The Hidden Steal Tax

The most interesting thing about  the Harmonized Sales Tax (HST) controversy  is the egg laid by the Canadian Center for Policy Alternatives. The previous month another  CCPA writer  asked if  Canada was capable yet of having an  adult conversation about taxes. We  are still not sure about Canada but the CCPA  itself still has some problems  discussing taxes sensibly.

Ernie Lightman and  Andy Mitchell  came  out the latest month with a defense of the McGuinty Government’s Harmonized Sales Tax. They assured us that  the HST was not a tax grab after all.  Then somebody from the  Manitoba office of CCPA,  one Lynne Fernandez, wrote   another article refuting this. Both articles have suddenly and mysteriously vanished from  the CCPA site.  Some right wing organizations have been gleefully citing it.

The HST  in and of itself might not be too bad for impoverished people in Ontario. At least it is no worse than what we already have. But any good  Guaranteed Income/eliminate poverty for real person should understand that no regressive tax is good.  The people with the lowest income will always end up paying a higher proportion of their income in taxes.  That is why  they are so popular  with people  who have high incomes. Sales taxes are the worst kind of taxes because they are regressive, and because they are complicated to administer and open to all sorts of corruption.  Small businesses must  become tax collectors for  the government  at their own time and expense.

There is not much point in talking further to someone who cannot see something fundamentally wrong with  someone with $10 000 a year and someone with  $100 000 a year each paying 15% tax.  Worse,  such  turkeys   usually think that an exemption for   basic items  like bread or shoes makes it all right.

But as Lynne (Skye) and various  bright nimbusses have been pointing out all over the net, it is the total tax  package that is the problem.  The McGuinty government is  reducing its revenues over-all by its tax plan.  They already have a huge deficit and no option but to  increase taxes if they are  going to  pay for needed social services.

They have been talking about selling  off  government assets, meaning assets the  public paid for through their taxes, like   roads, utilities, the  Liquor  Board, even the lotteries commission. This has already created a storm of protest. So Dalton Dimwit is stuck; he  made all these tax cuts  to get  support, and now he does not have the money to run services  he is legally required to provide.  He  is caught by the economic downturn which  sharply reduced his revenues.

Many commentators have compared this fiscal plan to a fool selling off the family silver  in order to meet day to day expenses, while doing nothing  to  deal with the underlying problem except to postpone it. Maybe he thinks he will be out of office by time the consequences of this   hit home and does not care  about the situation he will leave behind. Because of the  just mentioned economic crisis, he will  get very little for all these very valuable assets.

To reiterate, the province is in this mess because they  had not the brains or backbone to shut up the “cut taxes, cut taxes, cut taxes”  type of ying-yangs. The other province which has dug itself into a similar hole, B.C., is also taking the bribe  the federal  right wing extremist government is offering;  some extra federal money for a few years if they will go along with  the harmonization with the federal GST.  No other provinces have been so utterly stupid.

In B.C. too, some  fake left commentators thought  the HST was not a bad idea. One  thought the B.C. Liberal government’s version of it was bad, but  the Ontario version was okay and  B.C.  should imitate it. They  also quickly backed off when they realized  that their real attitudes were showing.

The federal bribe involves reducing corporate taxes. This is  stupid, because our taxes are lower than the United States. We have a lot of  industries in Ontario which   operate on both sides of the border. Therefore our lower taxes end up being captured by the  American governments. As well, American businesses can take advantage of our  infrastructure and services, pay  little  for  them, and  sent the profits south.

So, the HST will not  hit  low income Ontarians right away, unless they do not file  income taxes and cannot get the rebate. Many homeless  or mentally challenged people do not. Some people just do not want the government to know where they are. They will still be paying the HST. It will start to hit in  a couple of years, or sooner if there is another  big economic  crash, and there will be. Then the  Ontario government’s revenue  collapse will force  cuts in programs that poor people depend on.

It should not be difficult to raise the revenues needed to provide the services  needed by  Ontarians, especially poor Ontarians.  For starters, they could stop giving away  natural resources for almost nothing.   Raise corporate taxes to American levels.  Raise income taxes on the wealthier, which will be a little complicated because income taxes are  tied into the federal tax system.  The point is to get the taxes off the lower income people and onto the  wealthy. Some kind of financial transactions tax would be great.  Creating a Swiss style wealth tax would be great, but difficult; the Federal government has control of direct taxes.

However, it looks like HST is going to get rammed through.  Us poor folks might as well grab our  rebates while we can. Then we work  to throw out the present federal and provincial government, replacing them with  relatively progressive alternatives; assuming we can find them.

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