‘Learning the facts’ about the HST

It occurred to me, as I listened to Finance Minister Kevin Falcon during his luncheon address this week, that he was preaching to the converted.

That’s nothing new for provincial politicians — when they go on the road, their handlers line up friendly hosts along the way who can gather a bit of a crowd to hear the message.

In this case, the friendly host was the Kamloops Chamber of Commerce, and the message was the wonders of the HST, a tax the chamber strongly supports.

Other than a few dissenters like Tom Friedman and Doug Brown of the NDP, who must have wandered in by mistake, the 80 or so in the room were mainly business people, most of whom benefit from the new tax.

They’ll vote for the HST in the mail-in referendum (extended to Aug. 5 due to the postal strike-lockout). They aren’t the ones the government must convince.

Unless the Liberals can talk another five to 10 per cent of the skeptics into switching sides, the war is lost.

A key part of their message is an urgent call to voters to “learn the facts” about the HST. Of course, that assumes the average person will conclude the tax is good once he or she learns the facts.

Which, in turn, suggests HST supporters already know all the facts, something I would dispute. I submit that learning the facts is a significant challenge no matter which side you’re on.

As evidence, I give the example of new-home ownership. A reader called Thursday fuming over the HST and its impact on those trying to buy a new house.

He said he looked at a house with a price sticker of $500,000. The HST on that half million would be 7.2 per cent or $36,000.

The reason for this is a system of rebates that reduce the tax. The hated property transfer tax would add another $8,000 for a total of $44,000 in taxation on the house. That’s compared to $25,000 under the old GST system (five per cent and no deductions), plus the same hated property transfer tax, for a total of $33,000.

How, the reader asked, can anyone but the wealthy afford a new house with that much taxation?

Another good question would be, how does anyone understand the tax system? I asked a realtor to help me with the HST rebates. Her reply was, “They are so complicated I just refer them (clients) to their lawyer.”

So, I called up a lawyer I know — Gerald Watson, who attempted to lay it out for me. He confirmed the reader’s numbers and did his level best to explain the rebates and compare the old way and the new way and by the end of it, there were so many numbers swirling around in my brain I was almost sorry I asked.

“Do you ever get a headache figuring out what people owe?” I asked.

“I have a computer program that does it for me,” Watson cheerfully replied, promising to sit down and explain it some more if I wanted.

Does anybody else, like, say, new-home buyers, understand it, I asked.

“The average consumer doesn’t really understand it, until the very end,” he said. “The typical person knows it’s a vague number.”

If Falcon and his colleagues are depending on the rest of us to get educated before Aug. 5 on how this tax system works, he’d better talk fast.