BASICS Issue #20 July/Aug 2010 – by Michael Perovic
The HST is one end of a poor tax reform scheme that is being implemented by the McGuinty Liberals working with Jim Flaherty, the Finance Minister under Stephen Harper’s government. It’s a regressive tax that will nail working class people with the effect of the provincial sales tax right across a range of the goods and services we consume, as well as nailing any worker who holds a multi-employer pension.
The exact effects have been difficult to determine in advance as Premier Dalton McGuinty has not been transparent on the distributional impacts of the tax reforms, and projections depend on some presently unknown factors (such as how much of the $4.7 – 5.9 billion in savings to businesses will be passed along to consumers as the PST is converted into a “Value-Added Tax”). Even in the most optimistic scenarios many working class people and families in Ontario will lose out. There is also no reason to assume the most optimistic scenarios. While some businesses may be forced by competition to pass along their tax credit savings to consumers, many if not most, will simply pocket the added revenue.
by Jesse Benjamin - BASICS #14 (June / July 2009)
At first glance, it sounds reasonable enough. Take two sales taxes, the 5% GST and 8% PST, and combine them together into a single 13% Harmonized Sales Tax, or HST. Seems fair, doesn’t it?
Turns out, it’s a massive cash grab by the provincial government. After July 2010, working people will see an 8% increase in the cost of a whole host of goods and services that previously were not included in the PST, including gasoline, utilities, home phone, TV and internet services, hair cuts, used cars, vitamins, meals under $4, train, plane and taxi fares, and more.
Like all taxes on consumption, this will place the greatest tax burden on the working class. The province is promising to issue rebate cheques – the first of which will be issued conveniently right before the next election – but the amounts are unlikely to come even close to offsetting the additional costs. Demand of Dalton McGuinty and all Ontario provincial legislators that they stop trying to balance their budgets on the backs of the most vulnerable and hardest working people in our society!
