slide show, available on the government's post-election
budget update website, makes the assertion that a family
of four with a $60,000 income would pay only $278 more as
a result of the implementation of the HST. No wonder the Campbell
government has little or no credibility!
23 indicates that the family currently pays $983 in "direct"
PST, i.e. the sales tax they can see on receipts for everything
they purchase over a year. It also claims that with the HST
they will pay only $1,261. A note on the side says that the
tax calculation does not reflect any cost savings to consumers
as a result of businesses no longer paying the PST, but the
government has reported that businesses will save $1.9 billion
per year. Dividing that by 4.4 million British Columbians
gives an average tax shift from business to families of $428
per person, or $1,712 for a family of four. That's just the
increase on top of the $983 that family already pays in PST,
so the HST total should be around $2,695. Why does the government
claim the HST tax increase for that family is only $278, when
simple arithmetic indicates the increase is more than six
in mind that the HST will apply to almost everything that
currently attracts only a 5% GST; home heating fuels and children's
clothing are amongst the exceptions. Some "goods"
that currently are exempted will be taxed, for example restaurant
meals and coffee at outlets like Starbucks or Tim Hortons,
and services ranging from hair cuts to funerals. The government
likes to cite a 2007 study by Michael Smart, published by
the C.D. Howe Institute, to support its claims that businesses
will pass tax savings on to consumers (even though the study's
findings on that point were statistically insignificant).
Smart's study used Statistics Canada's input-output tables.
He included a table showing that switching to the HST would
increase the tax on consumers by 85%, and that 44% of that
increase would come from taxing services which were not previously
taxed. Using Smart's table (p.
6, Table 1), the family of four would see their sales
tax increase from $983 with the PST to 1.85 times that, $1,819.
That's less than the calculation of $2,695 given above, but
it is still an increase three times greater than what the
government claims will hit that family.
have submitted a freedom of information request asking for
documents which show what assumptions were made and what calculations
were done to produce the government's claim that switching
from the PST to the HST will increase what the $60,000 family
of four pays by only $278. It could be that the family will
be able to total its receipts and report the increase before
the government responds with its calculation, but just in
case the calculation isn't a cabinet secret, it is worth asking