Shady Grove Nostalgia and Taxes

More nostalgia from the Shady Grove era, these photos taken on the upper floor of the converted chicken barn.

Yesterday, with finance minister Colin Hansen at his side, our premier Gordon Campbell gave a beaming performance as he announced his excitement that BC would now be participating in a Harmonized Sales Tax (HST) replacing the present GST and PST. If you are not following this, what it means is that you will no longer be charged two separate taxes at 5% and 7%, but one tax at 12%. It sounds harmless and even presents the possibility that there will be less paperwork and administration in collecting the tax. Naturally, I assessed what it would do to my business and how it would impact my cost of living.

There are many products that are charged both taxes, but there are also many services that are only charged the GST which is 5%. I am in a service industry so the bulk of the invoice I write to my customer is labour, which is subject to GST only. Now everything that is taxed will be taxed both taxes. In other words, the tax that I charge to my customers just went up 140%! This is just unbelievable. For arguments sake, let us say that the average client hires me for a job worth $3000.00 in labour and I do $100,000.00 in business in a given year. I will be collecting, for the government $12,000.00 in taxes where now I only collect $5000.00 This will also apply to restaurant meals, haircuts, appliance repairs, vehicle repairs and servicing, etc. Mr. Campbell had the unmitigated audacity and gall to state matter of factly that this tax will be revenue neutral. How can you tell when a politician is lying? When he moves his lips.

I know what will happen because I remember all too well when the GST was first introduced. Many of my customers refused to pay the new tax. I had to 'swallow' it. That will happen again. The other thing that happened and is still happening is that the customer will offer cash with no paperwork, under the table. Every self employed tradesman will testify to the fact they face this temptation on a regular basis and it is, for many of them, too tempting to pass up. More underground economy results in a net loss to the government, but this is what inevitably happens when the citizens are being taxed to death. For many, it is a matter of survival. The HST will have an overall detrimental effect on the economy and should be vehemently opposed before it comes into effect.