BC talking about scrapping the HST

On the surface, or so it might appear from Premier Campbell’s televised speech to the province last week, the government is comfortable letting the public decide whether to scrap the HST.  This is quite rare as most governments don’t allow the general public to vote on tax policies, never mind the option of scrapping the HST! 

However at the same time BC is looking at a 15% personal income tax cut, which could make BC have one of the lowest, if not the lowest personal tax rate in the country.  Many people are complaining about the HST and there is a referendum on it next fall.  It looks as if the government is hoping that the personal tax savings will help people forget about the HST. 

The main issue with scrapping the HST is that BC may have to pay back over $1 Billion to the Federal Government.  This would mean that the tax cuts that they are proposing would be offset in the future by tax increases to pay the debt to the Federal Government.

In my opinion taxation in Canada should be one or the other: a consumption tax (such as the GST or HST) or income tax.  I don’t think we should have both.  Even though we at Kustom Design make our income off reporting peoples’ and corporations’ tax returns, I would suggest that the consumption tax would be the better method, thus simplifying everything for everyone!