HST math

Last week we were treated to the provincial government unveiling its plan to offer a big enough financial incentive - aka bribe - to get British Columbians to back the HST in the upcoming referendum.

Last week we were treated to the provincial government unveiling its plan to offer a big enough financial incentive – aka bribe – to get British Columbians to back the HST in the upcoming referendum.

That included the HST being reduced by one per cent on July 1 next year (the earliest that can be done under the original HST deal with the federal government) and a further one per cent on July 1, 2014.

Families with children would get a right now one-time payment of $175 per child.

Now for a couple with two kids, that promise translates to $350 for the year.

Given an independent study says that’s exactly how much extra the average family is paying under this supposedly “revenue neutral” tax regime, that’s a break even for that family.

Except, as mentioned, the $175 is a one-time payment. So the break even is only for the first year.

Given the government’s two step on the HST reduction, it seems reasonable to conclude that the first one per cent cut halves the extra that family is having to pay because of the HST and the second reduction will wipe it out.

So our family breaks even on the first year but, in the absence of that cheque in the second year, it comes out on the wrong side by $175 in year two.

And year three.

In other words this family is expected to vote for the HST because they only get dinged $350 under the new family-friendly plan instead of $700.

Such a deal.

If you don’t happen to have a couple of kids running about the place, presumably the HST hit is less than $350 a year.

But at the same time you get no one-time relief  you get no relief so will be out of pocket for each of the next three years.

Sadly, in the end it matters not a jot how the HST vote goes because we know full well the government can always recover lost revenues by simply jamming up all manner of fees we are required to pay.

Malcolm Baxter

PS: Isn’t is strange that the Liberals’ proposal to finance part of the HST cuts through an increase in the corporate tax rate has been greeted by the corporate sector with deafening silence?


Seems to suggest the amount by which they benefit from HST is more than that tax bump.


Northern Sentinel

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