*clapping*
It amazes me how little people understand what exactly is going on with the HST. It is a tax shift more than anything, that will leave a shortfall and we are supposed to think this is progressive and be afraid to talk about it?
Totally mindblowing.
I am appalled and angry to read MacKenzie's words. There is so much wrong with them but I'll cover just a few points:
The harmonization is not just about consumption taxes it is about a tax on labour because that is what the services component means. In the middle of a recession we are going to increase the tax on work. What person of the left could condone such a stupid measure while dismissing opposition as being nonsensical? Mackenzie does not even seem to recognize that services are locally provisionned labour while goods are for the most part imported.The provision of goods is largely mechanized while the provision of services is mostly the labour of working people. Before going after the opponents of the HST Mackenzie should at least acknowledge that fact.
The new tax will change little other than the input tax provisions when it comes to Goods-- and this is regressive as well. Registrants will claim back the tax they pay taking registered business out of the equation. Others will pay and this includes consumers and the very small self-employed people who make less than $35k a year and who are not registered because for the amounts they pay the paperwork is too onerous-- and of course we do not care about their means.The concept of a progressive taxation according to income is for some reason being thrwon out the window while we embrace regressive consumption taxes. The previous provincial tax exempted many essentials. The degree in which a sales tax can be in part be progressive is related to the number of essentials that are exempted. This means those who spend more of their money on essentials pay less and those who spend more on luxuries pay more. This harmonization gathers hundreds of essentials and will tax them at the equal rate for the first time.
The false assumption here is that people spend according to their means. The harmonization is going to tax heavily a whole raft of essentials from insurances to home heating to utilities. It is going to raise the selling price for a great deal of services from auto repair, to legal services to education courses and public transit. It is going to hit cultural products. Shifting from a tax on earning to a consumption tax means people of low income struggling to pay for services who do not earn enough to pay income tax will pay more while those who have more money than they need to spend in Canada will pay less. Those who can save or spend money on vacations abroad are the winners here.
Seniors deserve a special mention. They consume extra services because they physically need to buy help for the activities they cna no longer do. The combination of the home renovation tax credit and this is clear: those homeowners who need to make repairs on their homes and who have income to deduct the cost against win. Those who are poor but unable to cut their own grass or get the porch painted get screwed.
Canada, we are told is a service and resource economy. Taxing goods for the most part falls on imported goods. Taxing services disproportionately taxes Canadian labour since services are not provided at such great distance as goods. This is a tax on the local economy. The fact that it does not tax much union labour as most services are provided by small business and unorganized labour does not mean that this is not a tax on Canadian labour-- and for the most part the lowest paid of Canadian labour. To support doing so in a recession claiming that left wing opposition to this measure is nonsensical is as much out of touch as it is arrogant.
When it comes to small business self employed people and services let's not pretend that this is just about increasing the burden of cost. There are many activities that have a limited value (for example adding extra cost to a court action may make justice unaffordable if the cost of obtaining a judgment is more than it is worth -- I have a friend who offers paralegal small claims court services and the increase in his fees after tax will mean more cases will not be worth pursuing). Other services you could do yourself if the price goes up: I know people who clean other people's homes for a living-- the added cost could lead to those people doing the work themselves.
Now the CCPA already knows that we have had our safety net hammered by government policy. The employment stats have shown that people losing good jobs in the middle of a recession are turning towards self-employment. Taxing their work, now, as they lean on anything to replace the better jobs lost in this economy, is cruel and stupid.
Now I am just starting--there are loads of good arguments to be made from the left against the reliance on consumption taxes in general, the abandonment of progressive income tax as a revenue base, service taxes, and the widening of Goods and Services taxes to eliminate exemptions. I can accept to disagree with an economist such as MacKenzie on some of these but to have him arrogantly say that there is no sense to the opposition from a left point of view portrays a person out of touch with many Canadians who live in the real world. Perhaps he should put down his pencil and go out and talk to some real people who earn less than he does.
Many people in the union movement put a lot of effort into fighting for those who are not unionized, for those who already do not have good jobs. Who struggle without work or at low wages or self employed. Perhaps Mackenzie can speak to those people if he does not know anyone who actually fits into the low income categories himself. Otherwise he can spend a little time reading the CCPA's own publication on the topics from the 1990s when the CCPA fought loudly and hard against consumption taxes.
The Chretien Liberals won EVERY SEAT IN ONTARIO campaigning against the GST.
The Liberals also made themselves out to be the best chance to reverse Brian Mulroney's CUSFTA. One year after the LIEberals won the '93 election, they signed the ssssstupidest trade deal in the history of the world. And I believe those two major election campaign flip-flops contributed significantly to Canada's low voter turnouts, and ranking between Fiji and Benin's, in the decade of the 90's. Canadians hate being lied to, and those betrayals are still evident today with the two most well-funded parties not managing anymore than 22% of registered voter support in last year's federal election.
When a single position makes losing inevitable it's kind of a moot point whether it's a "good idea" or not. An inheritance tax may be a good idea but any party that campaigns on it is going to lose.
And as we all know, of course, winning is more important than having good policies.
To Sean in Ottawa: You rock!
Excellent post Sean!
@M. Spector. Having a "good policy" that never ever ever gets enacted strikes me as silly. I guess it might make a person feel importnat to be "right" but it's pretty cold comfort to people who need to see progress if they're going to put food on the table.
To heck with the actual struggle, it's all or nothing socialism now or never!! US Trotskyites and their Canadian counterparts are still waiting for that perfect revolution which will never happen. In the meantime, they don't want to be bothered. They have more important things on their agendas, like pulling down the NDP from fourth party status in Ottawa. Real revolutionaries they are.
*clapping*It amazes me how little people understand what exactly is going on with the HST. It is a tax shift more than anything, that will leave a shortfall and we are supposed to think this is progressive and be afraid to talk about it?
Totally mindblowing.
Hell there was even a HST protest here in our small community yesterday, and they never protest about anything.
good remind - people are mad and they are not taking it anymore.
I am appalled and angry to read MacKenzie's words. There is so much wrong with them but I'll cover just a few points:
Sean, I appreciate your post as it well thought out and doesn't just reiterate NDP talking points.
I'm actually undecided about the HST. I see Mackenzie's point, but am not convinced.
My problem with the NDP as of late, especially at the provincial level, has been the way opposition to taxes has been framed, as well as for making them the central issue. In the last BC election there was the "Axe the Tax" campaign. And in Ontario it's difficult to distinguish between the NDP and the [url=http://www.youtube.com/watch?v=H-MnD2ImJeA]Hudak/Tory opposition to the tax[/url].
Using terms like "tax grab" feeds right into rightwing, "taxes are theft" type sentiment.
@M. Spector. Having a "good policy" that never ever ever gets enacted strikes me as silly. I guess it might make a person feel importnat to be "right" but it's pretty cold comfort to people who need to see progress if they're going to put food on the table.
What strikes me as silly is trying to get elected by ditching good policies. If you get elected, you have no mandate to do good things. And if you don't get elected (which so far happens 100% of the time) you end up with neither power nor principles.
In BC this anti-tax campaign is working very well. Bill Vander Zalm has not had this much coverage since he was handing out brown paper bags in parking lots. THE BC Conservative party is also doing well with the same anti-HST campaign. The HST is a bad tax but compared to the other policies that are happening it is not the most important issue to highlight.
In the din around the HST what is getting lost is tax breaks for the oil companies, draconian legislation that allows the homeless to be arrested and forced into shelters for their own good and a total denial of citizens rights to freedom of expression anywhere in Vancouver during the Olympics. Those are real issues that have to be brought forward. Incensing the mob is easy trying to educate people is far harder. If Tommy had concentrated on incensing a mob instead of steadily educating people one town meeting at a time we would still have health care run by American insurance companies.
The Chretien Liberals won EVERY SEAT IN ONTARIO campaigning against the GST.
A magnificant gesture of hypocracy by Chretien. Once in power they kept the GST as is, voting down an opposition motion that came straight out of the Liberal campaign red book.
Can't say I'm impressed with that bit of history.
-Looking for an honest man
Fair enough. Maybe the inheritance tax could be repackaged in a way that garners more voter support - but the idea was really stinking the joint up back in 2004.What strikes me as silly is trying to get elected by ditching good policies. If you get elected, you have no mandate to do good things. And if you don't get elected (which so far happens 100% of the time) you end up with neither power nor principles.
Personally, I think the fight against HST, is educating people.
Before the advent of this fight, most people never took apart, 'GST" and examined what is happening in the "S" componet of the taxation.
It is a tax on services, or in other words, people's labour.
Basically, the "government" has decided they have a right to tax people's efforts at making a living wage. So now the workers pay taxes to the government on their wages, and they also pay taxes on their own work efforts, to both the federal and provincial governments no less. This implies government ownership of people and their labour, as opposed to a government that is a representative of the people's will, working for the people.
It is a huge shift in ideological underpinnings, and it basically infuses a fascist mind set, where the state is the controller and owner of all people. Said collected money, is not returned to the people in infrastructure and enhanced services, it goes to banks and corporations feeding at the trough, or corporate colonial endeavours.
Don't you understand, Diogenes? Party policy is not something you actually [b]plan to do[/b], but just something you use to [b]bait the hook[/b] at election time. If one lure doesn't work, you try another.
That's the Sunday Hat theory of electoral politics.
What strikes me as silly is trying to get elected by ditching good policies. If you get elected, you have no mandate to do good things. And if you don't get elected (which so far happens 100% of the time) you end up with neither power nor principles.
You just don't like our obsolete electoral system forcing the NDP to play at old line party politics in Ottawa, I can tell.
The theory is: you want a majority of people onside with you. If you don't have a majority you're kind of just masturbating.
Variations on a theme.
Campaigning against [url=http://archive.ndp.ca/ourhistory/]"corporate welfare bums"[/url], Lewis achieved his greatest political prominence in 1972 when New Democrats held the balance of power during the Liberal minority government of 1972-1974. Parliament introduced a national affordable housing strategy, a new Elections Expenses Act, pension indexing and created Petro-Canada and the Foreign Investment Review Agency, because of NDP support...In May 2005 Layton negotiated an amendment to the government's budget in exchange for NDP support in the minority Parliament. The NDP's budget amendment included deferring $4.6 billion in corporate tax cuts and instead invested that money into lowering costs for education, cutting pollution, building affordable housing, more transit, increased foreign aid, and new protection for pensions in the case of employer bankruptcies. Another example in the NDP's long history of getting results for people.
Canada has bags of room on the federal tax revenue end of things. Bags of room. Canadians need strong central government, which has been lacking in Ottawa for far too long.
The NDP seem to have fallen into the same trap as other parties often do.
If the ruling party suggests some sort of change, then you must oppose it at all costs to differentiate yourself.
It would be refreshing to see a party actually say that the ruling party has some good ideas which they support.
Even when Mcguinty increased minimum wage significantly, all the NDP could do was say not fast enough and not high enough.
Not a single word of encouragement. That sort of blanket criticism tends to undermine their credibility and make people wonder if the NDP are more interested in power, or bringing about the right kind of change.
Even when Mcguinty increased minimum wage significantly, all the NDP could do was say not fast enough and not high enough.
You seem to have a much different understanding of the word "significantly" than I have.
I thought the ONDP did a good job on the living wage issue. It worked well in the Parkdale-High Park and York South-Weston byelections. Remarkably, some thought the anti-HST campaign was in the same spirit.
"You seem to have a much different understanding of the word "significantly" than I have."
I think an increase from $8 bucks an hour to $10.25 over three years is significant, but given your need to criticize everything that the Ontario Liberal government does, I can see why you would dismiss it.
Let's put it this way then, if we reduced minimum wage from $10.25 to $8 an hour, would you view that as a significant decrease?
I find your efforts at dismissing this as insignificant to be particularly insincere, given that it was probably the NDP effort that made this happen, and they were only calling for $10.
I think minimum wage is becoming respectable, certainly by North American standards.
However, social assistance, is set at applallingly low rates and needs to be raised upwards substantially.
This is where we should be putting our criticisms of the Ontario Liberal government.
1) I thnk shifting the tax burden from business to consumers is pretty much in the same line as holding back the minimum wage. The exact same people (Jim Flaherty, Chamber of Commerce, Gordon Campbell) supported both.
2) I think the NDP should be careful about opposing EVERYTHING but I don't think that precludes opposing an unpopular, unfair and regressive tax change. The Ontario NDP voted in support of the Liberals Green Energy Act and endorsed plans for full-day JK and SK (in both cases the Liberals were moving in areas after the NDP pushed them there).
Maybe the inheritance tax could be repackaged in a way that garners more voter support - but the idea was really stinking the joint up back in 2004.
Exactly. You look at right-wing organisations and lobbyists, they're always putting their ideas out there, going against the grain, and gradually winning over people that way. The inheritance tax, a good idea, was dropped like a bomb in the middle of the platform, and it is no surprise that it would backfire miserably in an anti-tax political climate that exists here. All I ever saw on that idea from the left was one editorial by the CCPA defending the idea after the NDP had withdrawn it. So my question to all of you criticising the NDP for dropping this idea is: what have you done, either before or since, to get the argument out there and make the inheritance tax palatable to Canadian voters?
"You seem to have a much different understanding of the word "significantly" than I have."
I think an increase from $8 bucks an hour to $10.25 over three years is significant, but given your need to criticize everything that the Ontario Liberal government does, I can see why you would dismiss it.
The NDP called for an immediate increase to $10 an hour. The immediate increase under the Liberal bill was nothing, and the first increase a year later was only 75¢, not even halfway there - in fact, as you well know, we're still not there.
Let's stop saying the HST is regressive. In Ontario it definitely is not. In fact in Ontario it moves more of the tax burden on mid to high income earners while low-income earners actually get more income out of it. The enhanced Ontario Sales Tax Credit and Ontario Property Tax Credit are part of the whole HST package and cannot be removed from the analysis of whether this is a progressive. A prominent NDP economist supports the HST on those grounds (and I've seen another independent analysis of the government's numbers that find the same thing).
Hugh Mackenzie's analysis has been well-refuted here. No response to those objections?
What do you mean by "well-refuted?" I haven't seen any specific refuting of what Hugh said on this thread.
I think Sean is the only one who really made an effort to "refute" Mackenzie.
Of course the hardcore partisans here think the ONDP has done a brilliant job in terms of showing how "unfair" the HST is.
Sorry, it wasn't all in this thread, though Sean's post was certainly a sweeping rejection. Other issues include the massive amount of foreign ownership in Canada that will once again escape taxation as they extract our wealth out from under us and the major differences between our economic structure and that of the scandinavian countries held up for comparison in the CCPA article.
The applicability of each market comparison is key: a country that has few retail sales of domestic products with higher wholesale material sales (effectively exempt by the credits in a value added system) and higher services -- such as Caanda -- cannot be compared with a country that makes a large number of domestic retail goods.
Do you know where Sean's analysis is? I'm curious...I've seen two independent models of the HST impact, one from Hugh MacKenzie and one from another progressive researcher, showing the impact of the HST is progressive. When I say "progressive" I mean it that in the usual sense: that it taxes lower income less (and in this case actually redistributes income to lower income earners) and taxes higher income more. I'd like to see how Sean modelled it.
As opposed to the rose-coloured glasses being modelled by Hugh Mackenzie?
The NDP seem to have fallen into the same trap as other parties often do.
If the ruling party suggests some sort of change, then you must oppose it at all costs to differentiate yourself.It would be refreshing to see a party actually say that the ruling party has some good ideas which they support.
Even when Mcguinty increased minimum wage significantly, all the NDP could do was say not fast enough and not high enough.
Not a single word of encouragement. That sort of blanket criticism tends to undermine their credibility and make people wonder if the NDP are more interested in power, or bringing about the right kind of change.
So now the federal NDP is saying that the expansion of EI that the Tories have brought in is a step in the right direction and worth supporting. In other words they are doing exactly what you are asking for here. All it seems to get them are cries of "betrayal" and "propping up Harper".
Let's stop saying the HST is regressive. In Ontario it definitely is not. In fact in Ontario it moves more of the tax burden on mid to high income earners while low-income earners actually get more income out of it. The enhanced Ontario Sales Tax Credit and Ontario Property Tax Credit are part of the whole HST package and cannot be removed from the analysis of whether this is a progressive. A prominent NDP economist supports the HST on those grounds (and I've seen another independent analysis of the government's numbers that find the same thing).
Sorry, but this is totally 100% wrong.
Consumption taxes by their very nature penailze those with the least the most- by definition. The 'payments' will be eaten up very quickly while the tax will continue. In areas like mine where no public transit exists, the fuel tax portion alone with cause a large increase in costs to the avergage person from those on fixed income, to minimum wage earners to parents having to travel extensively just to have their children participate in sports. Then add in heating fuel (most other heating options, except for wood are just not available), insurance and the loss of point of sale exemptions for farmers and we start to see a large impact in cash flow. It is not all about tallying at the end of the year.
Any pretence that there is any progressive portion to this tax is down right silly. Hugh MacKenzie's analysis is based on some very broad assumptions that do not exist for those of us in rural Ontario at least, and I expect elsewhere.
Do you know where Sean's analysis is? I'm curious...I've seen two independent models of the HST impact, one from Hugh MacKenzie and one from another progressive researcher, showing the impact of the HST is progressive. When I say "progressive" I mean it that in the usual sense: that it taxes lower income less (and in this case actually redistributes income to lower income earners) and taxes higher income more. I'd like to see how Sean modelled it.
Post 52 of the same thread you are reading-- others have written interesting things as well-- why don't you take the time to read the whole thread-- it is worth it as this is an important subject.
I do sympathise with Hugh Mackenzie's issue with the NDP being identified as 'anti-tax'.
I also think it is nonsensical for the left to come out in opposition to tax increases. I have yet to hear a coherent explanation as to how a party of the left is going to benefit long-term from stoking up opposition to taxes.
That said, I think that it is completely possible to campaign on the issue of 'tax fairness', as opposed to being 'anti-tax'. And I don't think the NDP did that particularly well in the recent St. Paul's campaign. Indeed, I don't think that during a campaign is the best time to introduce a nuanced position on a major issue. Now is the time for the NDP to distinguish their position from that of the PCs.
Now is the time for principled opposition to the HST.
LTJ-- I totally agree.
It is a serious problem to reduce this into tax bad spend bad -- it is more about how you tax and what you spend the money on.
The Cons do tax and they do spend-- the problem is they tax regressivley and have terrible spending priorities
The other thing Olly seems to be missing and has been pointed out repeatedly by Sunday Hat and myself that it is totally unfounded to look at the HST separately.
The HST must be seen as a total tax package- a package that shifts tax burdens as much as anything. In this case we are looking at about a $7 billion shift from profitable corporations onto middle, working class and more vulnerable individuals and small business with about a $2 billion shortfall. The government has not said where that $2 billion will come from.
The other thing I have noticed in meetings on HST implementation I have sat in on for my day job is that the $7 billion figure is probably the conservative end of tax revenue. In other words the tax burden for individuals and small business being transferred to them to make up for $7 billion in corporate tax cuts (with no strings attached by the way) is likely much greater. Which means as individuals we will be paying much more than any balance cheques the government will be giving back.
It isn't about being anti-tax it is about how and who we tax to provide the services we all benefit from and contribute to our economic competativness.
It isn't about being anti-tax
Well that's how the anti-HST campaign comes across.
(I realize you have a more substantive point - but will have to address that later).
I'm not addressing the effectivness of the campaign. I think that is a different issue and one I can only say doesn't seem to have much traction yet.
I am addressing the issue that it is somehow anti-progressive to condemn the HST for what it is - a tax shift onto small businesses and individuals while potentially leaving a shortfall - which may mean eventual cuts to services down the road. That's assuming you believe the governments math.
Post 52 of the same thread you are reading-- others have written interesting things as well-- why don't you take the time to read the whole thread-- it is worth it as this is an important subject.
Why the sarcasm? I read the damn thread, somehow missed your post. In your "analysis" you don't take into account the two permanent tax credits - Ontario Property Tax Credit of $900/year, and Ontario Sales Tax Credits of $260 per person in a household per year - which are part of the HST package and have redistribution effects. At the end of the day, low-income Ontarians will have more money in their pockets than before the tax was implemented. Why is that so bad? Scandinavian countries have goods and services taxes, coupled with credits to redistribute income back to low-income earners. Why is following Denmark or Sweden such a bad model for Canada?
No they won't, have more money in their pockets, and people will as a end result have decreased amounts of every public service too, see this thread, and do some out of the box thinking.
No they won't, have more money in their pockets, and people will as a end result have decreased amounts of every public service too, see this thread, and do some out of the box thinking.
Can't speak for BC but in Ontario they absolutely will. Two outside of government independent analysis has shown that, including one by an NDP economist.
Slap up the links
Post 52 of the same thread you are reading-- others have written interesting things as well-- why don't you take the time to read the whole thread-- it is worth it as this is an important subject.
Why the sarcasm? I read the damn thread, somehow missed your post. In your "analysis" you don't take into account the two permanent tax credits - Ontario Property Tax Credit of $900/year, and Ontario Sales Tax Credits of $260 per person in a household per year - which are part of the HST package and have redistribution effects. At the end of the day, low-income Ontarians will have more money in their pockets than before the tax was implemented. Why is that so bad? Scandinavian countries have goods and services taxes, coupled with credits to redistribute income back to low-income earners. Why is following Denmark or Sweden such a bad model for Canada?
Olly-- I was not being sarcastic-- I truly meant that this thread is interesting and worth a read all the way through. In part I meant that because someone had said something nice about my post and I wanted to add that others had also written interesting things. I do not think all threads are worth reading in detail and I don't have time to read every thread here so would take at face value someone saying this one is worth the read.
I see nothing anywhere near sarcastic in what I said. I have been sarcastic from time to time on this post-- sometimes it can be effective communication. However, when I am, it is obvious-- why don't you just take what I said at face value? If I wanted to insult I would have done so directly. As I write this I am getting more annoyed at you-- I'll admit.
I do not know how you could have read the whole thread and missed the longest post in it that was discussed by several other posts-- but OK.
But let's look at the substance of what you said: property tax credits are irrelevant because these tax credits are for property tax. Sales tax credits:
The $260 amount is a maximum for those earning under a low income threshold so they are clawed back so few people will get the maximum amount. Perhaps someone who files taxes AND who earns less than $10,000 a year might come out ahead. But there are many people who are struggling who earn over 10K and who will not get the maximum here. Let's have a look at that maximum: In Ontario with a 13% tax you only need to spend $2000 to pay $260 in tax. Let's forget trivial things people don't need like say clothes or toiletries, transportation or car insurance naaaaaw. Let's take a look at hydro and heat. Those paying hydro and heat can easily pay that much ALONE in a year. So then, if abso-fucking-lutly if they are desperate enough they might get the tax back on their heat and hydro and then get fucking screwed on everything else. So Olly-- now I am being sarcastic or rude-- Did you do the math associated with your argument or just pull it out of the air????
No -- I did not bring up the property tax credit when talking about sales taxes-- because it is not about sales taxes.
No -- I did not bring up the sales tax credit because it is insignificant to the argument and few people will get the max-- even among people most would consider low income.
Oh-- another point-- there already were sales and property tax credits and you say people will be better off than before the new tax was brought in. Then you use the entire amounts. How much of the $900 or $260 is actually new? You can only use that "new" amount in calculating how better off people will be-- or won't be. And when you do that consider the new amounts both for seniors and for under 65 people as they are different.
Now I hope I have been clear enough for you (and yes this is sarcasm now).
Frankly these tax change policies screw over the poor because too many people who claim to speak for them don't know how to run a friggin' calculator and see that it's a load of bull.
Does that work for you??
Here is Canwest on the topic:
http://www.kelowna.com/2009/09/21/ontario-b-c-hst-changes-will-add-0-7-p...
"However, "the tax burden will shift from businesses to consumers, who will now pay the harmonized tax on a broader array of goods and services than before, " the report said, adding the overall price level will increase by 0.7 percentage points in both provinces...."
While consumers will find themselves paying more tax on certain goods and services, the hope is that the higher costs will be offset by stronger sustainable income growth," it added.
The report noted the Bank of Canada does not consider sales taxes when deciding whether it needs to adjust interest rates to achieve two per cent annual inflation."
Sounds like the point is economic growth will make some rich guys richer so that justifies letting the poor get screwed on this tax shift to consumers without regard for their income from businesses.
It's a regressive piece of shit and it does not take much reading between the lines to see that.
Here read this on how renovators and the building industry will be affected:
http://www.handycanadian.com/articles-ontario-hst-attacks-renovators.asp
