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BC Politics

The BC Liberals’ Budget Misfire

We’re paying less in taxes. So why is leader Andrew Wilkinson so unhappy?

Paul Willcocks 20 Feb 2020 | TheTyee.ca

Paul Willcocks is a journalist and former publisher of newspapers, and now an editor with The Tyee.

The BC Liberal response to this week’s provincial budget was predictable and disappointing.

Another “tax and spend” budget, grumbled Andrew Wilkinson and company, who were particularly incensed about a move to levy the PST on Netflix.

The Province newspaper kicked it up a notch with the headline “Sneaky Tax Grabs Highlight Business Unfriendly Budget.”

Under the headline, columnist Mike Smyth warned that a new income tax bracket for the top one per cent of earners means the New Democrats “risk B.C.’s competitive advantage by hammering business professionals who make multimillion-dollar investment decisions.”

Catchy, but not credible.

The new tax bracket raises the rate on income above $220,000 from 16.8 per cent to 20.5 per cent. Someone making $500,000 a year will pay an extra $10,300. Someone making $300,000, an extra $2,960.

Not many people like to pay more taxes. But the notion that a “multimillion-dollar investment decision” would be based on whether a handful of people in a company have to pay a few thousand more in taxes betrays a basic lack of business knowledge.

A competitive tax regime could matter in terms of attracting hard-to-recruit talent from outside the province, a potential factor in investment decisions.

But B.C. is extremely competitive. For a two-income family with two children and a household income of $200,000 a year, B.C. has the second lowest total provincial taxes in Canada.

Alberta has the lowest taxes, a reflection of its barking mad fiscal policy. The province is on track to reach an $8.7-billion deficit this year, but won’t raise taxes. In this $200,000 bracket, affluent Albertans pay 40 per cent less than the Canadian average — and pass on the resulting deficits to their children and grandchildren.

But B.C. is more than competitive with the rest of the provinces. The $200,000 family would pay 23 per cent more in taxes in Ontario, for example, if their employer chose to locate there. And the B.C. taxes are 27 per cent below the Canadian average.

The BC Liberals were also worked up about a provision to apply the provincial sales tax to Netflix, I suppose because “Netflix tax” works well on social media and plays to some perceived populist base.

The Liberals didn’t explain why the U.S. giant should be exempt from the tax simply because it has avoided setting up offices in Canada, while competitors based here are required to charge it. Nor why the cost — less than $12 a year — is so critical to the British Columbians’ futures that it should be a key element of the party’s budget messaging.

Despite the “tax and spend” rhetoric, the reality is that most British Columbians are paying much less in taxes and fees than they did under the BC Liberals.

The budget documents include tables on the impact of taxes on various individual and family groupings with different incomes.

For a two-income family of four with a $90,000 income, total provincial taxes — income, fuel, sales tax, property tax — will be $6,072 this year.

In 2017, the last year of BC Liberal government, the family paid $9,796. So today they’re $3,700 ahead.

A senior couple with $40,000 in pension incomes will pay $2,800 this year. Under the BC Liberals, they paid $3,121. (And, actually, that was based on $30,000 in income.)

A single person with $80,000 in income will pay $7,299 under this NDP budget, compared with $7,871 under the Liberals.

There have been, of course, other significant tax changes. British Columbians have benefited from the elimination of MSP premiums, but employers are now picking up the cost.

But most British Columbians are paying less to help cover the cost of government than they did under the Christy Clark government.  [Tyee]

Read more: BC Politics

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