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In the last few years, the Federal government cut the GST (the federal sales tax on goods and services which Ontario later blended into the PST to create the HST) by two percentage points. The federal government could have transferred this cut to income taxes instead, i.e. it could have decreased taxes on income instead of on the GST. Sources of income that taxes are paid on include labour (work) as well as investment earnings. Assuming that taxes are to be cut, which tax cut do you believe is more beneficial for long run economic growth, a GST/HST reduction or an income tax reduction? Assume that either of the reductions would be revenue neutral, i.e., the federal government would forfeit the same amount of revenue with either tax that is cut. You are to back up your argument with sound economic reasoning and concepts that you have learned in this course. You are quite welcome and encouraged to utilize outside sources. Please be sure to reference your sources. Your assignment should be about 500 – 750 words in length. Feel free to use graphs in your paper. Please have this assignment completed before 11:59 pm on Wednesday April 5 in order to avoid a late penalty. Please submit your assignment through the “Assignments” section of Blackboard for this course. Please do not send it through email or hard (paper) copy.
This is an individual assignment, i.e. you are to work independently on it.

Category: Essays

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