The Canadian Centre for Policy Alternatives (CCPA) has examined the HST and other tax reforms in Ontario, and determined that they are in fact, revenue neutral. This backs up what the OCC determined in our own research and refutes the claims by opponents that the HST is a tax grab. Here is an excerpt from the media release:
“No group is significantly worse off or better off as a result of the province’s HST plan,” says the study’s co-author, University of Toronto professor Ernie Lightman. “Assertions that this is a tax grab have no foundation in reality.”
Among the study’s key findings:
- increased sales and property tax credits combined with reduced personal income taxes combine to negate the regressive potential of the new HST;
- the net combined effect of all the changes – new HST plus sales/property tax credits plus personal income tax reductions – is very close to neutral, a $37 annual loss in income when averaged over all families in Ontario;
- Ontario families with the lowest incomes – below $20,000 – will be better off by around $90 on average; those with incomes below the Low Income Cut Off (after-tax), come out ahead by around $140;
- non-poor families will lose only about $60 per year on average;
- the richest families — with incomes above $100,000 — will be worse off by nearly $390 annually (approximately 0.2% of family income).
“The biggest concern is to ensure Ontario’s poor aren’t hit hard by the introduction of a new sales tax,” says co-author Andy Mitchell. “After looking at the numbers we find the interests of the poor are relatively well protected.”
