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article imageOntario residents to receive provincial income tax cut January 1

By Andrew Moran     Jul 17, 2009 in Politics
To offset the initial costs of the new 13 per cent Ontario Harmonized Sales Tax, effective July 1, 2010, Ontarians will receive an income tax cut on January 1, 2010.
On Jan. 1, 2010, Ontario residents will receive an income tax cut to feel less pain when the new 13 per cent harmonized sales tax becomes implemented that will be effective in July, 2010.
Revenue Minister John Wilkinson told the Toronto Star before a cabinet meeting at Queen’s Park, “The single most important thing we can do (to help the economy) is to get rid of having this ... duplicate sales tax system and substantially cut income tax for people, for small business, and for large businesses as well.”
These tax cuts were announced in March 26's budget by Finance Minister Dwight Duncan. Ontario’s first quarter economic output showed that the economy contracted by 2 per cent. Both the United States and Canada’s economy shrank by 1.4 per cent.
Mr. Wilkinson believes this income tax will be worth $1.1 billion and will help the economy. Taxes on the first $36, 848 will drop from 6.05 per cent to 5.05 per cent. However, the new harmonized sales tax will mean that items and units such as: gasoline, dry cleaning, fast food, heating, magazines, etc. will now be taxable.
Furthermore, the provincial government will be handing out three transitional rebate cheques to help adapt to the new sales tax system. Families earning a combined household income of $160,000 will receive $1,000 and single income earners who make up to $80,000 will receive $300. The federal government will give Ontario $4.3 billion to help cover these rebate and miscellaneous costs.
The new system is supposed to level the playing field with other provinces such as Quebec and New Brunswick.
More about Ontario, Harmonized sales tax, Income tax
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