Quote:
Originally Posted by Sp0r3
I totally understand the principles of HST which makes it a better than the GST/PST system we had before (in theory). But think about this. The current business owners who requires to pay the intermediate taxes are now free from the burden of extra costs. Will those savings be passed down to the consumers? I think not. Business owners are there to maximize their profit. If the consumer are willing still pay the same price as they did before the HST, the owners will not lower their prices. Which means business owners will get extra profit (as it reduced their cost). So how will the HST help reduce the burden of consumers? The answer is none. In the end, consumers get the short end of the stick and business owners get the red carpet treatment.
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The trouble is that so many people fixate on "passing savings to the consumer" as some kind of literal, "you'll save a tonne of money".
As mx703 said, reductions DO occur, and he explained why pretty well. But one thing hindering reductions is the fact that while HST has saved businesses money, depending on sector: rising gas prices, rising food crop prices, impending minimum wage increase, etc has really put a damper on reductions for goods and services.
But back to what I wanted to say, the "savings to the consumer" isn't so much a finite, measurable, cash quantity, as it is the well being of the consumers. Now that businesses are saving money, like you said, they like to maximize profits, milk it for all it's worth. If the climate is good, they'll want to make the most of it, and that means expanding their buisness (more stores, larger stores, etc), increasing investments, hiring more employees (to handle more business), raising wages (to keep employees through the increase in business): All of that keeps people employeed, gets more people employeed, betters our economy.
Business owners aren't just going to sit on their extra earnings, they'll use it to make more. And that is where consumers like you and I benefit, jobs and higher paying jobs.
Just because you don't immediately benefit in your wallet does not mean this is bad policy, think about the future.
When businesses are taxed to hell and riddled with restrictions, THAT's when consumers will get the short end of the stick.
Give a man a fish, he eats for a day.
Teach a man to fish, he eats for a lifetime.