Regressive Harmonized Sales Tax creating disharmony

The Harmonized Sales Tax has certainly not lived up to its billing, disharmonizing rather than harmonizing. And it's no wonder.

The HST being proposed in BC is not solely harmonizing the GST and the PST. In fact, it would seem its chief aim is to expand the PST, not harmonize the already existing provincial tax with the federal one.

To announce this new tax in the middle of a recession shows how unconcerned the Conservatives and BC Liberals are by the more unfortunate members of Canadian society. How? Well, it's evident that it's going to hit harder in the middle of a recession than it would otherwise.

But what's more is that the HST, like all sales taxes, is regressive. That means that the percent of one's income that is used to pay the tax is greater the lower your income bracket.

This tax could be seen as being an artificial way of reducing provincial deficits. But it's worse than that. It is creating a greater economic divide between Canadians.

Not to mention an ever decreasing trust of politicians who promise one thing, and deliver another.

Recommend this Post at Progressive Bloggers If you liked this post, please vote for my blog at Canadian Blogosphere

And Stephen Harper's an economist? Make that libertarian or anarchist

I'm sure all readers have heard or read the Harper comments on taxes. What I wondered when I saw these comments was how Stephen Harper could claim to be an economist. How could any economist say that no taxes are good taxes? It doesn't stand to reason, and the inevitable conclusion is that Stephen Harper is a libertarian at best, an anarchist at worst.

As Jeffrey Simpson puts it in his column today:

"There is no “school,” to use Stephen Harper's word, anywhere in economics that says “no taxes are good taxes.” Not even Milton Friedman and the Chicago school think that. Nor do Mr. Harper's former mentors at the University of Calgary."

The problem is that through his actions, Harper seems to be putting into action the ideology his comment professes. Cutting the GST, for instance, whose negative repercussions can be detected in the ever-growing deficit being run by Ottawa.

On the topic of the deficit, Harper must realize that taxes would help to pull the government out of the red. In fact, he probably resents that truth.

I doubt these comments show that Harper is losing control. It is much more likely that this either pandering to his base, as an election in the fall is a real possibility, or under pressure, he uttered what he actually believes. Either option is concerning.

He either believes something no one else in his academic field does, or he's willing to go to any lengths, no matter any measure of economic integrity he may possess. Scary indeed, Jeffrey Simpson.

Recommend this Post at Progressive Bloggers If you liked this post, please vote for my blog at Canadian Blogosphere

Why we should be paying more taxes

One of the reasons that we have been led to these deficits is the Conservative cuts to the GST. With this in mind, Robert Smol's article on CBC.ca Why I should be paying more taxes proclaims a truth that many politicians do not want to face. Instead of lowering taxes, if anything they should be raised.

Simply a great article.

Recommend this Post at Progressive Bloggers If you liked this post, please vote for my blog at Canadian Blogosphere

Harper refusing to follow Obama's lead on re-establishing equality

In the run-up to international summits, Harper has been offering interviews to the US media, and yesterday in an interview with Fox News he insisted that he will not follow Barack Obama's lead by raising taxes.

Obama has devised a plan to produce revenue by taxing wealthy Americans and some select businesses. The plan seeks to provide the government with much needed revenue while also keeping in mind the difficult financial situations that common Americans find themselves in. The plan would seem to be perfect: it provides revenue when it is direly needed, and it taxes those that can afford to be taxed.

Harper argues that "[there] is no need in Canada to raise taxes" because we will have a surplus once this economic crisis blows over. He further asserts that the worst of the crisis will be over soon. However, what happens if the economic downturn lasts longer than our all-knowing Prime Minister and prophet predicts? His record with these predictions isn't too good after all. He told us there would be no need for a deficit, that we would easily weather this slight blip in our economy. So, sorry Stephen, but forgive us if we don't trust you much.

The plan put forward by Obama deals with this problem, ensuring revenue during difficult economic times. Moreover, the plan also addresses the great inequalities that have developed in our countries.

The earnings of Canadians have all remained steady or decreased since 1980, except for those among the richest 20% of Canadians. Their earnings have grown 16.4% during this period, while their polar opposites have seen their incomes shrink by 20.6%. Incomes in the middle have remained similar.

So this is not only an intelligent way of guaranteeing government revenue during the recession. Obama is using the recession as an opportunity to restore some equality to the socio-economic structure of his nation, which has been following the same trend as ours. Harper, on the other hand, is failing to take an opportunity to provide extra revenue to the government and to restore at least some equity to the socio-economic makeup of this country.

Don't worry, I've heard all those who will maintain that taxing at this time is the wrong thing to do; that it will hinder economic growth in a period when we need it the most. But as you usually are, you're harping on without looking at the facts. To establish whether or not a tax is an economic hindrance, you have to look at who's being taxed. In this case, it is the rich, and they have money to spare.

Taking some more money from the rich will not hurt them or the economy, and will provide a helping hand to those who need it most. The US government will have a new source of revenue and will be able to provide some social justice to its citizens, while from the north we lament our leaders for passing up on this wonderful opportunity to restore some equality and greater financial viability to Canada.

Recommend this Post at Progressive Bloggers If you liked this post, please vote for my blog at Canadian Blogosphere