Opinion

PST was a dumb idea in 1949 and still is in 2011

One of the joys of living in British Columbia is learning to expect the unexpected: the HST, for example.

Nobody mentioned it in the 2009 election campaign - except the B.C. Conservatives, who didn’t win any seats, and they only promised to investigate the idea.

Two months later, the newly re-elected B.C. Liberal government brings in the HST, without so much as a word of discussion. Taxpayers are instructed, ordered, in fact, to make whatever cuts we need to make in our household budgets to find the extra $300 to $400 a year needed to pay the tax.

No wonder 700,000 people signed a protest petition.

But now that public outrage has triggered the Premier’s resignation and we’re heading to a referendum vote, we need to make sure we don’t create more nasty surprises for ourselves. That’s why the Canadian Taxpayers Federation is urging everybody to vote no.

If we vote yes in the referendum, then we’re no longer just sending the Premier a message, he’s gone. A yes vote will reinstate the provincial sales tax, the old Social Services Tax of 1949, in its original form. When the PST was introduced in 1949, organized labour and the NDP (ok, the CCF – same crew) fought the tax tooth and nail, saying it would be bad for the economy, raise prices and hurt consumers. They were right.

It was a bad idea in 1949, and it’s a crazy idea in 2011. Here are two reasons why:

• The PST adds seven per cent to the cost of machinery, equipment and supplies, making B.C. a dumb place to build a mill, a mine or a factory, and a dumb place to keep one open, if you’re trying to figure out whether to keep jobs here, and not move them to China, India or Alberta. This was a small problem in 1949; it’s a great big problem in 2011.

• The PST is a completely separate tax system, so the B.C. government would need to rehire a separate set of tax collectors at a cost of $30 million a year and B.C. taxpayers would need to spend $150 million a year filling out a separate set of forms, following a separate set of rules and regulations, and sending a separate set of cheques to Victoria. How stupid is that? If we buy into the argument that having two separate taxes, with two separate tax collectors and two different rules is better than having one tax with one set of collectors and rules, then why stop there? Why not keep splitting up the HST into three, four or five different sales taxes with different rules and collectors for each one of them? Nobody would vote for that type of system and that’s why we shouldn’t embrace a return to two separate sales taxes in B.C.

Nobody’s saying the HST is perfect. When the B.C. government brought the HST to B.C., they also created an expensive laundry list of exemptions, credits and rebates – special favours for special interests.

The Canadian Taxpayers Federation is urging every B.C. politician who wants to be Premier, regardless of party affiliation, to lower and simplify the HST. Cut the rate from 7 to 5 per cent and put some money back in the pockets of working families.

Then we can leave the old job-killing PST buried in the history books, where it belongs.

-Editor's note: Column author Gregory Thomas is a spokesman for the Canadian Taxpayers Federation. Black Press columnist Tom Fletcher is on holidays for this week.

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