Last week, a vendor sold an item for $10. With tax, that item costs $12. Let’s pretend a 50% markup (which is reasonable for retail but insanely high for groceries):
they made $5 profit
they recouped $5 for their costs
they collected $2 of tax for the government
Now the government has a GST holiday and there’s no tax. I went to the store and bought the item and it still cost me $12.
they made $7 profit
they recouped their usual $5 for their costs
they collected $0 of tax for the government
The main thing is that their costs for that item didn’t increase and they’re still selling it at its original ”final” price (because they added the tax amount to the sticker price). That tax savings went straight into profits. It was intended for the consumer to save money but the consumer is spending the same amount and the government isn’t getting anything. That money went somewhere.
i_stole_ur_taco@lemmy.ca 1 week ago
Last week, a vendor sold an item for $10. With tax, that item costs $12. Let’s pretend a 50% markup (which is reasonable for retail but insanely high for groceries):
Now the government has a GST holiday and there’s no tax. I went to the store and bought the item and it still cost me $12.
The main thing is that their costs for that item didn’t increase and they’re still selling it at its original ”final” price (because they added the tax amount to the sticker price). That tax savings went straight into profits. It was intended for the consumer to save money but the consumer is spending the same amount and the government isn’t getting anything. That money went somewhere.
x00z@lemmy.world 1 week ago
That wouldn’t pass consumer protection laws in my country.
If they were honest, my claim still stands.
If they are not, well, then it’s probably against consumer laws in Canada too.