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HST will cost average family $521 more: Stats Canada

Two reports released today offer a contradictory picture of how the HST will affect the average B.C. family.

The Fraser Institute claims that most households will be better off under the new harmonized sales tax, and will pay between $72 and $403 in additional taxes each year. But those households earning less than $80,000 per year will earn back most of that in income tax and HST credits, according to the report, meaning the average family will pay about $44 more.

"Compare that to the $37,000 or so in taxes they are already paying, and it's a wash for the average Canadian family," Niels Veldhuis of the Fraser Institute told The Globe and Mail.

But compared to a model developed by Statistics Canada, at the request of the Victoria Times-Colonist, the average household can expect to pay an additional $521 under the new tax.

According to the Times-Colonist "a household with an annual income of $40,000 to $50,000 will pay $253 more because of the HST, while households in the $80,000 to $90,000 range will pay $1,128 more annually."

To arrive at those figures, Statistics Canada analysed 15 household types and 15 income classifications using a social policy simulations database and model, and applied all of the rebates, tax credits and rules of the HST and GST.

"There are certainly individuals and households that will feel the impact of this tax," Herbert Schuetze, economics professor at the University of Victoria, told the Times Colonist. "For example, if you are unattached and 65 years or older we're talking about $262 a year. That's a considerable amount of money for some people."

Colleen Kimmett reports for The Tyee.

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