On March 26, 2009, Ontario Finance Minister Dwight Duncan tabled the provincial budget, the centrepiece of which was a new ‘harmonized’ sales tax (HST). This decision meant that the separate provincial (8%) and federal (5%) sales taxes would be combined into a single tax (13%). Beginning July 1, 2010, Ontario will follow the lead of three Atlantic provinces (excluding PEI) and, with slight variation, Quebec. Soon after Duncan’s announcement, British Columbia announced that it, too, would be going down this path. For most of the public, the big news event was that the new harmonized tax would be largely built on the base of the federal GST. The new sales tax would be extended to many items such as services and home heating fuels that had been previously exempt under the old provincial sales tax (PST), increasing the amount of sales tax consumers will pay. However, Duncan also announced that there would be new property and sales tax credits, analogous to the federal GST credit, intended to offset the effects of the new levy for those with middle and lower incomes. He also introduced Not a Tax Grab After All: A second look at Ontario’s HST a sweeping set of personal income tax (PIT) reductions to further offset the new tax. There was also transitional financial assistance, designed to last three years, to buffer the move to the new system. However, almost no one paid any attention to these supportive measures. As one would have expected, the announcement was immediately condemned by the antigovernment, anti-tax lobby using the now-standard emotive language of “confiscation” and “tax grab” and summarized by assertions like “No tax is a good tax” and claims that “the Liberals are stealing your money”. Initial responses from many observers, including ourselves, were conditioned by the relationship between sales taxes and people’s ability to pay as measured by income. Because lower income households spend a larger proportion of their income on taxable goods and services than do higher-income households, sales taxes in general are regressive. The effective rate of tax goes down as income increases. On its own, then, the HST transfers resources away from low-income households. And it does so at the worst possible time, on the tail end of a recession.