1. Last fall, I analyzed Stéphane Dion's CTV interview. Yesterday, the CBSC came to the same conclusions as I did. For obvious reasons, mine's more focused on linguistics and theirs is more focused on broadcast standards, but it's the same thesis.
2. In March, I came up with the idea of including the harmonized sales tax in the sticker price. Today it was reported that the Ontario government is pondering whether to do just that. (I'm not sure why the article is framing it so negatively - as a consumer, I'd certainly find it more convenient.)
3. Yesterday I came up with a conspiracy theory. The Globe and Mail's Andrew Steele came up with the same thing. (Thank you anonymous commenter.)
6 comments:
The general idea against including taxes in the sticker price is that doing so hides the tax. I know you'd find that more convenient - so would I - but is it better? For years we paid a hidden manufacturers sales tax (included in the price) and virtually no one knew about it. It was replaced with the visible GST and since then "tax awareness" has increased. I suspect that's a good thing.
You have a lot of good, original thoughts that other people are having, independent of you, later.
Also, I approve of your taxes-included idea. I think the tax awareness in Canada is very negative.
Generally I see tax awareness as neutral. I can make the argument for it being negative, but I can't see any particular argument for it being positive. I wasn't quite financially aware when the GST was introduced. (I'd heard about it in the news etc, but I was a child and didn't really ever buy stuff, so I didn't have a feel for it.) What do you think has improved, Mac?
I'd assume that a taxes-included model would feel like our paycheques do. We get our paycheques with income tax already deducted. We can clearly see how much tax has been deducted by looking at our paystubs, but we don't actually have to go out of our way to write a cheque for our income tax (with all the inconvenience and possibility for budgeting errors that that entails).
Although there is that bizarre and pervasive conventional wisdom that we pay 50% income tax, which we just...don't. Is that what you meant by tax awareness? Before the GST, did people have really bizarre ideas of how much sales tax was charged or something?
As a general principle I believe that being aware of what taxes we pay is a good thing - at the very least in the sense of it being better to know than to be ignorant. It's typically condescending to say that someone shouldn't know or doesn’t need to know.
Before the GST people thought they paid no tax when in fact they were paying a 13.5% tax on many purchases. That's a public policy issue - people paying a lot of tax and not even knowing it. Complete ignorance. The GST eliminated this hidden tax and made people aware (and upset).
As for income tax source deductions, we owe the income tax at the end of the year and the government forces source deductions to make sure we pay the tax. That doesn't apply to retail sales. But if income taxes were hidden in the way it is suggested that the HST could be, then we get hired knowing only our after-tax income and there might be a sign somewhere in the payroll office saying what the various tax rates are in case we want to calculate the hidden taxes paid. We'd stop saying people are earning $X.00, but would speak of $Y.00 instead (where Y equals X less the hidden taxes).
In the current system of source deductions people remain aware of the income taxes they pay (in fact, as you have mentioned, they generally over-estimate the taxes paid, but that fact only supports better education - not more secrecy). My thinking is that we should know what we are paying - whatever it is that we are paying for. In a democracy we are expected to make informed decisions about what our representatives are doing. We created a system of elected representatives in response to the monarch taxing us at a whim. One day we said enough is enough and forced the monarch to come to the people for authorization of any taxation. It’s no coincidence that it is votes about taxation that can cause a government to fall. In my opinion, hiding information from us only hinders our ability to know what is being done by those we have elected and that's not a good thing (unless you simply trust them to do the right thing, of course).
The European model would work then, where they say something like "$X including VAT / $Y before VAT" right on the pricing. (Obviously it isn't dollars, but that's the only money symbol I can convince my keyboard to produce at the moment.)
I'm good with that.
Post a Comment