Residents of British Columbia recently voted 55% in favour of scrapping the Harmonized Sales Tax (HST), introduced in July 2010. Since the HST is a highly visible, in your face, daily encountered tax, have Ontario voters been more silent but will be just as deadly in the upcoming provincial election?
According to the paper “Impact of HST on Ontario and British Columbia Households by Income Quintiles” written by David Murrell, the average Ontario family will pay $289 annually in taxes by the third year of HST implementation. This is 172% higher than the $106 projected by the Ontario government. The HST, before other credits, affects poorer families more, representing 1.95% of disposable income in the first income quintile compared to 1.42% in the fifth quintile.
Below is a chart extracted from Murrell’s paper showing consumer items that are newly HST taxable in Ontario. The total extra sales tax is $793 per year for the average family, and we’ve broken it out by item. Keep in mind, however, that the chart below reflects the gross amount owed; reduced income taxes and estimated pass-through savings are expected to bring the net amount owed to an average of $289.