Why going back to PST is a bad idea for BC

This is my personal blog, so I rarely post anything that is not personal.  Talking about PST is likely not “personal” for a blog, but I have been thinking about this a lot lately and I can’t help but want to rant about it.

Back in the summer, British Columbians voted to extinguish the HST and bring back the PST.  I believe this is a terrible decision made by British Columbians.  Yes, I believe in democracy.  That’s not the point of this post.  However, I do think that voters can be mislead when making a decision.

PST is an out-dated tax.  Did you know that PST started out as a tax on tangible goods?  Tangible goods are things like tables and chairs and computers and shoes; things you can touch and see.  Then over time, the provincial government decided that it needed to tax certain services too.  So they added those services to the legislation, like telecommunication services.  Ok, fair enough.

But then guess what, computers came along and all of a sudden there’s a thing called “software” you need to run the computers and programs.  But “software” is neither a tangible good nor a service, so the PST wouldn’t apply, right?  Wrong!  To bend the legislation to apply PST on software, the provincial government changed the definition of “tangible personal property” to include software.

That’s right, “tangible personal property” includes software.

Let’s just let that sink in for a minute.  Since when is software tangible?  I mean, I might have been an ESL student, but even I know the English meaning of “tangible” does not apply to software.  So we can just randomly define things to suit our own desires, because we live in BC?

If you are purchasing adult size clothing or shoes, you can just say you’re buying them for a 14-year-old and PST will be taken off your tab.  Yes, this works well if you actually have a child to purchase for.  But do you have any idea how many high-end clothing stores sell their expensive pieces without charging PST just because someone claims their 14-year-old is going to be wearing them.  I don’t like paying tax on my clothing either, but doesn’t it irk you when someone who could afford high-end things lie and not pay that tax?

I seriously wonder how many people voted to bring back the PST just because they are pissed with paying HST on a restaurant meal.  The year after HST became effective in BC, I asked every restaurant owner or waitress I encountered whether HST affected their business.  All, yes all, of them said no.  So if everyone still goes out to eat after the HST came in, is that really a good reason to bring back the PST?

The other thing with PST is that it is a sunk cost to a business owner.  For example, a restaurant purchases new serving plates to serve you your sushi platter.  The restaurant has to pay PST on those plates, and it can’t claim it back as an input credit.  So guess what, it would have to increase the price of the sushi platter in order to make enough profit to cover the cost of PST.  Who ends up paying for the PST on those plates?  The patrons.  Sure, you can say that there can’t be that much PST on a few plates, right?  Ok, so what about the big screen TV and the tables and chairs and stoves and ovens and linens and utensils and light bulbs and pots and pans and cash till tape?  The patrons end up paying for all the PST on all that stuff.

How is it any different from HST?  If a restaurant pays HST on the tables and chairs and stoves and blah blah blah, it gets to claim back the HST as an input credit from the government.  Essentially, it doesn’t pay for the HST.  So there is no need to increase the price of the sushi platter to make you pay for the tax.  HST helps keep prices low.

Going back to PST also means we need to pay back the $1.6 billion we have received from the federal government.  Who wants to pay it back?  Not me.

There is so much more I want to say, but this post is getting a bit too long on a topic that really has nothing to do with my life and therefore not the spirit of the blog.  Thank you for reading my rant.  It’s probably the weird weather that has gotten to me.

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