Harmonized Means Putting on the Rubber Gloves

The British Columbia provincial government, soon to be followed by Ontario, will harmonize the GST with its provincial sales tax.

That means in BC, consumers will pay 7%PST, plus 5% GST on ALL purchases. That word ALL is important because, previously a number of purchases were exempt from either GST or PST.

Now everything will be subjected to the 12% tax. Some examples:

A new house lists for $400,000. GST of about 5% or $20,000 is applied, but there is an adjustment bringing the GST down to about $8,000. Previously there was no PST. Not any more! Now a combined GST and PST of 12% will apply. That is $48,000 before the GST credit!!

Last year you bought a used car from your neighbor for $10,000. You had to pay the 7% PST, but the sale of a car from a private owner to another was not considered a commercial transaction, so you didn't pay GST. Not any more! Now, you get to pay GST! But is the odd thing. Your neighbor bought the car 5 years for $20,000 from a dealer and paid $1,000 in GST. Since your neighbor is NOT the final consumer of the car, and has sold it to you for $10,000 then why does your neighbor not get the $1,000 he paid, returned as a GST input tax credit!!!

From my perspective the harmonized GST and PST will decimate the restaurant business here in BC. If an item on the menu reads $20.00, you will be paying near $30.00 by the time taxes and tip are included. A $6.50 drink actually sells for $10.00. There is simply, no value in eating out.

There are a number of professional fees that will now have to charge PST. Accounting, real estate etc.

Will taxpayers get some benefit from the additional taxation. Absolutely not. The new taxes will simply pay for improved pension plans, more sick days and fewer hours working for B.C. public servants. The harmonized tax is simply a way to use legislation to extort money from main street.