While Anti-HST campaigners are getting ready for recall campaign where they will target several BC Liberal MLA’s in effort to get rid of HST tax scholars and economists are pretty confident that if Anti-HST campaign succeed in scraping a tax that BC would be disadvantage to the rest of Canada. In effort to make everyone happy SFU scholar, Jon Kesselman, proposes new approach to the “hatered” tax. Kesselman thinks that BC government should reduce provincial part of the HST from seven per cent to six per cent and lover the total HST rate at 11 per cent. One per cent reduces will help government to avoid resurrection of PST, repay of $1.6 billion in funds transferred from federal level…

“The HST is forecast to generate $3.8 billion for the BC treasury this fiscal year. Cutting the HST by one percentage point would reduce revenues by $540 million. Those lost revenues could be replaced by moderate hikes in other BC taxes”, writes Kesselman.

In his opinion even tilting the tax hikes towards corporate income taxes would be less harmful for the provincial economy than the effects of reinstating the PST. Usage of recently announced $2.7 billion improvement in BC budgetary balance as a way to cover an HST rate cut would be more politically palatable way thinks Kesselman.

“Of course, this choice would be at the cost of lower program spending or slower deficit elimination. Pursuing an HST rate reduction in BC’s spring 2011 budget could fundamentally transform the grounds for the referendum”, points Kesselman.

This idea also trigs a question which option would be more acceptable for BC citizens – reduce of program costs or slower deficit elimination. Budgets for many programs are already significantly reduced and many of them are in peril because of high provincial deficit. Even with current government plans is not sure when a budget deficit will be eliminated, so probably this idea would be more considerable for public and for the opposition party in BC Assembly.

Referendum will be held in exactly one year and Premier Campbell said that there is possibility to move that date little bit earlier in effort to please public who supported Anti-HST campaign with more than 700,000 signatures. Chief Electoral Officer would prepared a referendum question in upcoming months but Mr. Kesselman thinks if both sides accept one percentage point reduce that referendum question can be formulated in a form to ask a citizens if they would accept reduce on 11 per cent. It’s not clear if Anti-HST movement or BC government would be prepared to accept this form of exchange of HST situation but if both sides are open to negotiate and to talk its worth to try.