In all of the publications about HST, no one has outlined why we should support business.
1. Common sense says that when the B.C. government budget is $9,800 for every man, woman and child living in B.C., we cannot generate $39,200 for every family of four by trading amongst ourselves. It is logical that business must step up and export goods and services to take up the slack. For this reason, we need the government to encourage business to locate and expand into B.C.
2. Common sense says that if business costs increase by the PST, then business will recover those costs by increasing prices to the consumer. Instead of paying HST, a consumer will pay a higher price for the product, then pay GST and PST for a particular item. In simplistic words, a tax on a tax.
3. Common sense says if I am a business executive considering investing $1 million in a new venture, then the investment will take place where you get the biggest bang for the dollar, i.e. if the business is going to invest $1million in new computers and office equipment, where do we invest? Common sense says invest in Ontario or Alberta. It is particularly punitive if any borrowing for the expansion of new ventures is required, then the business must borrow just to pay tax. Business will also increase its selling price of the product to recover the extra cost. If base cost of doing business is equal by retaining the HST, the decision to invest will be determined by other factors such as quality of life for the employees.
4. Common sense says one tax is better than two taxes for the following reasons:
a. One reporting form is better than two reporting forms.
b. One deadline for filing is better than two different deadlines for filing.
c. One set of exemptions is better than two different sets of exemptions.
d. Less staff training on the different exemptions.
e. Less chances of error on one tax system rather than two tax systems.
5. Common sense says one sales tax audit is better than two different sales tax audits.
6. Common sense says the simpler the tax system, the easier it is for businesses to comply and for the government to enforce.
In general, common sense indicates that a commodity tax (consumption tax) is a fairer system of taxing society because:
1. The wealthy or high income people pay more tax because they spend more disposable income on taxable items.
2. The underground economy pays tax on everything they buy. Therefore, drug dealers and other people who avoid income tax pay a commodity tax.
3. Tourists pay a part of B.C. government operating costs by paying a commodity tax.
4. Making less red tape for business attracts new business to the province.
All tax systems are going to hurt some segment of the economy, however, common sense says we must consider what is good for us on an overall basis. Common sense indicates we need a competitive tax system which will attract new business expansion to the province. Common sense says new business equals new jobs with job spinoffs.
We need to get over how the HST was introduced. Very few rational people believe the political rhetoric the B.C. government has given us about the introduction, but common sense says HST is best for B.C.
Vote with me to retain the HST. Vote no.
P.J. Lett, FCA
Vernon
