Sunday, August 9, 2009

HST a tax on savings

From an article by CI Financial:
... A harmonized sales tax (HST) would result in additional taxes being applied to investment management services, including mutual funds, segregated funds and other managed investment accounts, which are part of many registered savings plans, registered income funds and locked-in retirement accounts.

... While ... manufacturers would likely benefit the most from an HST by claiming credits for taxes paid on the inputs used to make their products, there is no similar offset for investment managers. For investors, it would be a tax grab, pure and simple.
A warning to government:
Should the HST be implemented ... financial services firms will be obligated to investigate ways to reduce the impact on their clients. One option would be to move parts of our operation to a province without an HST, such as Alberta. [And don’t think individuals won't also have an incentive to move.]
Taxes, taxes, taxes. We’re taxed on income. When we spend what’s left we’re taxed again. When we try to save it we’re also taxed. Time for a tax revolt.


Raphael Alexander said...

But the people keep voting the Liberals back into power. So all threats are empty and impotent.

Red Tory said...

I look forward to your “tax revolt” efforts against the Conservatives (which pass themselves off as “Liberals” in this province). Good luck with that.

Did you vote “Liberal” in the last election, by the way?

Halfwise said...

Wow, snarky comments. JR, you must be doing something right.

Tax revolts will gather momentum in the US long before here. Their system is not sustainable with the dramatic reduction in income tax revenue and corporate taxes, coupled with the high outlays for those in need, even before there is Obamacare.

I would guess the revolts would take the form of reactions against government wages and expensive programs that do not seem to have much local benefit (military actions in faraway places?) along with some form of objection to taxes on savings, pensions and investments.

In Canada, our economy is stronger and our press more influential. Comfy status quo, frog's water not yet near boiling point...

JR said...

Raphael is right. BC has kept on voting the Libs back in since Glen Clark's NDP crashed and burned. But the NDP wasn't very far behind in the 2009 election.

Voters have their limits and the HST could be the last straw unless the Libs do something substantial to mitigate the pain - like cut the PST by a couple of percent and offer a lot more relief on real estate sales taxes.

Not that the NDP would be any improvement tax-wise or otherwise, almost surely worse.

Halfwise, Red Tory specializes in snark. But he's got half a point about "conservatives" in the BC Liberal party which is kind of a half-baked coalition of Liberals, Social Credit and Reformers. Though I'd bet more high profile BC Libs support the federal Libs than they do Conservatives.

While I said it was "time for a tax revolt" it was more of a fanciful, wishful-thinking, throw-away line. As you say there's a lot more likelihood of that in the US of A than here.

Red Tory, Given the choices I went to the poll soley to vote against STV. How's your "Red Tory" party faring these days?

Anonymous said...

The thing I love about our banks is that when their taxes go down they never pass any savings on to their clients, but when the taxes go up their fees go up almost instantaneously. The two point GST trim saved the banks and insurance companies about a billion a year, and two weeks after the second GST cut my bank reduced my free ATM uses from 10 to 8 per month.

I don't begrudge the banks their profits, but I do wish our banks would ACTUALLY compete against each other for my business. Especially with their ridiculously high mutual fund fees.

Red Tory said...

Though I'd bet more high profile BC Libs support the federal Libs than they do Conservatives.

And this is based on... what? Your imagination, perhaps.

Given the choices I went to the poll soley [sic] to vote against STV.

Really? I was rather more interested in who would represent me in government under the present system. But I also voted FOR electoral reform because the current system is clearly not working in the interests of average working Canadians. I might point to your own post on this subject of getting hosed by the HST as an example of that assertion being valid.

Anonymous said...

As a native Canadian, I'm boiling mad. I'm sick of our corrupt government, both Federal and Provincial, taxing us to death.
Here's a reality check folks.

Let's assume that you make $100K in a year as a small business owner and you have no expenses. You instantly lose 50% to tax, which means that for 6 months of the year you've been working for the CRA, not for yourself. Then add in all the consumption taxes after the fact and you lose another 20-30% more to tax. And now we stand to lose more. It was bad enough that Campbell introduced the hated carbon tax on gas, now he's doing it again.

Enough! Let's end the corruption with a tax revolt, repeal the income tax levied on Canadians in 1917 and force the government to be responsible, otherwise, boot them out - NOW!!!