The commercial/retail pay property tax. They help pay for our transit. And they need customers.
A retail sales tax is a regressive system which penalizes the poor the most. You do not want that in Toronto.
And just like the US you would see a catering of retail in a 0% location...Mississauga. So Toronto would lose a huge amount of new retail development.
I always feel the need to challenge the argument that a sales tax is or must be 'regressive'.
In Toronto, ON, Canada, looking at the HST.....
The tax does not apply to basic grocery, nor to residential rent, nor children's clothes, amongst other exceptions.
These together account for about 70% of what a low, or lower-middle income earner would spend in after-tax dollars.
On top of that, if you earn less than about $34,000 or so, you get a rebate equal to around $500, as a single person, more if you have kids, which in essence entirely refunds any HST you would have paid, and probably a bit extra on top.
Its regressive in the sense that it isn't a tiered-bracket system; but in truth the poor are substantially exempt from paying this tax as are most lower-middle income earners.
***
With respect to charging this tax, as a municipal tax, it would be best to do it province-wide, with the second choice being regionally, with the entire GTHA charging it, rather than the City alone.
That said, a 1% difference is unlikely to have a massive impact on Toronto-based retail.
There is no Norstrom or Sak's in York Region, or Durham, or Halton for that matter.
There is no one driving an hour each way to do their groceries, which are largely sales-tax exempt anyway.
Where it would have an effect is on border roads, where shifting to other side of the street would save you 1%, a concern yes, but not inevitable disaster.
