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Lessons in Harmony: What Experience in the Atlantic Provinces Shows About the Benefits of a Harmonized Sales Tax

Author

Listed:
  • Michael Smart

    (University of Toronto)

Abstract

Provincial retail sales taxes are remarkably high on business inputs, including purchases of capital goods that spur growth in productivity and employment. Evidence from Eastern provinces with a Harmonized Sales Tax (HST) suggests that harmonizing provincial sales taxes with the federal GST would eliminate most of this distortion, without leading to an increase in consumer prices.

Suggested Citation

  • Michael Smart, 2007. "Lessons in Harmony: What Experience in the Atlantic Provinces Shows About the Benefits of a Harmonized Sales Tax," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 253, July.
  • Handle: RePEc:cdh:commen:253
    as

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    File URL: https://www.cdhowe.org/public-policy-research/lessons-harmony-what-experience-atlantic-provinces-shows-about-benefits-harmonized-sales-tax
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    References listed on IDEAS

    as
    1. John Piggott & John Whalley, 2001. "VAT Base Broadening, Self Supply, and the Informal Sector," American Economic Review, American Economic Association, vol. 91(4), pages 1084-1094, September.
    2. Bird, Richard M. & Mintz, Jack M. & Wilson, Thomas A., 2006. "Coordinating Federal and Provincial Sales Taxes: Lessons From the Canadian Experience," National Tax Journal, National Tax Association;National Tax Journal, vol. 59(4), pages 889-903, December.
    3. Patrick Blagrave, 2005. "An Analysis of the Impact of the Harmonized Sales Tax on Provincial Revenues in Atlantic Canada," Canadian Public Policy, University of Toronto Press, vol. 31(3), pages 319-332, September.
    4. Bird,Richard & Gendron,Pierre-Pascal, 2011. "The VAT in Developing and Transitional Countries," Cambridge Books, Cambridge University Press, number 9781107401440, April.
    5. David Murrell & Weiqiu Yu, 2000. "The Effect of the Harmonized Sales Tax on Consumer Prices in Atlantic Canada," Canadian Public Policy, University of Toronto Press, vol. 26(4), pages 451-460, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Richard M. Bird, 2012. "The GST/HST: Creating an Integrated Sales Tax in a Federal Country," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 5(12), March.
    2. William B.P. Robson, 2007. "Time and Money: The Challenge of Demographic Change and Government Finances in Canada," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 109, December.
    3. Kathleen E. Macmillan & Patrick Grady, 2007. "A New Prescription: Can the BC-Alberta TILMA Resuscitate Internal Trade in Canada?," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 106, October.
    4. Jack M. Mintz, 2007. "2007 Tax Competitiveness Report: A Call for Comprehensive Tax Reform," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 254, September.
    5. William B.P. Robson, 2008. "Safe Harbours: Providing Protection for Canada's Money-Purchase Plan Sponsors," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 110, January.
    6. Colin Busby & William P.B. Robson, 2009. "Equipping Ourselves in Tough times: Canada's Improved Business Investment Performance," e-briefs 83, C.D. Howe Institute.
    7. David Johnson, 2008. "School Grades: Identifying British Columbia's Best Schools," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 258, February.
    8. John Richards, 2007. "Reducing Poverty: What has Worked, and What Should Come Next," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 255, October.
    9. Finn Poschmann & Alexandre Laurin, 2011. "The Time is Still Right for BC’s HST," e-briefs 119, C.D. Howe Institute.
    10. Charles Freedman & Clyde Goodlet, 2007. "Financial Stability: What It Is and Why It Matters," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 256, November.

    More about this item

    Keywords

    tax reform; retail sales taxes;

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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