Posts from — December 2009

I have been receiving a lot of mail deccrying the new harmonized sales tax that Ontario’s Liberal government is set to implement next July. It was announced last March but for some reason the “smelly brown stuff” is hitting the fan again. Seems it is going to hurt the poor, the rich and all of us in between.

Well, the truth is, it is a consumption tax which means that we are taxed on what we consume. Most economists agree that this type of tax is better than income tax because it is fairer. The more you consume, the more you pay. Supposedly, you have control over how much you buy. If you buy lots, you pay more taxes than those who don’t.

It is also called a Value Added Tax or VAT. In Norway, Sweden and Denmark, while different items are taxed at different rates, they each have a 25% VAT tax rate. I can’t help but think that this may be the reason they have universal dental care. Ontario’s rate will be a maximum of 13% which brings me to a concern I have.

In Canada, probably because we are so influenced by American business, we have developed this cultural distaste for taxes. Taxes are seen as bad. It seems no one is willing to stand up and say, “I like our tax system. We get great value for our taxes.” Our health care system, our roads, our hockey rinks all depend on us paying taxes.

How much money did you save when the Federal Conservatives cut the GST by 1%? If you are like me you probably don’t have a clue and if the truth be told you’d have to agree that it probably didn’t impact your life style. It did, however, take 6 billion dollars out of the federal coffers. One can’t help but wonder about where that money could have gone; healthcare, roads, other infrastructure, how about providing shelter and food for the homeless. Maybe it could have been set aside to help the forest industry or for some unexpected crisis like a financial meltdown.

I think it is time we got rid of the ‘taxes are bad’ attitude we have.

Oh yeah! Back to the question of tax grab or not? Well, it really comes down to whether or not it is going to better the lives of folks in Ontario. Based on my reading I think it will. So I support it.