Most of the opponents of the HST are opposed to paying seven per cent more tax on the few things that didn’t bear the PST before. They think businesses should pay for the government services they want, which doesn’t make any sense for a few reasons.
Businesses strive to earn a profit after taxes to pay out as dividends. That means the end consumer, usually the middle class, pays all the taxes levied on the company, not limited to only the old PST.
Our global competitors are all using a value added tax system. Many of the provinces have switched over and you can be guaranteed the U.S. will follow eventually. They need the money.
We owe it to our future generations to leave them with a competitive business climate because the only resources that government has comes from the private sector.
Why do people living close to the border of Alberta shop there? To beat the tax.
Why did people drive across the U.S. border to buy gas when the American dollar was higher than ours? Because it was cheaper due in large part to lower taxes.
And businesses are the same.
Guaranteed, if the old system is implemented the film production companies will move east to Ontario where they have just introduced an HST format. There’s lots of nice places there to make movies.
Companies that are less mobile will be looking to cut costs and new investment will completely overlook B.C. for a more favourable business climate.
Should there be exemptions? Absolutely.
But I find it hard to believe that people wouldn’t go out for dinner because of an extra 70 cents on a $10 meal or a $10 haircut.
If you can afford a $100 meal or hairdo maybe you can afford to pay a little more tax.
In the end there is one thing for sure, if you want to reduce taxes the only thing you can do is reduce government spending.