The NDP and the HST

I think Carole James and the NDP are making a mistake when they claim that nothing can be done about the HST for five years, when it comes up for re-negotiation. This stance only encourages the cynical view among voters that this is merely a cover to allow the NDP to keep the HST if they formed government

Instead, the NDP should take the stand that the solution to the HST is a political, not a legislative, one because, if the provincial Government pointed out to Prime Minister Harper that he stands to lose all 22 Conservative seats in B.C. over the issue in the next federal election, he might be open to terminating the present agreement. This is not an idle threat; if Harper refused to bow to the will of the citizens of B.C. he would indeed pay dearly for it at the polls.

The NDP should consider putting forward an alternative form of the PST--making it a value-added tax, like the GST, except that it would not be applied to services. If services are not taxed, restaurants, hair salons, notary publics and other service-based businesses would once more be exempt from taxation as they were under the old PST, while all businesses would benefit from rebates on the business-related PST they pay, just like the ones they presently receive under the HST.

For years, the NDP has been so afraid of the epithet 'tax and spend' that the party has failed to engage openly and honestly with citizens about the principles underlying the NDP's approach to taxation. The NDP should embrace the phrase, and every time someone tries to use it against them, the party should boldly assert, "Yes, like any government, we will tax and spend--unlike the Liberals, we will tax fairly and spend wisely."

Economists approve of consumption taxes instead of income taxes on the theory that the less income is taxed the more is available for savings to be invested in the economy. However, there is no guarantee that such savings will be invested in the Canadian economy.

The higher one's income, the more one benefits from the shift to consumption taxes which is one reason, I believe, why the rich continue to grow richer and middle income earners, poorer (the lowest incomes are somewhat protected by tax rebates). Middle income earners, while they may benefit somewhat from lower income taxes, still, when consumption taxes are imposed instead, do not have as much money left over after the necessities of life are provided for as do those on higher incomes and this gap widens every time income taxes are cut and consumption taxes imposed instead.

The NDP should start a conversation with the citizens of B.C. on all aspects of taxation, especially the relative benefits and down-sides of income and consumption taxes, and what combination of the two would be the fairest and most effective for all taxpayers.