Sunday, July 10, 2011

This advice re: the HST referendum

This advice re: the HST referendum: "

If anyone gets their ballot envelope and there is no ballot inside, place contact thand AT immediately.

This is very important so please pass this along to everyone you know asking them to do the same.

Also, please read the directions on the envelope and put your birthdate in the order that is requested – if wrong it could be rejected.

The part of the HST referendum that will cause its downfall is the position the government takes as to its alleged benefits.

This tax will, we’re told, make business more competitive because it reduces their accounting costs and that’s a very good thing. Absent from this position is any discussion of just why this benefits ordinary British Columbians.

Is it supposed that big business will see the savings and cut the cost of their product? If that is to be the case, surely the widget company would open its books and say “see? We have saved a million dollars which means the cost of widgets is immediately lowered”. Instead of grand sweeping statements, why hasn’t business done this?

The suspicion is that this is because it isn’t so and that any savings will be passed onto shareholders and executive bonuses. They claim these savings will be passed on to me and thee. This bit of Milton Friedmanism has long been discredited and it’s as Kenneth Galbraith said:- “Trickle-down theory – the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows.”

If the HST is a good thing, the Minister of Finance and the Premier ought to be able to demonstrate that – and evidently they can’t do so.

Those who favour the HST say that “consumption taxes” are fair because they are “user pay”. And if you are a fan of “user pay” they are right. Moreover the tax is easier and cheaper to collect – at least we’re told this.

But consumption taxes are not fair, especially when they’re on necessities, Even given the pay back cheques, the consumption tax hits the less well off much harder than the more prosperous. I make the same argument against tolls on bridges and highways.

I was highly critical of Premier Glen Clark when he expanded the PST to services such as legal fees. The premier seemed quite unable to understand that it wasn’t the lawyer who paid this but the client who would be discouraged to avoid having a will drawn and matters like that.

The only fair system of tax is the graduated income tax.


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