Upcoming BC HST Referendum

by Dave on June 29, 2011

Below this text are two letters. The first is a letter sent to me from Adrian Dix of the BC NDP discussing why he’s against HST in British Columbia. Following that letter is my response that asks why the NDP is not willing to debate this issue honestly. I’m not a BC Liberal for any number of reasons and even though they’ve been equally dishonest in terms of bringing real points to the debate, I didn’t just receive their letter in my inbox tonight.

I would love to hear from people on the honesty of this HST debate and whether they feel I’m off-base in believing that no side is coming clean about anything other than their willingness to posture against one another.

From Adrian Dix:

David

Yesterday, my campaign manager for our Vote YES BC campaign wrote you a detailed email about our plans to win the referendum and scrap the HST.  I wanted to follow up today with a short note to you personally.  I wanted to let you know just how critical your personal contribution of $10.00  is to our campaign, right now.

The HST is the largest single tax shift from corporations to families and small businesses in the history of British Columbia.  The HST is not just about how much your taxes are. It is about who pays for public services — and more than that, this referendum is about whether we will maintain high quality public services like Medicare at all.

Throughout my career I have wholeheartedly rejected every attempt to take money away from vital public services. They must be funded, they are critical to our communities.  There is a model for public funding that works – progressive taxation that sees corporations, small businesses and households pay their fair share.

With regressive new taxes like the HST – corporations pay less and you pay more.  The HST adds seven per cent to hundreds of everyday items like a cup of coffee, bicycles, home renovations and school supplies while reducing taxes on some of the most profitable corporations by almost $2 billion – including businesses that operate solely by extracting your publicly-owned resources.
You pay more every time there are increases to the user fees like MSP premiums, ferry fares, tuition fees or transit fares.
You pay more every time sales taxes are added to critical household goods.
Funding efficient public services takes strong support for those services.  But families cannot be asked to shoulder more and more of the burden. The HST is about making the biggest corporations in British Columbia pay less for public services and has been brought in by a government that has given up on supporting critical services like education and health care.
Today, I am asking you to come together with every New Democrat and everyone opposed to this unfair tax, right now and help obtain an overwhelming YES vote to scrap the HST.

The choice is simple.
Vote Yes to Scrap the HST and end this massive tax shift from big corporations to you and your family.
The best way to help make this happen is to make a donation of $10.00-a donation that will fund our campaign by $40.00 thanks to a generous tax credit worth $30.00.
Go online to our VoteYesBC.ca website and donate, right now.
Donate a tax-deductible contribution to our campaign to scrap the HST by voting YES in the referendum.
-Adrian
PS: Neil Monckton, Vote YESBC Campaign Manager and several others on my campaign will be sending you important emails over the next few days and weeks, as we work hard to defeat this unfair tax.  Together we can win this campaign!
PPS: Even Christy Clark has admitted that she is using sales taxes for important public services: “Cutting the HST by one point is more than $800 million out of the budget this year and every year after that, $1.6 billion for a two-point cut… we’re going to have $1.6 billion fewer heart operations, special needs teachers, school facilities, hospital emergency rooms.”[1]  This was back in March before she decided to desperately try and cut the tax rate to save her tax shift.  At the time Christy Clark also said: “We aren’t going to be talking about trying to reduce [the HST] by a point or two before the referendum. I mean, I think people will see that as buying them with their own money.”[2]
[1] Red FM, 21 March 2011
[2] Red FM, 21 March 2011

My response:

Dear Adrian [Dix] and Jenny [Kwan],

I wanted to write a response to this letter because this debate is something that bothers me to no end. For disclosure, I’ll say that I’m for the HST, but barely. If I have 100 votes, 51 times out of 100 I would vote for the HST. In August 2009, I wrote a blog about the HST where I explained why I was against it initially and I’m open to changing my view again before casting my vote in the referendum. I am a past member of the Vancouver Board of Trade, active member of the Canadian Federation of Independent Business and a Certified Management Accountant and I’ve worked hard to make sure these special interest and lobby groups don’t speak for me on the issue of HST in this province.

What I would love from just one side, if not both sides, is honest debate and I don’t believe this letter executes that very well. I can appreciate that some posturing has to occur if you must. I was at Kevin Falcon’s press conference on red tape last week and it was great until he uttered the words “…unlike Adrian Dix and the NDP if they were in power.” It’s unfortunate that there’s really no indication that common ground could ever exist on anything in order to benefit all British Columbians, but I digress.

In this letter, there is mention of the savings on a corporate level, which is fair. I cited that in my own blog in 2009 as well. What’s missing from this letter is how the every-day person or family will be affected and I don’t mean the line “The HST adds seven per cent to hundreds of everyday items like a cup of coffee, bicycles, home renovations and school supplies…“. What I mean is that you could say “You will be saving money on your income tax deductions. Your personal exemption has increased by $1,700, which gives you $85 in your pocket because that $1,700 would have been taxed at 5.06%. And, if you’re a person who makes under $20,000, you will receive an HST tax credit. If you’re in a family that makes less than $25,000, you’ll receive a credit, too. If you’re in this category, you need to spend $4,500 a year on items that weren’t previously taxable with PST. In addition, if you make between $20,000 and about $36,000 as an individual, you get no income tax breaks other than that $85 in your pocket and you get no HST credit, how does that make you feel?”

There are many opportunities to get people to think for themselves just by presenting all the facts in a way that people get. Let people look at their own spending and decide whether the HST works for them or not. For most, it doesn’t, I’m sure.

I really wish there was at least one side in this debate that was willing to treat the public like adults capable of making their own decisions.

Sincerely,

Dave Macdonald, CMA

  • Richard King

    Nice post Dave! I get so tired of all the posturing (and fear mongering) by all politicians. Taxes are the price we must pay to live in a free, democratic society! My goodness, countries around the world are running HUGE deficits and even HUGER debts (I mean, seriously…does anyone really think the US will be able to pay off $14 trillion in debt) and some are even on the verge of bankruptcy.
    People need to take their head out of the sand and look forward 5, 10, 25 years….we are on an unsustainable path! Last week, I read the saddest story about a small county in the US that has literally run out of money to pay its pension fund. The local fire chief who served for 25 years has not received a pension cheque since Sept 09! Even more shocking, an actuary back in 2000 warned the town council that this was going to happen; they chose to ignore his warnings.
    As far as I’m concerned, until we’re walking 5km to get dirty, well water and we can’t sleep at night for fear of muggers and rapists invading our homes….the more taxes the better!
    Pretty sure if the HST is beaten back…we’ll all pay for the lost revenue in another way.  What a huge waste of time and money…

    • http://www.yupana.ca davemacdonald

      Thanks, Richard.

      http://www.youtube.com/watch?v=9znsuCphHUU

      That’s a link to a talk on the exponential function, which basically sums up all I know about living unsustainably. If you’ve got some time, it’s worth a listen. It’s all pretty ridiculous.

      When Falcon was doing his talk, he said he couldn’t commit to whether the PST would return or there would be some unknown option. He also said that, at first, Dix wasn’t on board with the uncertainty, but now they agree there’s no way to state what the ideal option would be. All things being equal, the known “evil” is probably the better one.

  • http://www.outaouaistaxes.ca Jacques Roberge

    I totally agree with you Dave; Politics is now more and more equivalent to demagogy.  Why let a good “soundpoint” or quote be obscured by facts. You could also have added that there is no transfer of taxes from corporations to individuals inherent to the HST because in reality, corporations do not pay taxes, THEY PASS THEM ON TO THE CONSUMER VIA THEIR PRICES.  Similarly any  tax savings corporations do have with the HST will trickle down to the consumer in today’s competitve environment.

    With the 2% reduction of the HST, conditional to the HST being retained, retaining the HST should be a non-brainer. However as I mentionned in my last Examiner.com (Ottawa) column (http://shar.es/HdPXK), popular fear of new taxes may unfortunately prevail. Can’t wait to see how it finally turns out.

    I’ll soon write another column on how the BC government can get out of this mess, should the HST have to be scrapped….

    Jacques Roberge, Sales Tax Consultant http://www.outaouaistaxes.ca

  • http://www.designisphilosophy.com Morten Rand-Hendriksen

    Excellent points Dave. I think what’s needed is an HST calculator where people can plot in their spending habits and see the actual outcome before and after the HST. My prediction is most people will find little difference between the two.

    What puzzles me about the debate is that the people who are most against the HST – small businesses – are actually gaining from it. By ridding us of the complicated two-tax system running a small business has become easier. And that goes double for the businesses that sold goods that were GST exempt. It seems to me small business owners were under the impression the new HST would somehow make people stop spending money. That just isn’t the case.

    Finally, what irks me the most is the North American hate for anything that has the name “tax” associated with it. There is a reason we pay taxes. That reason is called “modern society”. Without taxes we would not have police, fire and medical services, schools, our roads would be sponsored by McDonalds and we’d spend all our money on medical insurance. 

    • http://www.yupana.ca davemacdonald

      It’s all about entitlement, Morten. Thanks for swinging by my blog.

      Just like I really suggest that people who feel they’re getting screwed assess their own spending habits, small businesses need to do the same. For those that are part of the Canadian Federation of Independent Business, they’re part of a lobby group that loves the HST and loathes the PST. For those that aren’t, they really need to do an assessment. Unfortunately, that assessment will, on the surface, just be about potentially-lost income and not about the supply chain.

      My only wish is that everyone who votes not be directed by rhetoric, but by the numbers that are relevant to them. For those that want to screw the Liberals for lying about the HST in the first place, I’m willing to bet the PST won’t be as pleasant as the last one.

      • http://www.designisphilosophy.com Morten Rand-Hendriksen

        You bring up an important point here: People might very well vote against the HST simply to prove a point. And that would be foolish to say the least. Going back to the old system at this point would be colossally expensive for the province and also for all the businesses who have already spent money converting to the new system. 

        Another thing: If I remember correctly the plan is to implement HST throughout all of Canada. The reason why BC converted earlier along side some other provinces was to get the financial bonus from the federal government. So if I understand things correctly (and I may very well be wrong here) even if the HST is overturned and we’re back to GST/PST, the HST will be reintroduced as a mandatory measure in a few years. Now that would be absolute lunacy.

        • http://www.yupana.ca davemacdonald

          More to your first point – there’s no guarantee that the PST will mirror the old PST. The Provincial Government has legislated that it will have balanced books (2015 is the target year I believe) and they *will* do that with or without the HST. Going back to the PST doesn’t mean going back to the PST we all knew – that’s been stated by Falcon and apparently challenged by Dix, but later conceded as reasonable.

  • Johnyblaze69

    There is one solution..  Remove income tax .. and apply HST to everything … and No exemptions … Simple huh …

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