Implications of the Introduction of the Goods and Services Tax for Families in Canada
We use the Quadratic Almost Ideal Demand System and the Canadian Family Expenditure Survey to investigate the welfare change for households, particularly those with children, attributable to the introduction of the Goods and Services Tax (GST) in Canada. We calculate the welfare change by estimating the expenditure difference necessary to maintain pre-GST indirect utility. We find that two in three households and one in three low income households were made worse off by the introduction of the GST. The figures are similar for households with children. More specifically, the stated policy goal of increasing the welfare of low and middle income households was not achieved.
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Volume (Year): 36 (2010)
Issue (Month): 4 (December)
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References listed on IDEAS
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- Paul Blacklow & Ranjan Ray, 2002. "Optimal Commodity Taxes in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 35(1), pages 45-54. Full references (including those not matched with items on IDEAS)
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