Ontario's controversial harmonized sales tax is "virtually revenue neutral" and not the cash grab critics say it is, argues a new report to be released Monday.
The report by the Canadian Centre for Policy Alternatives says low- and modest-income families will come out slightly ahead under the Liberals' HST package, which includes increased property and sales tax credits and income tax cuts, while households with incomes above $100,000 will come out just slightly behind.
"No group is significantly worse off or better off as a result of the province's HST plan," said Ernie Lightman, a University of Toronto economist and professor of social work who co-authored Not a Tax Grab After All: A Second Look at Ontario's HST.
Even the researchers admit they were "surprised" to find a vast majority of Ontarians will either be slightly better off or unaffected by the tax changes.
"Assertions that this is a tax grab have no foundation in reality," Lightman said.
It has to be remembered that there's an income tax cut going in place when the HST is phased in. What we are seeing here is small shift to comsumption taxes in lieu of taxing labour, a move I favour. It is believed this will help stimulate employment.
My little business will get to claim PST on inputs when the HST essentially merges the PST into the GST, when it could not do so before. That'll save me a little money too.
It's interesting to see the NDP position on this at odds with the lefty Canadian Centre for Policy Alternatives, but that's politics.
2 comments:
Although this HST will cause some short-term hardship during the transition period. There are a number of measures aimed at helping people with low-incomes.
First, there are transition cheques of $300 - $1000 in the first year. Second there are permanent income tax cuts for 93% Ontarians. As part of this 90,000 low-income earners will no longer have to pay personal income tax.
The experience in the Atlantic Provinces shows that cost savings to businesses were passed down to consumers. A recent report by TD Bank states that this will be the situation in Ontario as well – and will happen in the first year.
A report by economist Jack Mintz, “Ontario’s Bold Move to Create Jobs and Growth” confirms that Ontario needs to reform its tax system to create jobs and put Ontario back on its feet. It says, as a result of the HST, within 10 years Ontario would see:
o An estimated 591,000 additional new jobs
o Increased capital investment of $47billion
o Increased overall annual worker incomes of up to 8.8 per cent, or $29.4billion
The HST will help get people back to work and improve Ontario's economy - something that will benefit all of us.
Please visit: http://sites.google.com/site/thetruthaboutthehst/
Well, Mintz gets flack at times, but I liked his work on the carbon tax concept.
I'm not so sure that business will pass savings onwards. The study out East has caught flak as it is alleged that it failed to fully account for the fact the intro of HST out there was actually a sales tax reduction.
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