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