#26 – In harmony with Mr. Harper.

In trying to find something to say on Premier Dalton McGinty’s behalf about the harmonization of the provincial and federal sales taxes in Ontario, we can only come up with the excuse that it was not Mr. McGinty’s idea. It was federal conservative Finance Minister Jim Flaherty’s. And yet, while Ontario conservatives go out for a beer, it is the governing liberals who will carry the can with the voters for the huge tax grab represented by the move.

One can only wonder what sweet words Mr. Harper whispered in Mr. McGinty’s ear that lured him into taking the blame. His caucus is looking at him as though he might be crazy as he pleads with them to get out and sell the benefits of the harmonized plan. How do you sell a harmonized tax that is in harmony with nothing. The very word “harmonized’ is supposed to mean that it creates something better—if only in sound.

For the federal goods and services tax to be in harmony with the provincial sales tax, you first have to decide if the tax is going to be fish or fowl. What kind of harmony do you get when all the changes are so one sided? What Ontario is faced with is a new, slightly modified goods and services tax that will produce as much as $3 billion more in revenue each year for the province.

And it is not as though the province does not need the money. It is faced with record deficits in the current year and looks like it will be in deficit for a few years to come. For the Premier to be promising Ontario voters a “cash back” deal to accept this tax change should leave every voter suspicious of just what he is trying to pull. It is similar to Mr. McGinty’s claim that the new harmonized tax will streamline operations for business—while sucker punching the consumers.

There is no question that the change, slated for July 1, 2010, will be the most extensive tax change in Ontario in a long time. What Ontario voters need to think about is that the Harper Conservatives are paying the Ontario government $4.3 billion in tax transfers to do it. And if it is really worth that much, you need to figure out if it was their right wing ideology or some nefarious scheme that lead them to it?

All I know is that, as a liberal, I am opposed to sales taxes and in favour of progressive income taxes. The simple reason is that sales taxes require a larger proportion of the income of the poor than do progressive income taxes. Why then would I agree to a cut in income taxes for Ontario because of the increased potential of the combined federal and provincial goods and services tax?

Mr. Harper and Mr. McGinty, in simple words: stuff it!

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Addendum: Please send comments to: peter@lowry.me

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