Economics 2160A/B Lecture Notes - Lecture 23: Hearing Aid

• School: Western University
• Department: Economics
• Course: Economics 2160A/B
• Professor: Emilie Rivers

Document Summary

Broad-based sales tax that applies to most goods and services: 1. Gst (federal sales tax): goods and services tax 5: 2. Rst/pst {retail sales tax // provincial sales tax} In ontario, it was 8: base of gst somewhat broader than pst, 3. Hst (now): harmonized sales tax: gst + hst = 13, federal government collects all of it (13%), then remits pst back to. Gst/hst are treated and computed at value-added tax provinces. Tax an item at each stage of production according to the value that stage adds to the final product. *multi-stage sales tax we tax the various stages as opposed to taxing it at the end (taxing it to the end user single stage tax) Taxing grocer on 10% of sales: 10% of ,000 = . Lo(cid:449)er ad(cid:373)i(cid:374)istrati(cid:448)e (cid:272)ost to the go(cid:448)er(cid:374)(cid:373)e(cid:374)t (cid:894)(cid:271)e(cid:272)ause the(cid:455)"d (cid:271)e getti(cid:374)g it o(cid:374)(cid:272)e(cid:895) Reduces tax evasion (both in terms of payment/lost revenues and administrative costs) Because, in canada, we use an invoice-credit system.