HST - Is Manitoba next?

Good point, but I think most people would be more interested in having a discount 'at the till' (so to speak) rather than having to wait 3 months for their next GST cheque. Not to mention that the federal GST/HST credit program (which I presume is what you are referring to when you referred to the 'fed's GST rebate', as opposed to the separate general rebate program for specific items) is, at best, a pretty rough guess as to how much GST lower-income people pay (and from what I recall when I was eligible to receive it, nowhere near reality).

All good points (although I think you meant to say "Sadly, that may not be a minority.").  I guess I have little faith in the ability of the bureaucracy to actually be that nimble or efficient.

Having two taxes that do almost the same thing is just a waste of time and effort.  I wonder if business would be willing to share the savings with an increase in the corporate tax or something similiar? 

Yes I agree.  I know first hand about the issues that two systems create.  GST was fairly simple but the sales taxes vary in rate from province to province and have tons of exemptions and sometimes the exemptions are complex in that they apply to only specific consumers in specific transactions.  Particularly in an automated world two duplicate taxes just creates a lot of extra steps and expense.  My point was that if the harmonized sales tax would provide real cost savings, that business should be willing to pay for its implementation (not just ask for it).

I'm no economist (paging Stephen Gordon) but I understand that part of the pitch on HST 'savings' is that currently PST is levied at various points along the goods pipeline, and since businesses cannot deduct the PST they pay on goods and materials, those costs are eventually passed on to the consumer as a sort of 'hidden' tax. With a harmonized tax, businesses could get credits for PST paid on raw materials and goods, as they currently can for GST.  Someone should feel free to correct me if I'm wrong.

wage zombie wrote:

I disagree.  In an automated world a lot of extra steps should not create much more expense.  

The thing is that there are so many 'fixes' that are put into the system.  A Governement makes a change and IT changes the % and pushes a button and it is overwritten throughout the system.  However it turns out that some of the businesses have a BC address in the system but the billing address is Alberta or they are GST or PST exempt or for a select range of products all of which the previous IT person had made patches for but didn't leave instructions when he left.  Bills fly out and customers pay them until one day months later they notice the error and flip out over how they have been robbed.  Hours are spent by accounting digging through bills and creditting the account.  Cost in time lost, cost in company reputation - Complexity costs money.

Another way to make it more progressive is to institute a progressive income tax cut. In fact that could be used to ensure the HST is more or less revenue neutral, if Doer so desired. People that aren't on the tax rolls would still some form of rebate. An income tax cut also might have the added benefit of boosting provincial savings and generating more lending capacity for private investment.

Stephen Gordon wrote:

No, the way to make sure it's progressive is to give money to low-income households - which is what the fed's GST rebate does. There's no point in exempting goods that rich people buy as well.

More reasons to not like economists. They live in the bubble world. Many low income households will be paying extra tax and NOT get rebates. Its just a fact. Many people of low income, marginalized, etc, who do not pay the GST do not get back a cent. Especially if they are homeless.

It is like Chomsky says.  You cannot fit all the extra parts (ie accepting the need for funding to people not on the tax rolls) into a simple statement.  Therefore you open yourself to criticism.

I think that if we are going to truly reduce consumption we have to use every tool of the state and taxation is one of the biggest.  Implicit in this is that any new mechanism must be tweaked to protect the most vulnerable.

Stephen Gordon wrote:

For some reason, whenever I suggest giving money to poor people might be a good way of alleviating poverty, babblers confidently inform that this is a bad idea.

This puzzles me.

It puzzles me how  you  believe that the addition of the GST, one of the biggest tax grabs in Canadas history, benefited the poor. 

You have my attention.. Do you know where you are going with this?

Stephen Gordon wrote:

The idea of the HST is to simplify things so that people don't have to deal with two separate taxes. With the HST, the GST and the local PST become - as far as anyone who has to pay/collect it is concerned - a single tax. Once it's collected, the feds and the provinces share the revenues.

 

In Ontario, I pay PST on flipping a Used Car but do not pay GST.  With a Harmonized tax, I will pay Both taxes.

I would like you to explain to me, that is a car is sold 12 times in 5 years it should be taxed 12 times. Where as a car sold 3 time times is taxed on 3 occassions.  Its a used vehicle and shouldn't be taxed, but it has been a major source of revenue for Provincial governments which is the only reason it exists and one of the sweetheart pickups for the Feds.

If you argue for this, then you may as well support the Tobin Tax.