The HST Facts vs Dan Lett, HST Defender
Those were the days when you assumed reporters were "professionals" who researched their stories before writing them. Oh, and they had editors who made double sure everything was accurate and true. Right?
Then -- damn you Al Gore --- came the Internet.
And, suddenly, people could actually check the so-called "facts" in the newspaper for themselves. And, whoops, it appears the "professionals" were making up a whole lot of what they wrote, editors or no editors.
Enter Winnipeg Free Press columnist Dan Lett, who has taken to imagining himself a commentator on national issues.
"The debate over the HST is not intelligent or rational." he wrote. Got that? You anti-HST crusaders are stupid AND irrational.
To demonstrate his own smarts, Lett decided to give the fools a lesson in economics.
"The HST, a revenue-neutral tax that ultimately has the potential to save consumers money, doesn't really deserve to be on that list. An intelligent debate would have revealed that."
Maybe Lett should have actually read the "recent study by economists at the University of New Brunswick" before citing it to bolster his argument. It's not hard to find --- on the Internet. We found it and read it, along with a subsequent report from the C.D. Howe Institute.on the consumer effects of the HST.
Both studies tried to determine if the adoption of the HST in Newfoundland, New Brunswick and Nova Scotia in 1997 reduced costs to consumers.
Now, not being university eggheads, we would have answered the question the same way you would --- we would have asked our mothers.
Mom, did prices go up or down after they brought in the HST?
How would academics do it? For the answer we turn to the study:
The Effect of the Harmonized Sales Tax on Consumer Prices in Atlantic Canada
DAVID MURRELL AND WEIQIU YU
Department of Economics
University of New Brunswick
Fredericton, New Brunswick
Okay, have you got that, or do we have to repeat it?
So after the proper smoothing, adjusting, estimating and applying the proper counter-factual procedure, the professors reached a conclusion.
"...overall, consumer prices fell given the new HST regime."
What Experience in the Atlantic
Provinces Shows About the
Benefits of a Harmonized Sales Tax
Author Michael Smart concluded "...overall, CPI prices fell by about 0.3 percent in HST provinces after 1997, compared to the corresponding change in RST provinces."
Got it? Prices in the HST provinces after two years were a gi-montrous three quarters of one percent less than prices in the other provinces with their own sales taxes. Well, whoop dee doo.
"This difference" wrote Michael Smart, " is statistically insignificant..." You don't need a PhD to know that, brother.
Professors Murrell and Yu said their analysis didn't examine that possibility, although they concluded:
"...it could be the case that certain income groups, in particular, low-income families, might do worse given the move to harmonize sales taxes."
Michael Smart, however, did the math.
"Particularly notable, perhaps, are the estimated 1.4 percent price increase for Shelter, reflecting the extension of the tax base to include purchases of new houses, and 1.5 percent price increase for Clothing and Footwear, which also likely reflects the broader base of the HST. Since expenditure shares for these categories tend to be larger for low-income households, this suggests the possibility that the reform was regressive in that it raised average prices for low-income households while lowering prices overall."
"Thus I conclude that the HST reform had a mild regressive effect."
Or is that not intelligent or rational enough for "professional" journalists to understand?