Tax rebates or GST cuts? Which is best? You decide...

Direct from "Reality Check" on cbc.ca...

Simply put, if you earn less than $10,000, where you pay no income tax, or over $100,000, then Harper’s GST cut can work for you. But if you’re single and earning something in between those two figures, then you look to be better off with the income tax cut and its corresponding increase in the basic personal deduction and federal refundable credits. Otherwise, you’d have to spend close to your entire income on consumer items to come out ahead.

For someone earning $40,000, for example, the projected income tax relief this year under the Liberals is $359. That same person would have to buy $35,900 worth of consumer goods or services to generate a similar $359 GST savings. And as one tax economist contacted by Reality Check put it, that kind of spending doesn’t leave much left over for rent and groceries.

The GST advantage realistically really doesn’t kick in until you hit the $100,000 bracket. Because then you would only have to spend a little over 40 per cent of your total earnings to get a larger return from the GST break.

Two income families generally do much better under the income tax cuts because both earners benefit from the increased deductions. But kids, of course, can skew the entire equation.