http://www.vancouversun.com/will+pump+spending+enough+blow+budget/1982330/story.html
Summary
Despite the strong disapproval of the HST, the impact is not as harsh as some critics may argue; it really "depends" on consumers' spending. The HST influences certain goods and services, such as haircuts or restaurant bills, to rise in price by including the PST. However, businesses and government will do less paperwork. With the input cost reduced, prices of products are lowered. For Canadians living below the poverty line, the HST will not concern them, since food costs remains the same and they are eligible for the HST tax credit. Moreover, the government recently announced a significant increase in income tax deductions. Overall, the savings will mostly offset the cost of the HST.
Connections
This article on HST relates to Chapter six in the accounting textbook as it is the province's newly introduced tax. So far, we have been familiar with the GST (5%) and the PST (7%). With the HST effective as of July 1st next year, businesses will no longer have to prepare two packages of paperwork: PST documents for the provincial government and GST documents for the federal government. It will all be combined, which requires less paperwork. New accounts, such as HST Payable and Recoverable, will be introduced in every business's book in place of the GST and PST accounts. Thus, the HST will contribute by simplifying the procedures of many businesses.
Reflection
With the economic downturn nearly over, the HST is the most suitable source for the government to generate revenue for the province's billion-dollar deficit. It is better than increasing property or income tax. I am not implying that I wholeheartedly agree with the HST, but this option is the least worst. For consumers in general, the HST does not have any extreme differences. Merchandises have always been charged with two taxes. However, restaurant owners will be deeply affected by the drop in business, possibly forcing a few to close. Meanwhile, supermarkets will prosper. Despite the positive and negative influence over certain business sectors, I hope the government will not propose another tax that has worse terms than the HST.
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With the new Harmonized Sales Tax, people may or may not be strongly impacted. As you've stated, only certain costs will increase because all prices will now include not only the GST but the PST as well. Things such as restaurant bills, haircuts and other services will be hugely affected because of the HST. Restaurants will be the most impacted because people will tip less in restaurants because they will be paying higher taxes on their food. However with the input cost reduced, prices in general may be lowered. Also, people that are living below the poverty line, will be eligible for the HST tax credit on food costs.
ReplyDeleteMany people disagree with the HST, but I personally don’t see why. If you can afford to eat out, can’t you afford to pay the extra tax? And if you are unwilling to pay the extra tax, why not cook a healthy, tax-free meal? Just change your spending-style to lower the amount of HST you have to pay. It’ll be better for your health and prevent you from purchasing unnecessary things. Businesses will only have to submit one set of paperwork for taxes. This saves a considerable amount of time. Therefore, I think the HST will not significantly impact people.
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