HST should make Ontario residents poorer, and so money would a become scarce commodity. Are we looking at deflation then?
how is HST going to influence inflation?
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Remember...it is replacing the present sales tax, and will result in less cost on some things, more on others, overall pretty much a wash. Assuming the manufacturers, etc. pass on their savings in lower product costs.
Even if they don't the effect will be pretty much minimal. Services will cost a bit more, some goods a bit less.
Not that it helps me...I don't want it, but I do think it is a better tax than the sales tax for the economy. Just wish they had left services untouched.
I don't buy for a moment that it's a wash; it's a tax grab that is going to make everyone poorer.
You believe manufacturers will pass on savings & not pocket profit in GREED= you believe in the tooth fairy. The government is no more than a greedy corporation spending a majority of time blowing money & devising ways to gouge more ................. NOT unlike banks.
Money isn't destroyed when it passes to the government. They use it to provide services like welfare (whose recipients spend every penny) and goods like roads (which employ lotsa contractors and workers) as well as employing swivel servants who buy goods and services from you and me.
Absolutely not a wash, I have first hand experience with dozens of suppliers, their costs are not dropping, ultimately the buck stops with the consumer. Forget the theory, reality is the consumer is getting f#*@ed.
HST will not cause deflation IMO, here are some of the causes according to some economists:
-decrease in the money supply
-Increase in the supply of goods
-Fall in the demand for goods
-Escalation in the demand for money
HST will not cause deflation IMO, here are some of the causes according to some economists:
-decrease in the money supply
-Increase in the supply of goods
-Fall in the demand for goods
-Escalation in the demand for money
The best thing that it does is stop sales tax evasion. If you run a small business, buying and selling goods, you can no longer buy PST exempt, and sell under the table, not charging PST. Now you have to recover the portion of HST that you spent buying, by making sure that you collect it when you sell.
I think you are WAY off. Countries that have high HST (called VAT in Europe) have huge cash economy. People evade like crazy. Cash registers rarely ring.
Come on. It's a bunch of thieves who are going to give contracts to their friends. This money is going to buy them yachts made in Europe and cocaine made in Colombia etc.
The only hope to see that money is if they spend it on SPs who in turn gonna spend it in Canada.
I don't think it will increase fuel costs. There are already both taxes on it. It only increases those things that were exempt from provincial sales tax in the past. For everything else it is just one tax instead of 2 seperate ones.
As for the argument that somehow money will disappear from the economy because retailers will not pass on the savings...that is bogus. Retailers are as much a part of the economy as anyone else. That money will continue to circulate.
The government will be losing money on the sales tax it used to charge on items where there was "value added" in the past - as now they will only collect once instead of at every step. They will gain where the tax applies to things where there was no PST in the past. Overall that may be a wash, it may be a loss to the Ontario gov't, but in the long run it puts the tax burden where it should be - on the end user, not on the businesses and individuals that are merely buying inputs to produce some output (goods).
The GST is a VAT, like the HST, and this is a much better system than sales tax which discourages value added. Whether it is a bit of a tax grad is not an issue...the Ontario gov't needs to grab some taxes somewhere to reduce its deficit, and taxes on goods and services are a better way to do it than income tax anyway.
How can their consts not be dropping? Equipment, office supplies, vehicles, fuel and repairs for vehicles will be down by 8%
... some goods and services that were not subject to the PST will be subject to the provincial portion (eight per cent) of the HST for the first time. ...
Change in Taxable Status
Electricity
Gasoline
Heating Fuels
Internet Access Fees
Personal Services (e.g., Hairstyling)
Professional Services (e.g., Legal, Accounting and Real Estate Fees and Commissions)
Tobacco
So yeah July 1st get rdy to fork out 8% more for gas...
Change in Taxable Status
Electricity
Gasoline
Heating Fuels
Internet Access Fees
Personal Services (e.g., Hairstyling)
Professional Services (e.g., Legal, Accounting and Real Estate Fees and Commissions)
Tobacco
So yeah July 1st get rdy to fork out 8% more for gas...
so let's say a hairstylist who has expences (rent etc) now needs to collect 8% more to cover these expences. That is a direct hit that is impossible to avoid. Anything on top of that can be either collected in cash and not reported or again there will be a 8% hit.
Some will presumably attempt to put it on consumer shoulders. Others will just take cash and put the honest ones out of business.
Nice picture so far.
I run a small cleaning company and I’m considering closing it down since July 1’st I have to spend +8% more on gas and other cleaning supplies and I have to also charge 8% more taxes from people who pay with cheque. So not only do I have to spend more just to keep the company going but I also have to raise my prices just to brake even…and trust me people all ready told me they are not paying more. Bad times are going to get even worse…
come to think of it, real estate may go down
this HST thing seems to be a nail in the coffin of many small businesses
Even if they do pass on their savings, it will be years in coming and won't reflect the entire amount. Not sure what items you are refering to that will be "a bit less". One item I know for sure is going to be a whole lot more is housing. Some items that were PST exempt are now going to taxed at 13%. As far as I know, this harmonized sales tax helps business, while hurting consumers, but preaching a boost to both.
I don't see HST being the leading factor to drive real estate prices down, HST only applies to new homes over $400,000 and on real estate commissions on the purchase of all homes. Granted HST on building supplies will be embedded in the price of the home. The major factor to drive down real estate will be higher interest rates coupled with low consumer confidence.
