Quote:
Originally Posted by kyuusei
Because the HST will apply to everything, including stuff that was GST-only before. Food, coffee, services, books, children's clothing, etc.
It's already pretty expensive to live here, so no wonder people are mad.
I buy what I can when in Calgary (or some states, like Oregon), but it's not like I can go to either very often.
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The HST is a good policy on the whole, as it allows businesses to claim the PST paid on goods as a rebate, whereas before you had to expense these costs. The biggest sector that will benefit from this is the small and medium size busineses. These companies can now claim an additional 7% back on all purchases which can be used to hire more staff or lower prices. This allows consumers to pay less for the same goods, which will allow them to save more or purchase more items. With more purchases, businesses make a higher profit, which allows them to put more money back into the economy, and the cycle continues.
Yes some sectors will not benefit, such as restaurants and real estate development (which I am employed in). It will probably hurt our bottom line by about 2%. It's not ideal, but when you see how much good it does for the province, I'll take it. The province itself also gets windfall of cash from the Federal government. When you do the straight math on the HST, the province of BC benefits immensley from it.
There are some items that will now be subject to 12% tax that formerly was only 5%. The base cost of these items should go down though, as those business are able to claim the 7% PST portion of the HST now. So an item that was $100 + 5 GST totalling $105 could in theory be available for $95 + 11.40 HST totalling 106.40.
Some items are still HST exempt, such as gas, books, childrens' clothes and shoes, diapers, feminine hygiene products, basic groceries, rent and perscription drugs, so pretty much everything from kyuusei's list will still not have PST charged on it. Low income families and individuals will also receive a $230 yearly credit to offset some increased costs. A rebate will be set up to ensure there is no increase to the cost of heat or power.
People are getting worked up thinking the HST is going to bankrupt them all and there are so many purchases they will make that will now have another 7% tax added on. In reality, almost everything in BC already has PST and GST totalling 12% anyways.
