Exploring the Strategy Behind the Harper Sales Tax

The HST, or Harper Sales Tax (OK … Harmonized Sales Tax) will punish a lot of folks, but no group will be hurt more than the BC and Ontario Liberals.

On the surface, they’re being told it’s a good thing.  The Cons have given the veneer of entering discussions with the provincial leaders in good faith and on a non-partisan basis.  They’re even offering financial incentives to ease the transition.

I smell a plot.

I mean, when the Cons at the provincial level won’t touch this with a 100-foot pole, why should anyone?  If I were running the Ontario government (which, thank god, I’m not) I’d be running for the hills!

Let’s strip it down:

  • Harper won his first whiff of power by promising two things:  an investigation into the Liberal Sponsorship Scandal (frighteningly similar to the eHealth scandal with McGuinty) and the reduction of the GST by 2 full points to 5% (with lots of grandstanding and promises of reduction in cost of living).
  • Since then, Harper’s come through on his promise, but we all know he’d like to reduce taxes more, especially the cursed GST, given that he’s an anarchist and libertarian that doesn’t want any government at all in our lives.
  • However, once you reduce it from 5% to a lower level, you might as well ditch it.
  • Harper won’t do that because the corporate world wouldn’t be able to hide the decrease in unchanged prices (I mean, did anyone really enjoy the full benefits of saving $0.02 on an ice cream cone or other mundane daily purchases?).  They would actually have to decrease prices.
  • Instead, he needs a bigger base to hack away at, which would ultimately be the HST.
  • He’s now got 13% to play with instead of a mere 7.
  • Ontario and BC will be hosed royally and will be told they’re out of luck once the transfer of sales tax power is surrendered.

I’m not going to deny that exporters need every iota of support they can get in today’s world, but this will not help the Ontario government support its infrastructure in the long run.  When they’re tax revenue is slashed by the Federal Cons, they will have no choice but to slash their budgets as well.

We will then get the Harris years by proxy.

What do you think?  Am I being a little too suspicious?  Do we have evidence that this will be done without harm to the politicians at the provincial level?

3 comments on “Exploring the Strategy Behind the Harper Sales Tax

  1. I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you down the road!

  2. The Conservatives are facing serious internal contradictions here.
    Although they fought each other tooth and nail Flaherty and Hudak did serve together under Mike Harris. It was no secret that they hated each other.
    Then Flaherty’s wife ran against Hudak for leadership of the Ontario Conservatives.

    Now we see the leftovers of that nasty battle. Hudak’s pride has him playing politics with the future of the people of Ontario, and opposing the HST, just to settle a grudge with Flaherty.

    Sad.

  3. In reply to GR: understood about the ‘rivalry’, but is it really all it’s cut up to be or is Hudak simply trying to position himself with an issue that might actually get him elected?

    For me, the central plan is to attack the Liberals on all angles, from all levels at all times. This is no different and I’m certain that if Hudak were in charge, we’d hear a different tune from the provincial Cons about how they’re the government to work with the Fed Cons.

    Thanks for reading and have a good one!
    Liam

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