Misleading as it may be, the rhetoric of the Don't Tax Reading Coalition, which is what the publishers and booksellers call themselves when in pursuit of special treatment, is also remarkably effective. Which helps to explain why the more the federal government tries to simplify the GST, the more complex it becomes.

Canada now has five provinces with two separate and uncoordinated sales tax regimes, federal and provincial; three in Atlantic Canada, as of next April, with a single, "harmonized" federal-provincial sales tax; one, Quebec, with two separate taxes, but on a harmonized base; and one, Alberta, suffering under just the federal sales tax, the province being an abstainer from such levies itself.

But that only begins to describe the confusion. In seven provinces, the GST will continue to be applied on top of the advertised retail price, as it should: in the three Atlantic harmonizers, it will now be hidden in the price, the better to persuade voters the Liberals have "scrapped" the tax. Where previously retailers and consumers had only to deal with four separate possible pricing regimes -- on some goods and services both provincial and federal sales taxes apply, some bear one but not the other, and some are exempt from both -- two more have now been added, depending on whether the posted price is tax-inclusive or tax-exclusive.

Then there's the matter of books. The GST applies to books; the PSTs do not. Now, bowing to the unceasing complaints of the book industry, the federal government has allowed the Atlantic provinces to rebate the tax to booksellers, and followed that with a nationwide exemption for certain large institutional buyers of books. Under the new, "simplified" sales tax regime, then, the tax you pay will vary depending on what province you live in, what sort of thing you are buying, and what kind of purchaser you are.

On those rare occasions when the book industry folks are asked to explain why they should be exempt from a tax the rest of us are expected to pay, they almost never reply with the truth -- "this way, we'll make more money" -- preferring instead to haul out their hankies over the GST's alleged effects on literacy. But before we accept that there is such a link, it might be interesting to trace the intermediate steps.

It would be worth knowing, for starters, whether it is indeed the price of books that is the barrier that separates the illiterate from the pleasures of reading, and if so why the 7% GST should make the difference where a $39.95 list price does not. As a proxy, we might inquire whether sales of books have collapsed since the GST was introduced; or at the very least, whether the blight of illiteracy has indeed spread since that fateful day.

The first two questions I cannot answer; but as to the latter questions of fact, the figures are clear. There was no catastrophic decline in book sales after the GST: contrary to publishers' predictions of a falloff of 25 per cent or more, domestic books sales decreased by less than one-half of one percent in 1991, a recession year -- as compared to a 6 per cent decline in retail sales as a whole. Since then book sales have continued to grow, albeit slowly -- though publishers may be comforted by the tripling of exports in that time.

As for illiteracy, here again the GST appears to have had no effect. On both the original 1989 test of Literacy Skills Used in Daily Activities (LSUDA) and the 1995 International Adult Literacy Survey (IALS), Statistics Canada found roughly the same number of Canadians, about 16 per cent, were functionally illiterate. The number of those classed as having limited reading skills increased, but only marginally, from 22 per cent to 24 per cent. As the agency notes, "when LSUDA was designed in the late 1980s, there was a broad concern in Canada that the levels of literacy in the general population were in a kind of "free-fall". When compared with LSUDA, the IALS report shows that literacy skills at the low end have effectively stabilized in Canada's population." Even if we accept the publishers' suggestion that illiteracy is a function of the price of books, that does not lead automatically to the conclusion that they should be exempted from GST. Publishers pay income tax, too, which you may be sure finds its way into the price of books. Should we, then, exempt them from income tax? Or perhaps, rather than torturing the tax code, there is a simpler, more direct solution to the plight of the illiterate: Give them books, and teach them to read them.

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