Killing harmonized sales tax will hurt provincial economy
CALGARY, May 31, 2011 /CNW/ - In a communiqué released today by The
School of Public Policy, Professor Jack Mintz analyzes the recently
proposed changes to the BC HST and compares their potential impact
against the impact of simply scrapping the HST.
The bottom line? If voters kill the HST, BC's economy will suffer in
the long run. The retail sales tax will have to be reintroduced,
leading to steep increases in the marginal effective tax rates on
capital and costs, and a dip in investment and job creation.
On the other hand, if the HST is retained, the government's new
proposals will reduce the tax by two points and raise the corporate tax
to bridge the revenue gap. This will also negatively impact corporate
competitiveness, but since the government has indicated this tax
corporate hike would be temporary, retaining the HST is the best option
for the BC economy.
The communiqué can be found at www.policyschool.ca under "latest papers."
SOURCE University of Calgary - School of Public Policy
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