EDITORIAL: Reform the tax reform
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In simple terms, the Harmonized Sales Tax, or HST, is supposed to reduce the tax most businesses pay on a host of items and services.
That in turn, is supposed to increase investment in B.C., creating more jobs, and disposable income, as businesses ostensibly pass on reduced costs to consumers.
Hypothetically, the combination of all that should boost the economy.
Over the long term, it may be true, although there are plenty of critics challenging the theory.
Regardless of how this plays out after July 2010 when the HST goes into effect, there are several aspects of this tax reform which stick solidly in our craw.
Foremost is the impact the HST will have on home prices. The new tax structure will significantly jack up the price of a new house – in the range of $7,000 more for a $550,000 Abbotsford home. The property purchase tax has always been a poorly justified cash grab, as homeowners get fleeced with every home purchase, for no direct benefit or service.
Driving up housing prices seems to run contrary to the objective of stimulating the economy.
Likewise the impact the HST will have on a large range of goods and services, as the seven per cent provincial sales tax is bolted onto previously exempt items, such as restaurant meals and travel.
Even basic domestic services such as hydro, cable, haircuts and home repairs will be hit, and as such, will considerably affect fixed-income seniors and financially challenged families.
That is unfair, and frankly, rather worrisome.
If this tax reform is so vital, it needs vital reforming first.
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