Path: utzoo!mnetor!tmsoft!mason From: mason@tmsoft.uucp (Dave Mason) Newsgroups: can.general Subject: Re: That F'n Fed. Sales Tax is Gonna *HURT*!! Message-ID: <1989Aug15.133800.11474@tmsoft.uucp> Date: 15 Aug 89 13:38:00 GMT References: <1989Aug13.161201.7535@tmsoft.uucp> Reply-To: mason@tmsoft.UUCP (Dave Mason) Followup-To: can.general Distribution: can Organization: TM Software Associates, Toronto Lines: 39 In article kim@watsup.waterloo.edu (T. Kim Nguyen) writes: >In article <1989Aug13.161201.7535@tmsoft.uucp> mason@tmsoft.uucp (Dave Mason) writes: > > In article kim@watsup.waterloo.edu (T. Kim Nguyen) writes: > >textbooks!?!), ... what else!?? I can't believe the gall of the govt, > >to tax someone 9% on a 6-figure price for a house! > > Most of that house is currently covered by an 11% FST. It's really > only the final assembly (Gee, sounds like Free Trade :-) that is newly > taxed. [...] >Is the FST applicable ONLY to new houses??? I was under the >impression that ALL house sales were subject to the new tax. Only new houses. The GST only applies to value added, and inflation/appreciation is not normally considered to be value. >Another point I'd like to make concerning the FST: it will add up to >a lot more than 9%, since the tax is applied at ALL levels -- so if >you buy a new house, the builder pays FST on the materials, FST on >various other services he purchases, and *THEN* you pay another round >of FST on the total price. This (I believe) will apply to all goods >which go through distributors, wholesalers, retailers, etc. No. If, for example a builder pays $100,000 for materials, she would pay $9,000 GST. Then let's say the house sells for $200,000 so she would collect $18,000 GST from the buyer and remit that to the government, but would claim the refund of the $9,000 previously paid re: that house, so only $18,000 tax would have been collected overall, but it would have been collected as the parts progressed through the system. The new taxation is basically on services (such as the building of the house above, lawyers, etc.). But the tax is not compounded. The only problem that I see is that this mechanism is rather unwieldy and expensive to administer (the government expects to hire 1500 people to collect this tax). It would seem to me that it would be simpler (though there would be a one time delay) to collect the tax only on the final product when it is being sold to an end user or being exported. ../Dave