Tax Time
I don’t really know much about economics, and this next statement has nothing to do with actual financial pros and cons – but I miss having the HST at 15%. Living in Ontairo this year has forced me again to do math when it comes time to tip waitstaff. When you get a bill at a pub here, there’s the 5% GST and the 8% PST on the food you order. There’s also a special 10% liquor tax on your drinks, in addition to the 5% GST you’re charged. Me, I’d rather some just put a simple 15% tax on it all together so I have a guide for how much to tip! (It really became apparent how hard it is to do the math when we ate lunch yesterday. The whole computer system had gone down – we actually were given a hand-written bill on a piece of blank paper. It took the staff awhile to figure it out, then it was given to us with just the food and liquor totals – the taxes weren’t listed separately. It’s a good thing one of us continued with calculus in university!)
But it looks like I might get my wish, moving back to New Brunswick. The province is in the midst of trying to restructure the tax system. The idea that seems to be getting the most attention right now – putting the provincial tax up 2%, making the HST 15% again. From a purely non-economic point of view, I approve. But obviously it’s about a lot more than making it easier to give an etiquette-appropriate tip.
Along with this tax increase – which the province says would make a $1.50 cup of coffee go up 3cents, or add an extra $400 to the price tag of your new $20,000 car – you’d also get a flat income tax rate of 10%.
There’s also a proposal to offer a child care benefit of $600 each year for everyone under six years old. That’s in addition to a non-refundable child tax credit; it would apparently reduce your income tax payable per child up to $400 a year. So, you could sell that as savings of $1,000 for each child who isn’t yet in school. That could buy about 3,000 diapers, or around 2 months of day care (depending on how old your child is and where you live). I’d imagine some people would be mighty happy about that!
Those in favour of the changes say New Brunswickers will end up with lower taxes. It’s just that you’ll only see that on paper in front of you once a year, instead of every day. The first reaction of most people is to say no to higher taxes. My first reaction is to see the silver lining – easier to calculate the tip again! I’m also interested in the increase in child benefits. But I don’t really know enough to grasp the ins and outs of the income, corporate and property tax changes that are all being considered, so I’m not sure if I can say whether I think the whole plan is really going to improve things. Economists seem to be torn, too. I guess we’ll just have to wait and see what the folks making the final decision think – which isn’t that long; the government is set to give its response on Wednesday.
