28 August 2009

HST: Woe to families

According to some, British Columbia's new HST, to become effective July 2010, will mean serious hardship for middle-income families. For example,
That morning bagel and cup of java you grabbed this morning cost $4.20, but a year from now breakfast will cost 28 cents more.

A quarter and a few pennies may not seem like much, but over the course of a day, a month or a year, dollars lost to the harmonized sales tax are going to add up.

Just picture it: Ted and Suzy have two boys, Timmy and Sally, aged seven and 12 respectively.

Ted works as a forklift driver and his wife Suzy is a receptionist at a chiropractor's office.

Suzy took the car to work today so Ted, pressed for time, had to take a taxi. Cost for the ride today: $12.80 cents. Cost with the HST this time next year: $14.34.

Suzy gets out of work early and picks up the boys to get their haircut. As the barber dusts the hair from Timmy's forehead, mom picks the $40 tab. Next year: $42.80.

When the couple comes home tonight..., sitting on the dining room table are bills for hydro, cable and Internet, telephone and newspapers totalling $250. Next year: $267.50.

And the couple still hasn't considered a mechanic's bill, fees for the kids to go to karate classes, back-to-school supplies, and four super-saver plane tickets on sale now for a flight before Christmas to go see family in Winnipeg.

Tomorrow it's grocery shopping for the week and family night out at the International House of Pancakes - a Saturday night tradition.

Forklift driver Ted and receptionist Suzy are fortunate. Each has a full-time job.

The family has a car, a home, a telephone AND Internet connection, rather than having to choose one or the other because they can't afford both. The family also buys newspaper subscriptions, dines out once a week and travels by air for vacations and is able to visit with other members who live further away.

The children take karate classes and get their hair cut by a barber, rather than by mom or dad.

Ted, whether pressed for time or not, can afford a cab ride rather than having to walk - or to take public transit which likely would get him to his destination in the same amount of time as a cab would.

Now add to that Ted's and Suzy's daily coffee-and-bagel ritual.

To the people who buy a bagel and a coffee one or more times a day, some of you doing this five to seven days a week, I'm not worrying that you'll have to pay an additional 28 cents for the same ritual next year. Or that you'll pay more for airfare, haircuts, cab rides, etc. I worry about staying within my $67/month food budget.

Bottom line: Consumption taxes are, by definition, about consumption. The more you consume, the more you pay.

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