William Watson: Liberal GST holiday fiasco may lead to tax sanity

financialpost.com:

Is everybody out there enjoying their GST/HST holiday? I can think of one person who isn’t. This gift to Canadians from on high was supposed to endear them to the prime minister who commanded it but seems instead to have persuaded most of us we’ve had enough with policy gimmicks and at least one politician who resorted to them once too often. He’s now out on his ear. Let’s hope other politicians and their oh-so-clever policy “strategists” take note.

One saving grace from what is otherwise a policy disaster: as Canadians lined up in mid-December to return items they’d bought before the tax holiday so they could re-purchase them without GST/HST, they had a chance to reflect on the shortcomings of a tax system, any tax system, that operates according to fine distinctions.

“Pay tax today, don’t pay tax tomorrow” (or vice versa) has the obvious effect of moving purchases from today to tomorrow (or vice versa). If the big brains running policy can be sure it would be better to have spending take place tomorrow rather than today (or vice versa), then I suppose that can make sense. By and large, though, we’re better off if Canadians decide for themselves when is best to buy this or that item.

Any tax break, however long, will also reduce the total tax people pay. That may increase the total amount of consuming they do. Which is nice. And good, as well, if for some reason you think Canadians generally aren’t consuming enough. (Where is the evidence of that? What would be acceptable evidence?)

But then, in mid-February, we all have to go back to real life. What’s the point? We’re teased with a taste of how things could be without the taxes nobody likes that finance the public services everybody supposedly loves. But only teased.