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Tony Wilson

Lack of leadership spelled doom for HST Add to ...

Sixth, if you’re going to have a referendum on something you believe in, a simple majority of 50 per cent plus one of all voters is too low a threshold to win it. Why the government chose to go that route when it had the power to use the super-majority requirements under the Recall and Initiative Act suggests it didn’t have its heart in it. The government played to lose.

Said one on-line commentator to this newspaper: this is “a sad day evidencing the ‘dumbing down’ of the electorate who have voted out Campbell without realizing he's already gone. The issue isn't Campbell, and the decision is stupid by both the voters and the government to allow a referendum.”

So what’s likely to happen now? I really don’t know, but I do know that governments defeat themselves and it will be difficult for voters who would ordinarily have voted for the B.C. Liberals to forgive and forget this profound cock-up that will cost the province, its citizens, and its businesses, billions of dollars.

They used to say only Nixon could go to China. Perhaps only the NDP can resurrect the HST. Mr. Dix is on the record as opposing the HST because it increased taxes for working families. But that may just be politics. Centre For Policy Alternatives economist Iglika Ivanova has said “as an economist, I agree that value-added taxation is an improvement over the current retail sales tax system used in both B.C. and Ontario.”

So VAT taxes have some support on the left.

Leaving aside the issue of what working families will do if the businesses that employ them move to Alberta or Ontario, I’m hoping that Mr. Dix – should he win the next election – takes a page out of Jean Chrétien’s playbook, tones down the class warfare shtick, and realizes that without a value added tax such as the HST (or in Mr. Chrétien’s case, the GST), there will not be sufficient revenues generated by personal or corporate income taxes to fund health care, teachers’ salaries, the justice system and the other social programs near and dear to all British Columbians (and certainly to New Democrats).

High personal and corporate income-tax rates tend to drive businesses and business people elsewhere, killing the goose that pays for the golden eggs that fund our social programs. Social democratic political parties all over Europe have realized how important VATs are to fund social programs. Why is British Columbia any different?

Perhaps the only hope for a VAT type of sales tax in the next decade is with the NDP, which could be stuck finding a way to repay the federal government a lot of money after the next election.

Maybe the party will work out a deal with Ottawa and call it … the PST.

This article has been corrected from an earlier version.

Special to The Globe and Mail

Tony Wilson is a franchise and intellectual property lawyer at Boughton in Vancouver, and he is an adjunct professor at Simon Fraser University. His newest book, Manage Your Online Reputation, was published in November.

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