In theory, the HST makes total sense. I mean so many other places only have one tax. Why should we have two? That's more resources that we could put somewhere else.
Although, 12% is frigging high imo.

I just don't think the businesses will pass on their savings to the customer?
I mean if their cost is $5 and they sell it at $10 and then they get $2 back (from HST), so now their cost is only $3, why would they want to sell their product less then $10 when people are buying it at $10?

The HST will only work if the businesses actually pass on their savings... which I do not think will happen. I mean why would they? All they care about is the bottom line anyways. This is excellent for business, but how many of us own our own business?

It's not going to happen instantly, but with competition those extra margins businesses may suddenly get start to become thinner and thinner.

This is a long term policy. You say other factors are going to "smash down" the savings, well what do you think the prices will be with the other factors and the PST? Greater or less than the other factors with the HST?

12% is high. I read the other day that Nova Scotia is going up to 15%. I wonder how long until we follow suit.

http://www.cbc.ca/canada/nova-scotia...ns-budget.html

^we were at 14.5% 4-5 years back with gst+pst combined

Explain this to the small business owners. It doesn't really matter whether or not this leads to lower prices. If businesses absorb the savings, eventually the savings get spent on capital.

I suppose I can concede that the HST may hurt businesses that are price-sensitive in the short-term, like cheap restaurants. However, unless their inputs have been obtained questionably (i.e. under the table or on a cash basis), even they are supposed to benefit from the HST when they purchase things to sell, produce, etc.

Suits will continue to spend their 100s at your chain restaurant, while the yuppies will continue to shell out 1000s at salons, fitness centres, and so on.

I'm glad you brought this up. Inevitably, this is the biggest stumbling block for most people. They simply don't conceive that businesses will cut prices to reflect their increased margins. I see why people are trained to think that way in light of how gasoline companies handle pricing. Oil goes up? Charge more. Oil goes down? Prices stay up. That's what people witnessed and as a result they don't trust businesses.

In a situation where there is a monopoly or oligopoly (oil companies come to mind), then perhaps pricing might not come down as they can control market pricing.

However, for the Magicuts on the corner, they can't control market pricing. So if Magicuts keeps their pricing the same, keeping the HST credit, and then Great Clips reduces their pricing in light of the credit, expect Magicuts to follow suit. In the service and restaurant industry competition will dictate the price. As a result, once someone takes the lead and cuts prices, expect others to follow suit or lose clientele.

Will this happen? I can't say. But this is the theory that I think is the biggest argument in the HST discussion.

Kev

^I think it'll really depend on the item we'r talking about. Luxury items, not so much since people are will to pay premium for bragging rights. There's no incentives to lower the price. Need-based items, it should come down in price because they operating in a high volume/low margin manner.

As for gas, it IS a luxury item. People are willing to pay a premium to stay in their car, so why would oil companies bother lowering prices.

The part that I don't understand is that when NS implemented HST, it was a net decrease in tax. I can't remember what the %'s were, but they put HST in at a less total amount than the 2 combined, on a wider variety of goods.

Here's the answer BC Liberals...make it 10%...people would be cheering.

PLUS...calc'ing HST would be super easy. You would be able to know the price before going to the till.

Fuckers don't know how to introduce stuff.

^Agreed. If it's 10% or even 11%, people wont hate the HST as much.

I own my own business. I get what they are trying to do.

I only charge GST and yet pay PST on supplies.

So here is what I am going to do. I am going to take my bill, add 12% and call it a day.

Yeah, I'm going to claim all the PST that I pay, and all the GST that I pay and charge all my customers the 12%.

Guess what...so is everybody else.

The reason is simple..no one is ever going to connect the two.

That leaves the only other advantage. I'm going to be left with more money every time I file for GST. Maybe I'll be able to do more with my business with the extra money. Or I'll buy something cool. We'll see.

Kev, I did a bit of reading about the whole Atlantic provinces HST thing. One thing that doesn't get brought up so much is that the total HST was less than the GST and PST combined.

Much of the reduced costs came from the combination of a lower tax rate.

All my clients are doing the same.
Its the easiest way to manage this.

Enjoy the price hikes everyone.

The biggest hit from this tax will be on big ticket items: Houses, cars etc...

It's hard to swallow shelling out an extra 20 grand on a new Condo in tax...

I know that because of the HST I won't even look at new construction in the future when I buy. And fuck am I glad I bought my cars when I did.

Just call it what it is....
Its a luxary tax...

err. how is it a luxary tax?
when if you're rich or poor you still get charged this tax?

edit; unless you mean buying a new home?

It's less a luxury tax and more a consumption tax. Although there is a floor on things like new housing and the like.

One of the things that irritates me is that the combination into the HST is that the vehicle luxury tax is disappearing. So if anything, it's less of a luxury tax.

let say if HST is in place now. what is going to hold them back from introducing another PST-like tax?

The point of the HST is to remove cascading taxes like PST.

That would defeat the whole purpose of implementing the HST. What they could do is just increase HST in general though.

I thought NS increased the HST to 15%.

if they were to increase tax, it'll most likely in the form of a hidden tax, like the carbon tax

By applying the full HST to things where there was only one of GST or PST before, they ARE in effect increasing taxes...

since when politians are to be trusted? this minute they could tell you the purpose of HST is to elminate GST & HST, the next minute they could tell you it is time to introduce another tax on top of HST. you can also think of it this way. to increase pst, it will have to go through provincial. to increase gst, of coz, it will be the federal. however, if there is only one tax, there will only be 1 step in order to increase it. am i saying it right?

i'll definitely sign this, spread the word! i do NOT want to have to pay HST on an apartment in the future!!

How is anyone going to be able to afford anything in 5 years on a 50k (which i believe is above average) a year salary?

HST on everything (Heard they are raising the gst to 12% on purchases of used cars even though its HST exempt)
Carbon Tax - goes up soon
Hydro went up + for sure will go up
Gas will always go up
Food prices are rising
Transit is crazy $$$
Post Secondary literally costs an arm and a leg
Housing -UP
ETC ETC

Can't imagine what the credit crunch will be like in 5-10 years. Personally I have been and am still learning finances to take care of my self. Many people how ever are not, and continue to rack up debt. We are doomed.


Maybe its time to buy some rental properties?;)