Nobody likes to be taxed, and additional taxation is impossible to justify as long as government spending remains out of control. Nevertheless, the public outcry that arose when Ottawa’s new goods and services tax came into effect Jan. 1 was unwarranted. The GST is a new tax, but because it replaces the older manufacturers sales tax, it can hardly be considered additional taxation. Revenue Canada has said the GST, at 7%, is revenue neutral in replacing the hidden 13.5% MST and until the actual numbers are in, one can only accept that estimate.
It seems that the greatest complaint against the GST is that we can now see what is being skimmed off — as if it only hurts now that it is visible. But surely that is a benefit. Because it is visible, any increase in the GST — and we harbor no illusions that there will be strong efforts from this and future governments to increase the tax — will be more difficult to sneak past the voters.
A great deal has also been made of the GST being applied to everything from “toupees to taxi fares.” In the past, this revenue came solely from manufactured goods, and that cannot be justified. No single sector of the economy should be called on to pay for the problems caused by incompetent governments. It shouldn’t be up to the manufacturing sector alone. Service industries make up the fastest growing sector of the economy, and they must shoulder their share.
We’re not crazy about the GST, but we do believe it is an improvement on the old system.
The GST is merely a red herring. What we really need is less tinkering with the tax system and a concerted effort to get government spending to a manageable level. Individuals who want to avoid bankruptcy have to do it, there is no reason our governments should be required to do any less.
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