HST

Why I Loath the HST

by bigcajunman on July 5, 2010

My guess is that the Harmonized Sales Tax is a necessary evil, but I still can loath it, and I have a specific area that upsets me to no end, and that is the HST has the potential to be a non-linear revenue growth in the area of Gasoline.

For those of you have not looked closely, the price of Gasoline is already highly influenced by the taxes put on by various levels of Government. The following graphic from the CAA outlines just how much we pay in taxes on Gas already:

These numbers are all approximate now, but given the HST now adds PST on top of these taxes it asks an interesting question, When is the HST/PST tax charged on the price?

From June 30th to July 1st in Ottawa gas prices went from 94 cents a litre to $1.02 cents a litre. That seems a bit of a large jump given my understanding is the 8% increase should have been on the CRUDE COSTS+Profit+Refining costs of Gasoline, not on top of the other taxes that are already in place, however, this does not seem to be the case.

As an example if Gasoline costs 43 cents before all of the added taxes, the HST should only add about 3.4 cents more to the price, but this does not seem to be what is happening. What seems to be happening (in my opinion) is that the HST/PST is being added ON TOP OF the other taxes on our gas. This means that the revenues from the HST/PST portion is from Taxes already charged?!?

This could mean that if the Federal Government increases their Transport Tax on Gas, or worse invokes a “User Tax” on Gas of 10 cents more a litre, does the new HST/PST grab another 8/10 of a cent from this increase? If so this is dirty pool on all levels of government, since they are Taxing, Taxes, and can increase their income by announcing only 1 tax increase when in fact there are TWO that come into play.

Anybody care to set me straight on how this should all work, please go ahead, I am willing to say I have got it wrong, but I don’t seem to be.

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Random Thoughts: HST, HST, HST!!!!

by bigcajunman on July 2, 2010

HST Welcome Evil Tax Overlord

The big news of the week is the coming of the HST and it’s ramifications on folks in Ontario and B.C.’s wallets and pocketbooks. Is it going to be a tax grab, Yes. Are some vendors going to try to grab a little more, Yes. Sorry this is the law of the jungle, watch out for any added taxes that maybe shouldn’t be there, just in case someone tries to Bazinga you.

With Canada Day falling on a Thursday I assume most of my good readers (who can) are taking an Enormously Long weekend, so enjoy your time off.

In the blogosphere this week, there was a lot of interesting chatter (not just about the G-20 fun and games in Toronto too).

Michael James asks the question RRSP vs. CPP , and whether we should just all be left to our own devices to deal with retirement savings, that is a harsh view, in my opinion (but if so, I might buy a lot of Purina stock given how many will be living on Cat Food).
Preet announces a bold Experiment: A Wiki For Canadian Investors which could be interesting, but remember Wikis can sometimes be inaccurate (since it’s input is from it’s readers).
The Canadian Capitalist points out that even though Canada never had a Ca$h for Clunkers program it does have The Retire Your Ride Program, which is useful if you drive an old beater like he did.
Larry MacDonald quotes me in his post about Earthquake Insurance, where he actually went out and found out how much that might cost!
Jon Chevreau pounds about a tonne of salt into our wounds with The Mother of all Tax Grabs - Happy HST Day. Thanks Jon, maybe next time you could just pour vinegar on it too!
The Canadian Finance Blog (no not me) had a Canada Day Look at the Canadian Financial Blogs, which lists me as an old timer, I guess that is what I get for having all this grey hair!
Should you use Index Funds or ETF’s asks the Canadian Couch Potato, which is a good query, I guess the one you understand best is the best answer.
Can BP Go Bankrupt due to the Oil Spill? Not sure but the Million Dollar Journey does ask that very question, just glad it wasn’t Petro-Canada.
Gail V-O has a Financial Literacy Rant, which asks some very pointed questions about this push to be Money Savvy.

Bazinga HST!

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