My name is Adam, and I live in Northern Ontario, Canada. Last year our provincial government launched a campaign to establish the HST (Harmonized Sales Tax) — this would combine the PST (Provincial Sales Tax) and GST (Goods and Services Tax) that we have right now.
In a vote launched last year, each household was given one ballot. In the paperwork included with the ballot, it was stated that, if HST were to go live, each household would get up to $1000 every year for three consecutive years as tax relief. What a lot of people failed to read was the up to portion.
The HST has passed and will go live as of July 1st, 2010. When this happens, for example, fresh foods previously taxed at 8% will be 13% — as if fruits and vegetables weren’t already expensive enough!
As far as the up to $1000 every three years part of the deal… well, I’ll get $100 in July and then another $100 in September. Apparently, the money you get is based off of your income. According to the government, if you make a lot of money, then you can afford to spend a bit more when shopping.
I decided to go a little deeper and investigate what else this will affect. If you were to sell your house through a realtor, HST will apply to the sale. So let’s say you turn around and sell your house for a low price of $200,000. HST on that house through a realtor will make the final price $226,000. Now, you have two choices here. You can sell the house for $200,000 and take a loss of $26,000 as the realtor will want that much for the HST. Or you can list it as $226,000 and, when it’s sold, have the realtor write up a receipt for $200,000. Here’s the problem: do you know of a bank that will secure a mortgage on a house for more than what the house is worth? I certainly don’t. This will, in turn, make listing houses in realtor markets a very difficult thing to do — because if you sell your house privately, the HST does not apply!
Personally I think they need to do away with PST, GST, and HST… and create what I like to call a consumption tax. Let’s say your gross pay at work is $1000, bi-weekly. Well after the greedy government gets its hands in there with the income taxes and takes a good solid chunk of that, you are left with, let’s say, about $800 to take home. Well with the consumption tax, you’d gross $1000 bi-weekly and take home $1000. You wouldn’t be taxed until you make a purchase with that money. Even if such a tax were in the 15% to 20% range, an individual would be more in control of how much they’d be taxed based on purchases made at their discretion. People who stick to the bare essentials will reasonably retain more of their income than those who like to buy a lot of luxury items.
Just a thought. Let me know what you think.
As mentioned above, my name is Adam, and I live in Northern Ontario. I work for a company called Ontera, where I troubleshoot Internet, phones, and data circuits, and I work on the network abuse team helping to protect our network from viruses and other issues. I also make movies on YouTube, which can be seen here. I like to engineer things to make life easier.