A dumb tax at the dumbest of times
By Peter Ewart
Thursday, September 23, 2010 03:45 AM
By Peter Ewart
Watching the tax-raising antics of the provincial Liberal government, it is hard to believe that North America and the world have just gone through the “greatest recession” since the 1930s, a “recession” that, despite predictions, may be far from over. Indeed, in North America, we may have fallen into a Japanese-style “economic trough” that could last for some years.
It is elementary economic logic that governments should not raise taxes on ordinary people at a time when the economy is either in the throes of recession or is still fragile and just coming out of one. To do so is to risk putting a crimp on consumer-spending and plunging the economy backwards into a double-dip or prolonged downturn.
Thus we see governments all of the world making efforts to stimulate consumer spending and avoid a deflationary depression-style spiral.
But the governments of both British Columbia and Ontario are doing precisely the opposite by imposing the Harmonized Sales Tax (HST), a tax that directly impacts the spending of millions of people.
The latest figures out on retail sales illustrate this effect. Retail sales in July were significantly down both in BC (minus .4%) and Ontario (minus .3%), as well as Nova Scotia (minus 5.3%) which just raised its HST by another 2%. These three tax-increasing provinces were the only ones to show a decline in retail sales. In the rest of the country, sales were up .5%, almost a full percentage point above BC’s.
To add insult to injury, the BC government has recently announced that the provincial referendum on the HST, which it has been forced to organize because of citizen pressure, will not take place for another year.
It is often said that business needs “certainty” for the economy to move ahead. Yet what we are getting from the Campbell government, which always promotes itself as “business savvy”, is another year of uncertainty. This is a political calculation, but one with economic consequences whereby house buyers and others may delay their purchases until after the referendum.
Despite all of this, there are some sections of business, especially big business and especially resource exporters, who are coming forward as cheerleaders for this much hated HST. In effect, they are putting their narrow economic interests ahead of the four million people who live in this province. “What does it matter if the rest of the province goes down the tube,” they seem to be saying, “as long as we have our HST.”
The BC government and big business are not standing up for the people of this province. They are not even following sound economic policy regarding the health of the overall economy in a downturn. Why should anyone in their right mind stand up for them and their consumer-gouging, stimulus-killing tax?
Peter Ewart is a writer, columnist and community activist based in Prince George, British Columbia. He can be reached at: peter.ewart@shaw.ca
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Posted by: Andyfreeze on September 23 2010 8:34 AM
If you want to see how long we have been screwed type "Oh Canada, Our Bought and Sold Off Land" in your search engine. We need to wake up and soon!