The HST's bitter pill might be good medicineTimes Colonist (Victoria)
Friday, April 23, 2010
Page A12
By Maclean KayUntil you live someplace, you can't get a proper feel for her passions and proclivities. So, naturally I started paying attention to the debate over the harmonized sales tax.
Coming from Alberta, I naturally sympathized with its opponents -- taxes bad! Announced just after an election, when it needed to be discussed in advance, the timing wasn't merely suspicious. It reeked. Still does.
But it didn't take long to see the issue was more complicated.
B.C. politics "enjoy" a reputation as harsh and noisy, making it hard to discern mindless rhetoric from fair comment. Many of the HST's detractors are ordinary people who think it's a bad idea. Fair enough.
But many of the loudest are the types who think Premier Gordon Campbell lies when he orders lunch. That's not a knock on the left -- they have counterparts on the other side, just as shrill and stupid. It's a knock on people who don't know what they're for, only who they hate.
Assuming the Liberals aren't evil fat cats lighting cigars with $100 bills, but actually believe this is good policy, I wanted to hear their side. They must think it's worth it to endure this, because they couldn't have handled it worse.
If that's the case, I should ask the smartest person I could find to explain it. So, I looked in the mirror.
Yes, I'm kidding. I asked a friend who can arrange such things, who he would recommend. Would a Harvard MBA economist do? Uh ... yeah. That would be fine.
Ralph Sultan, the first provincial politician I've met with a Harvard MBA, was good enough to call me and explain the benefits of the HST, slowly, using long words only when absolutely necessary. Sultan started by saying, basically, value-added taxes are the future. Most Western countries are moving this way, with the notable exception of the United States. Simpler and cheaper overall, they're much loved by economists.
Currently, consumers are hit by several layers of provincial sales tax before the product or service appears in front of them, especially in sectors like manufacturing. This accumulates, driving the costs of business up. You're paying those taxes now, you just aren't seeing them.
The HST has the benefit of being visible. That I can appreciate.
I asked Sultan how British Columbians can be expected to support what is, to most, a bigger tax on more items.
"Let's start with jobs," he said. No matter how much this isn't fun to hear, the companies people work for have to do well, or they either fold or leave. Neither of those is good for the province, and the multi-tiered tax system makes B.C. less attractive to do business in.
Yes, the "annoyance factor" will be there. Some things will be more expensive. But the cost of business will go down, encouraging reinvestment in industries not doing well, such as forestry.
As someone who wasn't here in the awful 1990s, but pointing and laughing from Alberta (now doing the same in reverse), I can appreciate that, too.
Policy aside, Sultan has been one of his own government's harshest critics of the timing and delivery. He's right -- the delivery was borderline incompetent, and incomprehensibly slow to muster a response to the storm of opposition. That doesn't inspire confidence, which the Opposition MLAs have exploited. As they should.
Sultan made good points, I had to admit. I enjoyed the chance to pick his brain. Too often, we decry politicians for swaying with the polls and playing it safe.
Nothing is irreversible -- the Liberals are clearly and openly gambling that by the next election, voters will have seen the benefits and calmed down.
The federal Liberals vowed to repeal the hated GST, but found it made too much sense and kept it. Sultan says it will be the same here -- bitter pill, good medicine.
But man, was that timing ever horrible.
macleankay@shaw.ca
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Topic: Fight The HST! (Read 172817 times)