B.C. HST means mostly lower taxes: study

B.C.'s unpopular new HST will mean lower taxes for most low- and middle-income families, according to new study released on Monday.

Niels Veldhuis, a senior economist with the Fraser Institute, says that despite the widespread perception that it will raise tax rates, the Harmonized Sales Tax will actually reduce the taxes paid by most families that earn less than $80,000 per year.

"Lower-income families will pay less in taxes and higher-income families will pay slightly more, so we're making the tax system more progressive," Veldhuis told CBC News on Monday morning.

According to Veldhuis, once recent provincial income tax cuts are factored in, on average a B.C. family will pay $44 a year more in taxesin 2011, afterthe HST replaces the GST and PST on July 1.

"The claims of large tax increases and other distortions spread by opponents of the HST have no foundation in reality and are not backed up with reliable data or sound analysis," Veldhuis said.

"The truth is, low-income families will be better off under the HST," he said.

Opponents of the HST have collected more than 600,000 signatures on a province-wide petition in an attempt to have the tax repealed.

Ken Georgetti, president of the Canadian Labour Congress, said public backlash over thenew sales taxis still growing, and he believes the introduction of the HST will likely cost Premier Gordon Campbell and the B.C. Liberals during the next election.

"My sense is that people feel they were lied to or misled and I think Mr. Campbell and his party are going to pay for that dearly," Georgetti told CBC News.