Tax Reform: Liberal’s Harmonized Tax to Hit Consumers Hard

Consumers will now feel the effect of a proposed tax change that will be taking place in Ontario and British Columbia while businesses save $6.9 billion.  Beginning on July 1st, 2010, consumers will now face the burden of taxes having a jump of 1.5 percentage points on the tax rate of consumption.  Consumers will be paying higher taxes for goods and services ranging from haircuts to the purchases of new homes.  The money that companies will be saving is supposed to result in a price drop in the goods being sold to consumers, but the lower prices will not compensate for the higher taxes.  Ontario PC leader Tim Hudak said, “...the Dalton Sales Tax... is a permanent tax grab that will result in higher prices on the things we buy with no immediate benefit to consumers.”  Once the PST and GST are combined, the new tax will be 13% in Ontario, and 12% in British Columbia.  Businesses will be able to claim rebates which will result in huge savings, but consumers will end up paying the new tax on goods and services currently exempt from taxes.

Source:  http://www.theglobeandmail.com/news/national/harmonized-tax-to-hit-consumers-hard/article1293989/