August 24, 2010

Another tax lesson from Canada.

Taxes hurt.
The Ontario provincial government last year announced they would be combining their 8% provincial sales tax with the 5% federal Goods and Services Tax (a VAT tax like the one often hailed of late by progressives as a solution to national debt in America).

The sales tax was replaced on July 1st of this year by Harmonized Sales Tax, bringing the VAT to a combined, and stunning 13% in the province.  Statistics Canada released some inflation numbers last Friday indicating inflation in Ontario for July was 2.9 percent and 1.3 percent (nearly half) was attributable to the tax change. Those inflation numbers are the highest for any Canadian province for July, year over year.

The lesson?  Well, there's more than one actually.

(1) The lesson: Taxes hurt consumers and businesses period. A little may be okay but a little more becomes progressively more damaging.

(2) The Liberal government, spinning as usual, said that this was to be expected although there was no indication that it would go above 1.9% when it was announced.

The lesson: Liberals will say anything they think they can get away with, before the fact and by re-writing history afterwards.

(3) The Liberal government also tried to sneak in an Eco tax. It was not pointed out beforehand but it was so badly bungled and misunderstood that for a change, normally reserved Canadians actually complained and some big businesses actually publicly announced they would not collect it.

The lessons: (a) governments can't manage complex. This is not a new discovery, but it's another good reminder. (b) liberals put agenda above morality - in this case tax revenue above honesty and transparency (c) if Canadians were riled up about this, and in liberal-leaning Ontario in particular, then middle America is not Astroturf when it comes to the Democrat agenda. Independents indeed have left Obama and conservatives are very engaged in winning mid-term elections.

Now if only Ontarians would go Tea Party on the HST...

Note: reference links to follow. Reference link added.

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