Many years ago, I encountered a prosperous attorney who was (and probably still is) pushing for a national sales tax covering all goods and services. This was before Bush’s tax panel outlined in some detail the exhorbitant rates that would need to be applied if such a tax was intended to replace the federal income tax, but I had a general sense that it wasn’t a workable replacement. So I asked this lawyer whether he intended that such a tax would cover legal services. He said that he really hadn’t made up his mind about that.
There are good arguments why legal services oughta be exempt, but the same can be said about all other services and all goods, too. So I was kind of pleased to note that the Province of Ontario will now apply the 13% “harmonized sales tax” to legal services, while continuing to exempt newspapers and shoe repairs. (British Columbia will do the opposite.)
The thing with the sales tax is that every product can argue exemption – and they’d be right.