Friday, May 01, 2009

Fat Cats to Fat Asses: The Harmonized Sales Tax in Ontario

"[T]he tax reforms that will take effect July 1, 2010 are the single most important thing we can do to strengthen our economy."
That's according to Ontario Premier Dalton McGuinty, and by extension his secret harmonized sales tax partners Federal Finance Minister Jim Flaherty and Prime Minister Stephen Harper, as quoted in the Toronto Star (Robert Benzie, 27 April 2009).

Paying more taxes will help people spend on necessities and wants, eh? That's a new one. Usually Flaherty and Harper go on and on about how the best way to help businesses and the economy is to lower taxes. Did they have a change of heart and start lovin' higher taxes? Or was it spending their way through Canada's enormous surpluses like drunken sailors that did the trick? It's obvious why McGuinty loves taxing the people more -- he's done it before, without impunity, so he figures he can do it again. After all if he can create a health tax after signing a public pledge not to raise taxes and then get elected again with a majority, why can't he raise sales taxes with the same result?

His backbenchers are not so sure he's Teflon Jean II. This time it's not just one tax not every Ontarian pays, but effectively many, many taxes that will hit every single Ontarian and the blind and poor hardest. When you pay your hydro bill, you'll pay more. When you buy food, you'll pay more. When you pay your accountant at tax time, you'll pay more. In fact, an accountant is almost de rigeur now with Canada's and Ontario's taxes being so byzantine. Apparently McGuinty is confident that working families being exempt from paying taxes on diapers will help sell it. Right. That will really make those many, many Ontarians who don't buy or need diapers for kids happy (and what about incontinent adults, will they get an exemption?). Well, McGuinty fires again, the new harmonized PST and GST taxes will not be put on books, but neither will the GST be taken off the books as promised by Jean Chretien's former Liberal government nor will audio books for the blind be exempt. That's so mean, it drops one's jaw.

McGuinty has another bribe up his sleeve: income tax cuts. It's a great thing for everyone, but the poor will still have to put more of their fixed incomes towards taxes and less to heat and food. I see a McGuinty/Harper theme happening here: hit the disabled and the poor the hardest because they're usually too busy trying to survive to protest. Fortunately, the public in general are pissed off about their recession-hit incomes being eroded further with taxes that'll be implemented just as they'll be getting ready to spend again. They see the truth: government fat cats have become fat asses.

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