Ottawa

Down with taxes, up with inequality

Stephen Gordon troubleshoots a proposal—championed by the New Democrats and Conservatives in Ontario, but also the federal NDP—to cut the sales tax on home heating bills.

Removing the HST on heating will cost a certain amount of money – apparently on the order of $350m. The share of those foregone revenues that will go to households in the highest income quintile is almost three times the share that will go to the low-income households that the measures’ proponents loudly insist are its focus. More than half of the money will go to people in the top 40%; only a quarter will go to the bottom 40%. As redistributional measures go, it’s more progressive than offering free yacht maintenance, but not as progressive as actually giving more money to those with lower incomes.

More from Livio Di Matteo.

Looking for more?

Get the Best of Maclean's sent straight to your inbox. Sign up for news, commentary and analysis.
  • By signing up, you agree to our terms of use and privacy policy. You may unsubscribe at any time.