Media Power in Politics

[Typhoid]

This thread was sparked by something I heard on the radio this morning.

So I've always had a "People will make an informed decision" stance rather than a "People will go with what they believe is popular opinion".

So many many years ago in British Columbia we had a cascading tax system. Very outdated, very poor for the consumer. That was changed some years ago to a harmonized tax (HST), where not only some (seemingly random) things were tax exempt (baby items, bikes, bread). Lower income people and the elderly were given quarterly HST rebate cheques of (up to) about 150 every 3-4 months to offset the tax.

Now, for the past few months there was debate (raised by restaurant owners) that the HST was bad for business. When really, the only thing the HST was bad for was restaurant revenue,because they couldn't gouge prices and hide them in the tax system. Lo and behold some snazzy radio and TV ads were made saying how terrible the HST is for the economy,and how nobody is prospering with it. So it was put to a simple vote, keep the HST, or go back to the PST/GST.

And the wise wise idiots (aka: general public) in my Province decided it was a better idea to go back to the PST/GST. So now not only does BC have to give back some 30 million dollars (I believe) to the government (that was given to put the tax in place), and not only do the elderly and low income families not receive HST rebates anymore, and not only is every food item ridiculously taxable again, but the BC government now has to re-hire the entire faculty that dealt with the PST/GST (as they were let go, considering they were obsolete), which will cost some significant number in the millions, but our government is now also going to be vastly more beaurocratic.

Praise the power of media.
I weep for the future of my Province.

[Angrist]

I was so sure this thread was going to be about the British media scandals.

[Bond]

Mind explaining this cascading tax system a bit more? I tried to google it, but there doesn't seem to be much information on the internet. If I'm right, basically products were taxed at each stage of their life cycle? And the harmonized tax is basically a value-added tax, where only the value-added at each stage in the development process is taxed?

If that's the case,

Cascading tax = No sense

Harmonized tax = Some sense

[Typhoid]

If I'm right, basically products were taxed at each stage of their life cycle?

Indeed.
(wikipedia: )

A cascade tax or cascading tax is a turnover tax that is applied at every stage in the supply chain, without any deduction for the tax paid at earlier stages. Such taxes are distorting in that they create an artificial incentive for vertical integration.

I was so sure this thread was going to be about the British media scandals.

Enh. It can be whatever you like. Really, I just wanted to bitch about how commercials swayed public opinion to vote for higher taxes (by voting out the lower tax system) without even realizing exactly what it is they were voting for,and how completely dumb I find that.

[Professor S]

I'm not sure I would agree that the cascading system encourages restaurant owners to "gouge" consumers, per se, but I definitely agree that hiding consumer taxes in a cascading system is not a good way to run things.

After reading about this, I have to say I don't think media bias is as much at play here as sticker shock. Unless I read it wrong, the HST is basically a tax directly to the consumer, and visible to the consumer, and the PST was hidden. In the end consumers were likely taxed the same or even less, but on face value it appears they are paying more because the consumer is directly exposed. Arguments to keep the HST would have a difficult time overcoming a reactionary public.