Modified Sales Tax (MST) to replace HST: surplus will reduce taxes

The Value Added Tax has many names. In Canada we call it the HST. The HST is one of the few policies that is universally endorsed by economists. They value its efficiency and the boost it gives to the economy. In the last few decades, more and more countries have adopted an HST.

When British Columbia enacted its HST, 130 out of 193 countries in the world had it. In 2013, British Columbia became the only jurisdiction in the world to move backward from the more modern tax to the more primitive one. Since that time, in the last four years, 40 more countries have moved to an HST.

Today, 170 out of 193 countries in the world have an HST. British Columbia shares a place with countries like North Korea, Libya, Yemen, Myanmar as places without an HST. The only major economy holdout is the USA.

Sam Sullivan is proposing a Modified Sales Tax that keeps all of the advantages of the HST but exempts more goods and services used by low income people.

The harmonized sales tax was removed after a referendum. There was much debate and opposition over exemptions and rates, which is explained.

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