Chapter 3 and 4

http://www.theglobeandmail.com/news/national/bc-promises-hst-rebates-for-schools-hospitals/article1431849/

B.C. promises HST rebates for schools, hospitals

Summary:

B.C. government retreated on the new harmonized sales tax, which promised around $235 million worth of rebates to public schools and hospitals. Last summer Finance Minister Colin Hansen announced that HST will be introduced in British Columbia in July of this year which combines the 5% GST and the 7% PST. The new rebates ensure that health and education are excluded from any additional tax charge after HST is introduced; however, taxes will be granted upon serves and particular goods which currently exempt PST. Trustees warn Mr. Hansen that due to HST there will be an increase of approximately $32 million each year to education costs. The B.C. Liberals tried to lie to British Columbians about the HST and they are tremendously opposed to this tax.

Connections:

The government plays a role in the market where in this case it is collecting tax money. What the government is trying to do is generate revenue for themselves. It also relates to GDP in Canada. With the introduction of HST, the GDP will surely decrease because people will start to spend less. For businesses such as restaurants and bars, their profits generally will start decreasing because of the extra 7% consumers will have to pay on their purchases. It ties into the theory of ability to pay. Homeowners will now have to pay a larger amount of money for their property tax.


Reflection:

Personally I do not like the HST tax for various reasons and for others change is not always a positive thing. I believe 12% tax is a large percentage of tax that we have to pay. Also such privileges of dining out and shopping for clothes where one can exempt PST would be taken away from consumers and damaging to restaurants and bars. With our economy at this state, introducing HST will create a disincentive for consumers to spend money while we need people to be spending money into the market in order to stimulate the economy.