Blogs & Comment

Unbearable lightness of the HST (II)

As we know, the proposed HST for Ontario will increasethe sales tax by 8% on new houses selling for more than $500,000.This percentagewill decline as prices get lower, becoming zero at $400,000.
I could not find any reference to the $400,000 and $500,000 thresholds being indexed to inflation. If theyre not indexed, then the HST will fall on ever greater numbers of new house buyers as the prices of houses rise over time. The amount of taxes collected will keep getting bigger simply because price appreciation will boost more and more houses into the fully taxed category.
This is the problem with the GST. Its thresholds for rebates never were indexed, so as house prices went up over the years, more houses were sold above the qualifying criteria — resulting in increasing numbers of families paying full GST on their home purchase. The surreptitious tax grab has been a tax-collection master stroke — that is if taxation is defined as the art the plucking the greatest amount of feathers with the least amount of squawking.
But from the chickens perspective, its what I would call passive plunder. And the Ontario Government looks like has now set up its own apparatus for denuding taxpayers. Its a flaw that should be fixed; the thresholds in the HST should be indexed to inflation