Wednesday, September 30, 2009

Harmonized tax to hit consumers hard.

Well golly gee at 77 I am so glad that diapers will be exempted from the new tax. Oh right I may end up wearing them forgot that! Anyway it is the Conservatives that are supposed to always be supporting business at the expense of the consumer but BC. and Ontario are both Liberal governments. Lets face it the business lobby is just more powerful than any consumer lobby and are able to get the ear of governments Liberal or Conservative. While businesses save 6.9 billion by the change consumers are gifted with a 1.5 percentage point increase on consumption tax at a time when many consumers are already reeling the effects of the recession.

Harmonized tax to hit consumers hard

Karen Howlett and Ian Bailey
Toronto and Vancouver — From Saturday's Globe and Mail
Consumers will bear the brunt of proposed tax changes in Ontario and British Columbia while businesses reap windfall savings of $6.9-billion, a new report says.
For the first time, economists have put a price tag on the value-added taxes the two provinces plan to introduce July 1, showing that the tax rate on consumption will jump 1.5 percentage points for consumers.
The report prepared by economists at Toronto-Dominion Bank could have caused a political headache in Ontario for Premier Dalton McGuinty. But the impact of its release Friday was somewhat blunted, having come one day after the Liberals sailed to victory in a by-election in the Toronto riding of St. Paul's, despite attempts by opposition candidates to turn the race into a referendum on the harmonized sales tax.
Ontario New Democrat Leader Andrea Horwath called the timing “awfully fishy.” A spokesman for Revenue Minister John Wilkinson said he was pleased with the report, regardless of the timing.
“It's probably the first time that people from the left, the right, the middle – people from all political persuasions have come together, as well as labour and business and seniors and students,” Mr. Vander Zalm said in an interview Friday.
Once the provinces combine their PST with the GST, the new tax will be 13 per cent in Ontario and 12 per cent in B.C.
Businesses will reap huge savings because they will be able to claim rebates. But consumers will end up paying the new tax on goods and services that are currently exempt from any tax. Both provinces have attempted to take the sting out of harmonization by exempting goods such as diapers.

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