On the Incidence of the Manufacturers' Sales Tax and the Goods and Services Tax
In April 1989, the federal Minister of Finance announced plans to implement the Goods and Services Tax (GST), an invoice- based value-added tax, as a replacement for the present Manufacturers' Sales Tax (MST). One of the stated reasons for this change was the concern about the regressivity of the MST. The purpose of this paper is to investigate the distributional effects of replacing the MST with the GST. Baum's Relative Share Adjustment (RSA) is used to estimate the incidence of the MST, a broad-based VAT and the GST, assuming 1986 revenue and consumption patterns. The results show that the VAT and, to a lesser extent, the GST are more regressive than the MST. This distributional shortcoming of the GST can be corrected through a low income credit financed either by a high income surtax or a higher GST rate.
Year of publication: |
1990
|
---|---|
Authors: | Ruggeri, G. C. ; Bluck, K. |
Published in: |
Canadian Public Policy. - University of Toronto Press. - Vol. 16.1990, 4, p. 359-373
|
Publisher: |
University of Toronto Press |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
The Incidence of Low Income among the Elderly
Ruggeri, G. C., (1994)
-
Ruggeri, Giuseppe Carmelo, (1992)
-
On the incidence of the manufacturers' sales tax and the goods and services tax
Ruggeri, Giuseppe Carmelo, (1990)
- More ...