Originally Posted by DizzyEdge
Is that still true where provinces have harmonized their provincial taxes with the GST? I know that was one of the complaints about the harmonized tax in BC, to simplify things the exemptions one had which the other didn't would be eliminated.
Some utilities are now taxed at 13% instead of 5%, but otherwise, the taxes didn't change significantly in Ontario. Taxes went down on a lot of things as well; hotel rooms were previously taxed 15% and it was lowered to 13%. The savings for business is the main benefit. It created quite a few jobs in the small business sector.
The problem with what leftimage suggested is that to "afford" to exempt essentials from a sales tax, the sale tax to be increased on the things it does tax. The HST in Ontario would be only about 8%, not 13%, if it taxed everything
. And to avoid the sales tax, rich people would just buy their cars and TVs (because after all, it is only rich people who can afford cars and TVs) in other countries. To tax exempt essentials and rely on sales of Porsches and large TV to make up the balance, the tax would have to be several hundred percent. There aren't that many
rich people buying Porsches and large TVs!
You could simply have a lower tax on essentials and a higher one on luxury items, which is similar to what the Ontario PST did before it was merged with the GST, but then that adds a layer of complexity.