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Harmonized Sales Tax

S

spider

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I am surprised that no one seems interested in the HST proposal that Mr. McGuinty is ready to impose on us.

The initial read on this proposal means more tax money for the province and less money for you and I. Is there one advantage here for the taxpayer, I doubt it.

Currently, a manufacturer or retailers purchases are PST exempt but not GST exempt, what happens here in the harmonization process?

I run a small mail order/manufacturing business selling worldwide but my annual sales are below $30,000 which allows me to sell GST free. PST is charged and remitted on Ontario sales but I don't collect PST and GST on sales in other provinces or outside of Canada. Will this change?

Just another tax grab.
 
spider, it's much bigger than you or a few million dollars in marginal tax revenue. Harmonization will help our manufacturing and export sectors by eliminating additional tax at each step in the value chain. As you noted, exports are GST exempt, and harmonization would make them PST exempt.

In other words, don't bitch about the GST. It's a great tax. If you have to pay tax, you want to pay that one and not income taxes, property taxes, etc.
 
Excellent idea! It would be a lot easier to deal with 2 taxes schemes than one. And as GST is on services as well, while PST is only on goods, then to be revenue neutral, the Ontario portion would be reduced. Anyone remember how much the Newfoundland, New Brunswick, and Nova Scotia rates were reduced when they harmonized?
 
Harmonization is Good...but

While harmonization of the PST & GST is an excellent idea; one that really helps are manufacturing sector and is only 20 years past due......

It needs to be said, that far from a tax grab; the harmonization is a money-loser for the Provincial Treasury.

The gain from taxing services (ie. your hair cut, or the plumber's labour) is far less than the loss from not taxing goods which go into business inputs.

So no rate reduction can be expected.

What you get out of this as an Ontario Citizen is:

A) more competitive businesses which will create or preserve more jobs
B) you may see marginally lower prices on some manufactured goods; and/or more profits from Canadians businesses you own shares in directly, or through mutual funds.
C) You will likely seen an enriched Sales Tax Credit...the PST one is very low and very few qualify for it. Its likely that when Merged into the HST the credit will be given all the same people who qualify for the GST credit, and will likely be a bit richer.

Any deal to harmonize the tax will be contingent on Federal support, as was the case w/Quebec and Atantic Canada. The Feds usually offered to cover any revenue shortfall for the first 2-3 years after implementation. That could be over 2B in the case of Ontario.

***

I can't recall for certain the tax reductions in Atlantic Canada, but on think, on average they were on the order of two percentage points....

Quebec did not reduce its QST rate at all, and in fact has increased it to 9% since.
 
It's a great idea for sure. My only doubt is over how they would address the impact on our financial sector in Ontario. Harmonization would be a big hit and make relocation to Calgary that much more tempting.
 
kEiThZ said:
It's a great idea for sure. My only doubt is over how they would address the impact on our financial sector in Ontario. Harmonization would be a big hit and make relocation to Calgary that much more tempting.
Click to expand...

Our incredibly uncompetitive corporate tax rates would do more to incent relocation than introducing sales tax.
 
Dalton is an @$$hole. This means that new homeowners will pay way more on tax. On citynews it said it would be $47,000 more on a $300,000 house.

http://www.citynews.ca/news/news_32809.aspx

Code: 
On a Single           Current tax      New Tax          Tax Increase
    Detached House
    -------------------------------------------------------------------------
    Toronto               $49,895          $96,571          $46,676
    -------------------------------------------------------------------------
    Vaughan               $32,156          $59,292          $27,136
    -------------------------------------------------------------------------
    Mississauga           $27,583          $52,149          $24,566
    -------------------------------------------------------------------------
    Hamilton              $17,642          $33,855          $16,213
    -------------------------------------------------------------------------
    London                $15,128          $27,202          $12,074
    -------------------------------------------------------------------------
    Ottawa                $21,048          $38,097          $17,049
    -------------------------------------------------------------------------
    Sudbury               $15,295          $28,339          $13,044
    -------------------------------------------------------------------------
    Waterloo              $16,684          $31,651          $14,967
    -------------------------------------------------------------------------
    Windsor               $11,694          $20,651          $8,957
 
kennyx said:
Dalton is an @$$hole. This means that new homeowners will pay way more on tax. On citynews it said it would be $47,000 more on a $300,000 house.
Click to expand...

There are ways around specific issues like higher taxes on homes. The province could easily offer a rebate for housing.
 
kennyx said:
Dalton is an @$$hole. This means that new homeowners will pay way more on tax. On citynews it said it would be $47,000 more on a $300,000 house.

http://www.citynews.ca/news/news_32809.aspx

Code: 
On a Single           Current tax      New Tax          Tax Increase
    Detached House
    -------------------------------------------------------------------------
    Toronto               $49,895          $96,571          $46,676
    -------------------------------------------------------------------------
    Vaughan               $32,156          $59,292          $27,136
    -------------------------------------------------------------------------
    Mississauga           $27,583          $52,149          $24,566
    -------------------------------------------------------------------------
    Hamilton              $17,642          $33,855          $16,213
    -------------------------------------------------------------------------
    London                $15,128          $27,202          $12,074
    -------------------------------------------------------------------------
    Ottawa                $21,048          $38,097          $17,049
    -------------------------------------------------------------------------
    Sudbury               $15,295          $28,339          $13,044
    -------------------------------------------------------------------------
    Waterloo              $16,684          $31,651          $14,967
    -------------------------------------------------------------------------
    Windsor               $11,694          $20,651          $8,957
Click to expand...


^
*sigh*


You're right, let's raise your income taxes instead. It's one thing to complain about the level of taxation, but we should at least be able to agree that whatever taxes we do pay should not be either too unfair (regressive), or too economically damaging. Value Added Taxes do the latter well, and have well-proven workarounds for the former. Given the alternatives (corporate income tax, personal income tax, property tax, capital gains, etc.), it's a good bet.
 
The case for HST is purported to be made here.

http://taxharmonization.on.ca/facts2.html

Ho Hum, more sweeping generalizations such as it will be easier for business to administer. ---- Not so, business will have to administer the new HST routine for some transactions and the current system for others. That is not less work it is twice as much.

Or how about products will be cheaper because the manufacturer won't have to pay tax on his supplies. Hello----- He doesn't pay them now, the PST is exempt on his purchases and he draws back the GST he pays on those supplies.
 
At least all the new infrastructure planned over the next decades will be slightly closer to being paid off.
Click to expand...


I do know If I feel like crying after reading that or shooting myself...

Happy over tax increases.
 
The HST (13%) is administered in Nova Scotia, New Brunswick, and Newfoundland and Labrador, by the Canadian government. Québec administers both the GST and QST in that province (The GST is calculated on the selling price at the rate of 5%, the QST is calculated on the selling price, including the GST, at the rate of 7.5%).
Currently, the Canadian government administers the GST (5%) and the Ontario government administers the OST (8%).
If Ontario administers both the GST and OST, it could make adjustments on how it is administered. It could do what Québec does, or create its own version of a HST using different rates for the provincial portion.
 
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