This is a guest post from former New Westminster Voice council candidate and current Arts Council President Susan Wandell, written in response to a media release by the local organizing committee for the Initiative To End the Harmonized Sales Tax that was previously published here.
The HST has been getting a lot of press lately, mostly by those who are making political hay out of scaring misinformed people. Regardless of who said what when, the reality is the federal government will provide B.C. with transitional funding of $1.6 billion that is slated to protect vital health and education services.
In order for individuals to transition to this system, the provincial government has increased the basic personal income tax credit increase to $11,000 from $9,373, an increase of 17% which is effective January 1, 2010.
For low income families and individuals, a refundable B.C. HST Credit will be paid quarterly to offset the initial impact of the change. The amount of the credit would be $230 per family member for individuals with income up to $20,000 and families with incomes up to $25,000. The credit will benefit over 1.1 million British Columbians, and when combined with the existing low income Climate Action credit, a single individual earning $20,000 will be eligible for up to $335 in credits.
For new homebuyers, a partial rebate will ensure that new homes up to $525,000 will bear no more tax than under the current PST system, while homes above $525,000 will receive a flat rebate of about $26,250. There is no HST on previously-owned homes being re-sold.
Currently, we pay 5% GST and 7% PST. The HST combines the two taxes for one 12% tax. The HST would apply to the same goods and services as the GST with some important exceptions such as gasoline, home energy/heating, books, children’s-sized clothing and footwear, children’s car seats and car booster seats, diapers and feminine hygiene products.
All existing GST exemptions will continue to apply (i.e.; basic groceries).
Another component is that the Social Services Tax will be eliminated reducing tax from 15% to 12% on liquor served on site at restaurants and pubs.
The fact is, no one likes taxes and change is always subject to criticism, but taxes are a reality, and being well informed about what the changes are and how they affect the individual citizen is important. For example, this tax has been criticized as benefiting business at the expense of the citizenry. Indeed, this tax will benefit business, but certainly not in the lop-sided manner that critics purport that it will.
Further, when business prospers, the immediate trickle-down effect is a thriving economy and healthier communities. Stronger business communities not only stabilize local and national job markets but also expands employment and salary opportunities. Additionally, as good corporate neighbours, stable community businesses will again resume local sponsorship programs and donations to non-profits, but more importantly, the consequent increase in local corporate tax-base contributions will benefit and rejuvenate community-based services, including health and education services.
I urge every citizen to do their homework to learn about the effect of the new HST in comparison to the affect of maintaining the status-quo before making any rash determinations about the pending changes.