From an English assignment we had to right a persuasive essay for a “case for” or “case against.” I decided to write on the HST because as a student, and will be soon tax-payer, I wanted to know more about the tax that everyone seems to be downing. So far there has been no #winning here. Even though the new BC Government is looking to faze out the tax, I wish people would really understand that taxes are inevitable as members of society and that despite all the hatred, the HST was good for our economy.
As indicated by the B.C. Federation of Labour, “the HST is a tax shift that moves the tax burden from corporations to individuals at a time when most workers have seen their salaries stagnate over the last two decades” (BCFed). Since its release the HST has been heavily debated. There has been “much public discontent due to misinformation being spread by those who oppose the reform and want to derail it” (Lammam and Veldhuis). Opponents of the tax believe the HST will take advantage of low-income earners, as well as benefit the business sector instead of everyday consumers as the province recovers from a heavy recession. What these opponents fail to see are the hard facts behind the tax as many are relying on poor research and anecdotes to fuel their anti-HST positions (Veldhuis and Lammam p. 31). Although opposition in BC has reached 85% (Zalm), the provincial government has made the right move for the prosperity of British Columbia in the long run.
Contrary to popular belief, the HST is not set up to take advantage of low-income earners, but rather skewed towards higher-income families (Lammam and Veldhuis). In fact, low to mid-income earners in BC will actually see a decrease in their total tax bill (Veldhuis). For example, “families with incomes between $20,000 and $40,000 in 2011 will see an average tax reduction of $411” (Veldhuis) and “families with incomes between $40,000 and $60,000 will see their total tax bill decrease by an average of $159” (Veldhuis). Additionally, the new HST credit will help to further alleviate the burden of tax proportionally across lower income families (Veldhuis and Lammam p. 31) by “increasing the basic personal tax exemption to $11,000” (Veldhuis). BC upper income families will not even see a drastic difference in their current taxation as the HST will only raise their tax rates at an average “increase of just 0.3 per cent” (Veldhuis).
Many critics have suggested that the HST will help industry and not the average British Columbian, however this is a myth. The HST will benefit BC consumers in the long run by creating a more competitive environment for investment (Veldhuis and Lammam p. 32) in the province of BC, generating spillover effects into productivity and job opportunities for ordinary BC residents. From analyzing the old tax system it can be seen that the PST only penalized productivity, rather than fostering it. Before, all business inputs were subject to PST taxation creating higher prices that were passed on to consumers (Lammam and Veldhuis p. 23). Under the HST “all business inputs are exempt from the HST” (Lammam and Veldhuis p. 24) encouraging business investment in BC due to the reduction in tax penalties (Veldhuis and Lammam p. 32). This investment boosts both in equipment and machinery will result in “increases in productivity, wages, and job opportunities” (Lammam and Veldhuis p. 24). With an increase in the production of goods and no taxes on business inputs, overall consumer prices will fall as was witnessed in Atlantic Canada after the 1997 HST reforms (Lammam and Veldhuis). Therefore British Columbians will gain more, rather then lose as wages rise and prices fall due to the positive HST effects on BC business.
There are many reasons why the HST is beneficial for British Columbians, and not a threat. Over the next 10 years Jack Mintz estimates a net increase of 113,00 jobs in BC (Lammam and Veldhuis p. 24). As well, “BC taxpayers will save another $30 million annually in government administration costs” (Veldhuis and Lammam p. 31). Rather than focusing on the label of a new tax, opponents need to look at the actual magnitude of the effects that the tax will have both in the short term and in the long term. Many challengers of the HST need to realize that although “the burden of all taxes ultimately falls on people” (Lammam and Veldhuis p. 24), this new harmonized tax will have more positive impacts then negative on British Columbians as the provincial economy moves forward. Lower income families will benefit more from the HST rather than lose, both through direct taxation reduction and the spillover effects in the business sector. Most importantly, the HST will help BC’s economy to quickly recover from the recession (Veldhuis and Lammam p. 31), as no taxes for businesses will make the province a more attractive place for investment, benefiting the residents of BC.