Spreading the GST – a message from Canada

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Joshua sent through the link to the following article. Judging by the comments, Joshua colleague Michael is now hiding from the lynch mob. But they have a good point. Like Australia, the Canadian GST involves a variety of distortions that are defended in the name of equity. But in reality they benefit both the rich and poor.

Making the GST more inclusive need not hurt the poor if it is linked with other tax reform. And a GST can be inclusive without the sky falling in. Just ask our friends across the Tasman. The rules for New Zealand exemptions are summarised here. Notice that the book, food, etc exemptions found in Australia and Canada are absent in NZ. But financial services are exempt – if someone knows why please let me know!

 

One Response to "Spreading the GST – a message from Canada"
  1. If we included food etc in the base for the GST, it could pay for the Gonski review or the national disability insurance scheme. 

    I think the argument for excluding financial services is that it was easier to input tax these. 

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