we can debate further, as we are way OT, here?

With respect to your post, you are correct in that items that you purchase for resale are purchased with a PST number and therefore the tax is only collected on the end user purchase. HOWEVER, in my example, under the old PST, the window manufacturer is deemed to be the end user of the glass and wood, even though they are only inputs for the final product. He fashions the inputs into a window and charges PST on that.

In addition, under the old PST, a contractor can choose to bill you for supply and install (PST + GST) OR all-included (GST). Most people opted for the latter - no PST, right? WRONG! Again, the contractor becomes the end user and so they are paying PST on wood, screws, glass, paint, etc. Wanna take a guess as to who ends up eating those costs? Sparky, you work with contractors, so we both know that it's not the contractor, lol!

Do you see, now, how both business and consumer win under a Value Added Tax (HST) as opposed to a ****ty, regressive transaction tax (PST)?

One of my first jobs out of university was writing tax rulings for the old Ministry of Provincial Revenue and I forgot how much fun the ins-and-outs of the old PST tax code were!

[Bob Fugger]

Thats completely irrational. Lets screw the economy and force a huge deficit to teach a few politicians we are about to vote out anyways a lesson? Hmmmm.

Agreed. British Columbians are a stupid lot, I am ashamed to admit. We almost make Quebekcers appear sane. Let's punish the guy who backdoored the tax and has already resigned because of it by completely ****ing up our economy. No one will learn any lesson from this - certainly not politicians.

The epitome of cutting off your nose to spite your face.

[VicHockeyFan]

Hmm, some stuff happening in Saanich South with Greens vs. NDP.

Who is the NDP candidate in Oak Bay, BTW (vs. Weaver and Chong)?

[David Bratzer]

Hmm, some stuff happening in Saanich South with Greens vs. NDP.

Who is the NDP candidate in Oak Bay, BTW (vs. Weaver and Chong)?

It's Jessica Van der Veen: http://jessicavanderveen.bcndp.ca/

[spanky123]

Hmm, some stuff happening in Saanich South with Greens vs. NDP.

Who is the NDP candidate in Oak Bay, BTW (vs. Weaver and Chong)?

Greens will run in Saanich South. They can't help themselves!

[Bingo]

Are the advanced polls open yet?

I'm ready to cast my vote, as I don't think anything will change my mind in the next few weeks.

[concorde]

Only 4 months until the dark clouds roll over BC once the NDP are elected. Ah yes, everyone remember the 90's?

[Mike K.]

As some have already said, on the "bright side" (no pun) this may finally yield some monies for the Island after over a decade of playing second fiddle to the mainland and other jurisdictions.

[rjag]

As some have already said, on the "bright side" (no pun) this may finally yield some monies for the Island after over a decade of playing second fiddle to the mainland and other jurisdictions.

I'm no fan of the NDP, but when I see how the Island has been basically ignored especially the CRD for the last decade I'm in agreement with your statement.

I'm having nightmares about how I'm going to vote in my riding of Oak Bay as I'm not happy with the incumbent and the alternatives have no real depth

[Sparky]

When discussing the despicable job that the Liberals have done over the last decade or so, someone said "Cheer up, things could be worse."

So I cheered up and sure enough things got worse.

[Mike K.]

I'm having nightmares about how I'm going to vote in my riding of Oak Bay as I'm not happy with the incumbent and the alternatives have no real depth

Same here. Part of me wants to throw the Green's a vote just to muddy the waters for the NDP.

[UrbanRail]

Only 4 months until the dark clouds roll over BC once the NDP are elected. Ah yes, everyone remember the 90's?

Do you know of a better alternative?

[Mike K.]

Greens?

Or vote for the Liberals. Just keep the NDP out of the hot seat.

[Lover Fighter]

Only 4 months until the dark clouds roll over BC once the NDP are elected. Ah yes, everyone remember the 90's?

You realize it's been over a decade since the NDP have been in power, correct? Anyone observing NDP affairs could tell you this is not the same party it was in the 90s.