The GST mystery

Come close and sit down, bring a calculator. I'm going to throw an extra few logs on so you can sit down and work this out for yourselves as well and realize how just incredibly convoluted the GST is.

So one of my bosses at work worked for a long long time in the federal government in the tax department. One day he explained to me the implementation of the GST and why even the department people were incredibly opposed to this new tax. So I thought I'd share what he had to say.

Back in the old days before the GST, the Federal government placed a 13.5% tax on the end product for sale. It was 'hidden' in that it was supposed to be worked into the price without being added. I remember when it was introduced. A friend of mine who now works for RIM (You know who you are Mr. There's Gotta Be Some Indian In Here Somewhere), his dad was one of the folks down at the Chamber of Commerce here in the city. He explained that the _base_ cost, according to what the Feds were telling us, should go down. It actually went up. WAY up. Because you see, what the Feds didn't tell us was the extent of the implementation.

Do you know that the GST is applied to every single product and service there is (With minor exceptions)? Do you understand the ramifications of that? Alright let me explain.

The example that my boss gave me was of a product produced here in Canada by Canadian Tire, a rather useful little air compressor. Under the old system the critter cost the average person, at the time, about $600.00, with about 60 bucks of that being taxes. Well, under the new system it goes like this. All the materials that are bought now have GST on them. And so the plant assembles them and sells them to a distributor. They gotta charge the GST there. The distributor now sells them to regional wholesalers, whoops, another level of GST. Now the wholesalers, they sell them to the stores, there's another level off GST. And finally you the consumer gets to buy it and pay the GST again.

And he said this was one of the rare ones that only ran through 4 levels. Most products averaged SEVEN! Think about it, manufacturers generally don't package, or ship, or distribute. From resources to your hands is actually a lot of steps.

The NEW price under the new GST was close now to $760.00!! With $180.00 plus of it being just taxes! As well it created a system that was infinitely more complex than the old one.

He went on to describe that the Feds then wanted him to reduce departments to deal with a more complex system.

Here are a few quick talking points for you all to think about:

1) This tax was proposed by a conservative government. If reducing government and creating business friendly environments is a part of your general platform, why the fuck would you introduce a tax like this?

2) A reduction in the GST is not beneficial to the average consumer. There's two ways you as the consumer gets fucked. First off, that much of a reduction should lower the overall general cost of the creation of products to buy, yet companies DON'T lower their costs. So really, they save money (Less cost to do business) and you pay the same anyways (Garnering them more profits).

3) The only reason to reduce the GST is to help business, and the loss of revenue for each percentage point works out to be about 6 billion dollars annually. BTW folks, we're gonna run a 12 billion dollar deficit next year.

4) Unrelated personal opinion: Harper is a fuckwit who is out of touch with the general needs of the people he 'rules'. His overall inability to follow his own stated agenda, incredibly stupid comments (The average Canadian doesn't care about the Arts. HAH!), and his failure to produce any discernible results in the area of the environment add up to one big fuckwit. Perhaps even fucktard. Of course, I've stated this before, I really shouldn't blame Stephen. It is the folks pulling the strings that are the real danger.