Tuesday, November 9, 2010

More Populism

The populist aversion to higher taxes, seen in the Tea Party phenomenon in the U. S., has its counterpart in British Columbia, with the public reaction to the Harmonized Sales Tax (HST), which has recently added  a 7% Provincial Sales Tax to previously untaxed items.  The most notable of these are probably restaurant meals, telephone and cable, and some personal services.

The BC Government maintains that the tax is revenue-neutral, being matched by offsetting business tax credits, which will be passed on to the public in lower prices and will encourage business investment in BC.   Nevertheless, opponents of the measure initiated a Province-wide petition campaign, and the issue is set for a referendum next September.  The Government has said that it will eliminate the tax if the referendum passes.

Premier Gordon Campbell's popularity has fallen so low that he has announced his intention to resign.  He has also announced Provincial income tax cuts to try to improve his party's approval rating.

Of course, no one likes to pay taxes.  We do like services, however, particularly when they are free, such as the BC Medical Services Plan, which provides doctor, hospital, and medical services in the Province. 

But "free" government services are not really free.  Someone, somewhere, has to pay, either by taxes, fees, or borrowing.  Charging additional fees for medical services is potentially asking for more populist rhetoric, opening up charges of a "two-tier" system, one for the prosperous, another for the low-income.

Unfortunately, the consequence of not being willing to support the cost of programs is longer wait times for medical services, more crowding in hospitals, more temporary classrooms, and fewer programs for students.

Both in Canada and the U. S., if they can't grow the economy, and don't want to pay taxes, eventually they'll have to decide which programs to cut.  In the current environment of harsh rhetoric, this will not be easy.        


 

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