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HST and economics: two minus one equals three?
28 June 2010
I'm obviously a dunce when it comes to mathematics, much less economics. To me, the simple equation two minus one would equal one. Dalton McGuinty's government, apparently, has a new math, and in their calculation two minus one equals three. My schooling was obviously inadequate.
McGuinty's Liberals are boasting how more taxes will boost the economy and create hundreds of thousands of jobs - 591,000 according to one form, "nearly" 600,000 according to another. So, according to Liberal economics, having less money means we will spend more and create more jobs. Interesting theory. That means, I suppose, the poorest people in the province will become the largest employers.
It's also directly opposite to the theory posed by Stephen Harper's Conservatives when they reduced the GST, saying that lower taxes meant people would have more money to spend. Obviously the idea of having more money in your pocket is wrong and you need to have less to spend more.
The Liberals are also telling us the HST will "make our province more attractive for new business investment." More attractive, than, say, Alberta, with NO provincial taxes? I can't quite fathom how spending more on the same things in Ontario than in other provinces will bring us more businesses, but I'm not an economist.
I do know that, when I ran a small business, I estimated the cost to prepare my business for the HST - program my cash register, have my accounting system upgraded, update software, etc. - would be at least $1,500. And not only would there be more things I would have to pay taxes on in future - new expenses that had to be passed on to the consumer - I would lose the rebate I used to get from the province for collection PST (about $500 a year). So that would be an initial cost of at least $2,000 to one small store. But according to McGuinty's Liberals, having less money meant I would be more likely to create jobs. Silly me, I was worried I'd have to lay someone off to make up for the added expenses from the HST.
With added taxes on fuel and other items previously untaxed, my costs would also have gone up - suppliers won't absorb those, they just pass them along. Which in turn meant I would have had to put my prices up. But the Liberals tell me that will be okay, because instead of customers buying less, they will want to buy more.
I obviously need to go to a Liberal school of economics, because all the math I learned in school so many decades ago has apparently been superseded by the New Liberal Math, where less is more.
But I'm not alone in my need for re-educating. Seems most Ontarians - based on the Old Math - are in the same boat. From the Ottawa Citizen:
Only 74%? Well, if I understand Liberal math correctly, that's really only 26%. Another site reported on the new "hated" tax:
Applying the lessons of Liberal math, 15% support must mean 85% support. Ah, I think I'm beginning to get a handle on how this New Liberal Math works...
McGuinty's Liberals are boasting how more taxes will boost the economy and create hundreds of thousands of jobs - 591,000 according to one form, "nearly" 600,000 according to another. So, according to Liberal economics, having less money means we will spend more and create more jobs. Interesting theory. That means, I suppose, the poorest people in the province will become the largest employers.
It's also directly opposite to the theory posed by Stephen Harper's Conservatives when they reduced the GST, saying that lower taxes meant people would have more money to spend. Obviously the idea of having more money in your pocket is wrong and you need to have less to spend more.
The Liberals are also telling us the HST will "make our province more attractive for new business investment." More attractive, than, say, Alberta, with NO provincial taxes? I can't quite fathom how spending more on the same things in Ontario than in other provinces will bring us more businesses, but I'm not an economist.
I do know that, when I ran a small business, I estimated the cost to prepare my business for the HST - program my cash register, have my accounting system upgraded, update software, etc. - would be at least $1,500. And not only would there be more things I would have to pay taxes on in future - new expenses that had to be passed on to the consumer - I would lose the rebate I used to get from the province for collection PST (about $500 a year). So that would be an initial cost of at least $2,000 to one small store. But according to McGuinty's Liberals, having less money meant I would be more likely to create jobs. Silly me, I was worried I'd have to lay someone off to make up for the added expenses from the HST.
With added taxes on fuel and other items previously untaxed, my costs would also have gone up - suppliers won't absorb those, they just pass them along. Which in turn meant I would have had to put my prices up. But the Liberals tell me that will be okay, because instead of customers buying less, they will want to buy more.
I obviously need to go to a Liberal school of economics, because all the math I learned in school so many decades ago has apparently been superseded by the New Liberal Math, where less is more.
But I'm not alone in my need for re-educating. Seems most Ontarians - based on the Old Math - are in the same boat. From the Ottawa Citizen:
Quote
A poll conducted for the Canwest News Service by Ipsos Reid in December, found that 74 per cent of Ontarians oppose the HST.
Only 74%? Well, if I understand Liberal math correctly, that's really only 26%. Another site reported on the new "hated" tax:
Quote
Opposition to this proposed tax has increased to 75% in Ontario, based on a recent Angus Reid poll.. Among those opposed, 57% identify themselves as "strongly opposed". Only fifteen percent of the 1,162 Ontario residents polled support the proposed tax.
Applying the lessons of Liberal math, 15% support must mean 85% support. Ah, I think I'm beginning to get a handle on how this New Liberal Math works...
