Say ‘no’ to hiking GST, says reader

There is talk of increasing the GST–Goods and Services Tax by 1%. This makes my blood boil. The discussion seems to be that this will solve many problems, be they municipal or federal.

Who pays this tax? Basically it is you and me!

Let’s look into it.

Let us set up an imaginary business. We will buy and sell widgets.

When our sales reach $30,000 per year, we will have to apply to the federal government for a GST license and then start to charge GST on our widgets.

We start by figuring out what we pay in GST to be able to buy them.

There is the cost from the manufacturer, the shipping, which may be two of the big costs, plus others.

Let’s say that this cost is $5. We will pick this amount for easy figuring. Now there is a simple formula for the price to be added to the selling price. It is 5%. For easy figuring let’s say this will be $6.

When reporting period comes, we take the $6 we charged our customer and subtract the $5 cost which leaves us with an amount of $1 per widget.

We ask our bookkeeper how many widgets we have sold. We then multiply that number by $1 and remit to the federal government.

But you say — wait a minute. I have never bought a widget in my life.

Let’s use another example. Let’s say gas for the car, new shoes, a new lawn mower, a restaurant meal, the pen writing this letter, the list goes on and on and on and on.

So why am I upset?

Because, you and I are the only ones to pay it.

Busineses get all of the GST that they pay back and so they are firm supporters of this system.

Governments do not have to wrestle with a fair and just income tax system.

Whether you are a single parent struggling to make ends meet or a very well paid executive, that GST on the ordinary things we need to buy is the same.

Yes, there is a GST credit available at income tax time. This does not help at the moment of the purchase or you do not make enough money to file income tax papers but you or your children still need shoes.

Let your elected representative know how you feel.

Alice Williamson

Red Deer

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