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PAGE 14, WHITBY FREE PRESS, WEDNESDAY, JANUARY 16,1991 LTT mts.ER:MIseonceptinsabut-the GST To the editor'. Incredibly, there many inisconceptions GST. The recent lette: Webster (Free Press, 1990) la one of mhany e) That letter did con out that "the only rea GST is te rep manufacturera' tax." manufacturera' federa (FST) colecte annual r for the federal gove about'$19.3 billion. Ai presented, the GSTi "revenue neutraFl" increase or decreas4 governient revenues.1 Department of FInant net revenues from t, about $19.5 billil Good lh Té the editor Congratulations. Anderson for bhiset the GST. I support you. Best a contribution te deficit reduction is relatively negligible. remain so Webster's understanding of the about the reasona orreplacing the PST r from RL with the CeT are, hWvr 4Dec. 16, Incorrect and incomplete. xamples. - First, Webster is,*Incorrect te rectly point say -that Canadian exports under son -for the PST are subject te the saine place the 13-1/2 per cent tax as goods sold' The old in Canada. In fact, exporte are sawles ta supposed te be exempt - and they rvne are exempt at least of any direct ietreeu PST. But the FST is a much more rnment of rasv and insidious tax than 9 ignal at. About 50 per *cent of the *~~~S (.. obuer $9 billion) is levied on S no net nes inputs - atationei7r, einetesk computera, the roof, walis cneed th and floor, thne telephone bill. Ail of he Of thie tax represents increaaed coat on. The to domestic producers that must be recovered through higher .. selling prices. To the extent that Lck . those sales are exporta, there is an indirect FST component in the oelling price of ail exporta - a coat that fqoreign producers do not have andhence; that places us at te Doug a competitive disadvantage. nd against The GST remnoves t&S coat from. current business inputs and )f luck! ahould benefit Canadian exportera - and Canadian AM Ward workers. The benefita will not be Whitevale meen overnight - teo much of the The French Immersion program îs available to ail children e admission to Senior Kindergarten. If interested,,please contact (by p person) the sohool nearest your residence which offers this Registration should be. received by Friday, March 1 st, 1991. Oshawa (K-8): * Feb. 12,> 1991 Ridgeway PS. 728-4532 Oshawa (K-6): *Feb. 21, 1991 Gertrude Colpus P.S. 725-8271 Pickering (K-8): *Feb. 7, 1991 -Sir John A. Macdonald P.S. 839-1159 Pickering (K-8): *Feb. 14,1991 Frenchman's Bay P.S. 839-1131 Uxbridge (K-6): *Jan. 31, 1991 Principal, Uxbridge PS. J. Crosbie 852-9101 Port Perry (K-8): *Jan. 15,1991 Principal, RH. Cornish P.S. I. Cooke 985-4468 Principal, N. Simpson Ajax (K-S): *Jan. 30, 1991 Southwood Park P.S. 683-5230 Ajax (K): *Jan. 24, 1 91 Principal, (at Parkside P.S.> B3- Wilson Unnamed Pickering Beach P.S. -683-0921 (Parkside P.S.) Whitby (K-6): *Feb. 28, 19S1 F.M. Heard P.S. 668-3251 old PST is buried in long-termi inputs (building, equipment,. etc.). Second, Webster did not point out, that there .will be a more immediate and dramatic effect on the competitive position Of importa. Currently, moat importa are subject te the 13.5 per cent PST on the duty paid value at the border. However, importera incur costs for marketing, distribution and administration in Canada. WhiAle the final price te consumera reflecta those coats, no PST is coilected on the increase in price. Canadian producers, of course, must also sel at a price that recovers these cos but their selling prices are subject te the PST. Are the effects significant? Here are a few examples of the effective GST component in the final consumer price of selected producta: Houuehod furntun 7.M4S 4.40% smallm'ppflmnce 10.16 7.40 GInuw.re 6.13 3.72 TV, radio., steres 9.39 6.72 es 2yMa«ae 9.61 &545 aportng equipment 5.49 4.9s. In a competitive global (not just North American) marketplace, a producer cannot endure so great a compotitive disadvantage. Under GST, the effective tax - rate for al gIigi ble for >hone or in program. Principal, R. Hannah Principal, S. Todd Principal, P. Belsey Principal, G. Hanson Principal, P. Prentice * Please note "Parent Information Night" dates. AUl meetings cpnvene at 7:30p.m. .LA....IZ ...... The rnaun.wn izfauntf Auit wiÏ ltb salse enrotled. Dpsbeaêso domeatically produced, and a imported produceta (with few exceptions) will be seven per cent. The price (Including GST) of some producta may go up or down, but all will be treated equally. :While there are further reasons for change, Webster's letter raises a couple of other issues worthy of comment. There is an obvious connection between interest ratès, exchange rates and inflation" rates. Placating foreign investora is important but not necessarily because of a direct conection with Canadian production and Canadian jobs. That type of direct inveatment is made on the basis of long-termn considerations of many factors, not just short-term intereat rates. The aad truth is that we need foreign investors ta soak up our governinent debt. Without the short-term money provided by offshore investors, we could> not continue te fund $30-billion annual deficits (federal - the provinces are on a similar course of self-destruction). Pederal debt servicing costs (princ*fally intereat) exoeed the anuadeficit. It isa aryfact. that our governinent. would have! to run an operating surplusî exceeding $30-billion before there would be an y net reduction in our accumulated debt. Well, Webster, how do we do it - increase taxes further or decrease services >1or both? While I, too, may complain about governinent waste, it surely is a pipe dreain to think that there ia $30-billion that can be saved by. greater efficiency. With personal and corporate income tax rates already teo high, there is3 no room for increased income tax rates. With ail of the discussion concerning the GST, it js curlous that we have heard- few complainte about the EHT, the Employer Health Tax. - The explanation, no doubt, is that it ja not directly levied on individuals, onl1 businesses that pay saàlaries and wages. The EHT replaced..ý OHIP premiumsn. - many individuals therefore viewed the change as a decrease in direct taxation. Howýever, it is' an additional cost te employers. that must be recovered in the sellingr prices of their products and services. Consequently, the EHT bas the saine effect as a saes *tai, except that consumnera nxay not realize they are aynit.As a hidden tai., the 1ntr0ogoven ment may increase the rate with impunity. Labour-intensive producta and services have been hit the hardest. Those producere have a strong incentive ,ta produce outoide of Ontarjo or ta reduce payrolls by ubcontracting ta, self-employed individualib y replacing 'human beinaw th machines. In. my viewi,the EHT deserves'far more criticism than it bas received sa, far - and certainlyfar more criticiam than the hated GST. Because the EHTý is levied directly on ýpayroll, there ise only one way for employers te reduce the tai - reduce payrolls- - reduce employmient. Would you -care ta comment, Webster?, John G. Patte Tax Partner Sutherland Hobbe & partuers THE CORPORATION OF THE TOWN 0F WHITBY NOTICE 0F INTENTION STREET NAME CHANGE The Council of the Corporation of the Town of Whitby Intends to pass a by-Iaw ta change the naine of Bradview Drive to Bradford Drive. The change in street naine will applybail of Br adview Drive, on Regstered Plan 605, as shown below. The pwrpose of the change in street name la ta avoid any possible ibnfusion in naine that might arise between'Bradview Drive and Broadvlew Avenue. Broadvêew Avenue is locateri on the west side of Powell Road, south of Bradview Drive. L~~-~ U DUNDU -T The Planning and Development Committe of"Whitby Coundi ill meet on the evening of Monday, February 4, 1991, in the. Meeting Hall of the Municipal Building, 575 Rossland Road East, Whitby, for the purpose of hearing any person who cIain1s his or her land wîll be adversely. affected biy the by-law. Any persan wlahing to meet witii the Committaela asked to advise the Town Clerk accàôrcllngly no later than Thursday, January 31, 1991-. III '<'4i - Donald G. MdCCKa~in WhUIy, Ontario LI N 2M8 Plons: <416) 6684803 4~ THE DURHAM BOARD 0F EDUCATION REGISTER NOW for FRENCH IMMERSION KINDERGARTEN FOR SEPTEMBER 1991 effectvê to Septmbe............ s~oo oleIaMge rorm g.~~~~~~ ............rohes nd/o ~S~bO.I............. 0 Puils(whse arens rsice I 1 - 1 1, -êr' '.- ';.- - - « 1, , 1 ý ý - ý - , 1 - , 1.1 ý ze Q. à mon iý -il L