PST on bikes?

For me, defeating the HST is about sending a message to our Premiere. He wasn't upfront with us about the tax in the last election.

Just for once I'd like our leadership to treat us like adults.
He could have said, "Look, theres a recession and the Olympics are going to leave us in a hole. If we are going to keep up with our health care and education, we're going to have to add a tax."

Instead he calls an election when he knows he can win it. And then annoucnes the tax and ignores BC tax payers grievances.

Lets defeat the HST just so he knows we care and are not powerless. We can address the taxation needs of the province afterwards.

Gordo's getting a little to big for his britches. The lad needs a big ole' slice of humble pie IMHO.

I'm a tad confused by this post, and I think it may be from my ignornace of the HST. I do agree that value add taxes are beneficial overall, pay-per use taxes are as well.

Does the HST get rid of taxation during in the production cycle? If so, then yes we will likely see a decrease in product wholesale pricing. If not then this can only do harm; this was proved in Japan in the late 90s, when their economy was in the tank the government created a new harmonizing tax but the production cycle taxes still existed. It is blamed as a contributer of Japan's economy taking even longer to take off.

P.S. The auto industry is likley the most heavily subsidized industry in the world (no roads built by tax dollars, then no cars will be bought). Just food for thought.

From an economist's point of view, value added taxation such as the HST spurs investment, and makes it easier for any business to function. This in turn helps create jobs as companies, yes even small mom and pop shops, do not have to pay taxes on the inputs to their business. This creates slightly lower prices for a business to pay for their goods. Lower input prices can either be passed on to the end consumer or kept by the business as profit.
In either case this is a win. If a business keeps the extra profit, they will be more likely to survive, thrive and create more net economic benefit by creating more jobs and paying more income tax as their business grows. If they give it back to the consumer, the consumer benefits at the point of sale. Good for all.

(Note that income tax is not a value added tax. Reducing income taxes and putting in place value added tax creates an increase in economic activity all things equal.)

The PST is not a value added tax as it taxes inputs along the value chain (which means that the end use consumer actually pays far more than the 7% on the end product as that in the production of that product PST was paid on all the inputs. In other words the end use consumer is actually paying PST on PST, on PST etc.), and subsidizes some industries (like bikes and restaurants) while it does not subsidize others. This is patently unfair to those businesses who do not sell goods that have an exemption. A value added tax does not subsidize and therefore makes a business succeed on its own.

If a business only succeeded because of a subsidization, then maybe it should not be in business in the first place.

The HST will create a level playing field among all business and will spur investment in the province which will have net benefits to all constituents.

Whining about the HST is short sighted and neglects to see the larger benefit to the economy. As a province, we need to remain competitive with other jurisdictions. This is one method to do so.

Start the flames…….

I'm a tad confused by this post, and I think it may be from my ignornace of the HST. I do agree that value add taxes are beneficial overall, pay-per use taxes are as well.

Does the HST get rid of taxation during in the production cycle? If so, then yes we will likely see a decrease in product wholesale pricing. If not then this can only do harm; this was proved in Japan in the late 90s, when their economy was in the tank the government created a new harmonizing tax but the production cycle taxes still existed. It is blamed as a contributer of Japan's economy taking even longer to take off.

P.S. The auto industry is likley the most heavily subsidized industry in the world (no roads built by tax dollars, then no cars will be bought). Just food for thought.

I agree that there are many industries that are subsidized and probably should not be. Corporate welfare if you will but that is another topic altogether.

Currently PST is charged all through the production cycle as is GST. However GST gets rebated by the government to the producer if that producer is not the end use customer. The effect of these 2 different tax policies is that GST is in effect only charged once on the final product. Whereas PST is charged on the production (which can happen at multiple levels from raw materials to complete parts needed for another level of manufacturing). This PST from the producer is then incorporated into the price that the retail outlet pays the producer. The retailer also pays PST, which is then incorporated into the retail price. The end user then pays PST on the retail price as well (Big caveat here is that I am not an accountant so I am trying to illustrate a point rather than being perfectly accurate). Therefore the end user could end up paying for PST many times over.

THe HST follows the GST model and therefore the end user is the only one that pays the tax (as the producers have been rebated by the government for what they paid in GST). This is a true value added tax system. The result of a move to HST is that prices could come down to the end user on certain services or products (see my earlier post for other outcomes of reduced cost to producers)