Decision day draws near for HST

With the HST referendum package in the mail, the oddly struck question now needs an answer:

“Are you in favour of extinguishing the HST (harmonized sales tax) and reinstating the PST (provincial sales tax) in conjunction with the GST (goods and services tax)? (Yes/No).

With the HST referendum package in the mail, the oddly struck question now needs an answer:

“Are you in favour of extinguishing the HST (harmonized sales tax) and reinstating the PST (provincial sales tax) in conjunction with the GST (goods and services tax)? (Yes/No).

If you want to extinguish, or get rid of, the HST, vote Yes; if you want to keep the HST, vote No.

After all that brouhaha last year over the HST and the way it was introduced the year previously (and which proved to be Gordon Campbell’s downfall), recent polls show that the public’s view on the tax has changed.

According to an online survey of randomly selected British Columbians conducted by Angus Reid, 56 per cent would vote Yes to extinguish the HST while 44 per cent would vote No. A year ago, 82 per cent would have voted Yes to get rid of it while just 18 per cent would have voted No to keep it. They were separated by a whopping 64 points compared to now where they are separated by just 12 points.

What changed?

People got beyond the hype, took a breath and had a chance to evaluate a year of HST buying. Many likely saw little difference in living costs. For some 80 per cent of purchases, the tax on goods is the same as under the old GST/PST system. The tax is higher on those purchases that were previously PST-exempt. Many enjoyed the quarterly rebate cheques. And the anger seemed to dissipate with Campbell gone from the scene.

Apparently, the animosity came primarily from women (64 per cent), people aged 18-34 (62 per cent), and people in households with an annual income below $50,000 (59 per cent).

The poll showed that 59 per cent of respondents have not put off a major purchase because of the HST.  However, 24 per cent held off buying anything over $500, 22 per cent avoided a purchase over $5,000, 22 per cent postponed a trip and 16 per cent postponed work with a contractor (home renovations for instance).

Credibility was a big factor in grappling with the new tax system. While there’s real caution in putting trust in politicians, British Columbians respected small business owners (63 per cent) and economists and academics (61 per cent) as being credible to varying degrees when talking about the HST. By contrast, Premier Christie Clark received a 40 per cent credibility vote compared to NDP Opposition Leader Adrian Dix who received 35 per cent.

To sweeten the pot, Clark announced recently that the Liberal government will reduce the B.C. portion of the HST to six per cent July 1st 2012 and to five per cent July 1st 2014 bringing the HST to a combined 10 per cent tax. But that reduction in the B.C. portion of the tax won’t apply if the Yes vote wins and we go back to some format of a 12 per cent GST/PST tax system.

The trouble with the ballot question is that, if it’s not read carefully, it could be misleading. The answers are instinctively counter to what you think you’re voting for.

In the survey a sizeable proportion of people got it the other way around where 17 per cent – and 19 per cent of those ready to vote Yes – mistakenly thought that if the Yes side wins, the HST goes down to 10 per cent. If the Yes side wins, we’re stuck with some form of the old GST/PST system and the 12 per cent tax.

A Yes vote means get rid of the HST; a No vote means keep it with a two-point reduction to a 10 per cent tax.

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