This in-depth analysis of Ontario's proposed Harmonized Sales Tax (HST) shows the tax is virtually revenue neutral when viewed as part of a total tax package that includes increased sales and property tax credits and a significant decrease in personal income tax rates.
As a result of reviews following the initial release of the paper, technical issues with the analysis were identified and the paper revised. In addition, the paper as initially released suggested certain conclusions that do not flow from the analysis. However, the central result— that the tax credits and tax cuts have the effect of offsetting the impact of the increased HST revenue for low-income and moderate-income families and of moderating the impact for other families—holds. This is an updated version (January 6, 2010) of the report first released December 14, 2009.