The GST - The REAL Facts

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What are the facts about the GST anyhow? Well, we used to have a 13% Federal Sales Tax on all goods sold. This FST was charged on the manufacturer's invoice. Many goods produced were only taxed on the cost of materials. If we want to simplify things, we could say that from the manufacturer, the tax on a $100.00 item (discounted to the retailer by 50%) was $6.50. Fact is, there was, very often, a wholesaler in between who did not collect the tax so the actual tax on this $100.00 item (since the manufacturer usually collected the tax) may only have been about $5.00, however, let us, for argument's sake, use the figure of $6.50. Today, on a $100.00 purchase, we pay $7.00 in federal tax. This, again, is based on the cost of goods where services were not taxed. Import broker services, for example, are now taxable (as are a multitude of previously untaxed services). One mustn't imagine that the expense of this new tax is not passed on to the consumer. Additionally, we pay tax on the service portion of auto maintenance adding at least 30% more to the tax load on this kind of expenditure. The GST is a cash cow and it is unimaginable that any political party, once in power, would simply give up that source of revenue (unless they are fools) and Mr. Chretien is no fool. He is not honest but neither is he an idiot.If we take this last statement as a given, then we must also assume that he never had any intention of dismantling the GST.

We shouldn't, however, pick on him. Fact is, no matter who is in power, the GST is there to stay and if it does go, it will be replaced by something else. The GST is a cash cow and no politician is going to butcher that hunk of meat!

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Posted April 14, 1998
Model 14A - Web Sites to Go
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