Friday, May 14, 2010

Hellacious Sales Tax

Priceless…no other word will do.

The Toronto Star reports that the price of wine and spirits will not go down on July 1, despite the fact that Ontario will drop its 12 percent tax on alcohol and replace it with the 8 percent Harmonized Sales Tax. In fact, it looks like prices will go up because the LCBO will increase its mark-up on liquor to more than make up for the tax decrease.

Why? According to the article, the LCBO says that it is its “social responsibility” to do so. Apparently, drinking alcohol is still a sin in Ontario. Yes, God forbid that the LCBO pass on the price decrease from the tax change and lower the price of (one example from the Star) Pelee Island VQA Chardonnay from $17.95 to $17.35. Because then we’d be able to buy 29 bottles of the VQA wine instead of 28 for the same price! Instead, the price will go up to $18.05. Yeah, 70 cents more for a bottle of wine…that’ll cure the problem of alcohol abuse.

Or is it that the government looked at the shortfall from replacing the alcohol tax with the HST [yikes!] and told the LCBO to (more than) make up the difference in government revenues by raising prices?  That seems to be the case in BC, which is also introducing the HST on July 1.  OK, but if you're making a revenue grab, don't hide behind the skirts of "social responsibilty". 

One of the strongest arguments made on behalf of the HST is that it will lower the cost of doing business in Ontario and that should mean cheaper prices. As the Star quotes Premier McGuinty, “I’m just saying in a competitive world, you’re going to want to pass along the savings.” Ah, yes, in a competitive world. But having a monopoly? Priceless.

Subscribing to this blog through RSS or email is easy! Just click on the subscribe link to the left ←

No comments:

Post a Comment