British Columbians not paying enough in taxes: report
Posted January 29, 2013 8:48 am.
This article is more than 5 years old.
VANCOUVER (NEWS1130) – BC may have some of the lowest personal and corporate taxes in Canada, but a report suggests that is nothing to be proud of.
The Canadian Centre for Policy Alternatives argues that more than a decade of tax cuts in BC has left the province with a budget crunch, and we have not seen the promised economic benefits of those cuts.
“Tax cuts have eroded our fiscal capacity and we don’t have the money to deal with the challenges we face. We are paying a high price for those tax cuts,” says Iglika Ivanova, an economist for the CCPA.
The left-wing policy group says economic performance, business investment and job creation have been average in recent years while the tax burden has been shifted from corporations to households and from upper-income earners to middle and modest-income households.
“Comparisons between BC and other provinces show that we are doing no better than other provinces which have higher taxes and we are doing not much better than we were 10 years ago when we had much higher taxes. Tax cuts are expensive and they have failed to deliver,” adds Ivanova.
The CCPA suggests that if BC collected the same tax as a share of the economy it did in 2000, the province would have another $3.5 billion in public funds. If the province collected the same amount of personal income tax as the average in other provinces, that would be another $2.4 billion in the public coffers, a big boost to public services like health and education.
“Besides the need for new revenue, we need to make the system more fair. We’ve had decreases in personal income taxes, which are the most progressive form of taxes because they are based upon ability to pay, and we’ve had increases in things like Medical Services Plan premiums which, for the most part, charge everyone the same amount regardless of their income and they’ve increased by 85 per cent since 2000,” explains Ivanova.
“When we talk about increasing taxes, for close to 90 per cent of British Columbians, we are looking at a very small amount of money; we’re talking the cost of a cup of coffee per day. The increases we model would be, at most, $200 to $800 per year. Not large amounts, but the reality is when we pool our resources together, we can buy a lot more with them as a province than we can each individually buy with that kind of money.”
“But our report also looks at reforms to corporate taxes,” she adds. “It looks at natural resource revenue, closing loopholes in personal and business taxes. It looks at property tax, carbon tax and a number of other options.”
The Centre says recent opinion polls show most people in BC would consider tax increases to sustain key services like healthcare and education.
“We all need to pull together in times of economic need. Business owners have also supported, in the past, some tax increases, if it means balancing the budget by 2014,” says Ivanova.
“We have the lowest corporate income taxes in Canada and some of the lowest personal income taxes as well, even for very high earners. There is a lot of room for British Columbians to move on taxes and to raise new revenue without losing our status as one of the lowest tax jurisdictions in Canada.”
The CCPA hopes the report will kick-start conversation about tax reform in BC.
