Regressive taxation in BC - Vote YES to reject the HST

By Gravity
June 29th, 2011

This is a cut and paste of a comment I found on the Tyee.
It has a lot on interesting information about taxation in BC.


How appropriate that the “Vancouver Sun” should today publish a summary of a new report by the CCPA that demonstrates why the BC Liberals were forced to rush out the HST so soon after the 2009 provincial election. The report is entitled “BC’s Regressive Tax Shift” and the story is on page A11.

This report documents that the ten years of BC Liberal rule under Gordon Campbell gave away massive amounts of foregone tax revenue to the tune of $3.4 billion per year (about 10% of the total BC budget). These income tax breaks and the sweet-heart deals on reduced royalties that Campbell gave to his friends in the resource sector resulted in a huge budget shortfall; it can now be readily seen why he needed to bring in extra billions from the HST. The only alternative would have been to reverse all these giveaways that he had spent years sneaking in.

Tax cuts for people making $10 an hour or less (one in seven workers) came to about $200 per year while middle-income households were about $1,200 but those in the top 10% of BC households had $9,000 per year lopped off their income taxes. The real winners (surprise, surprise!) were those making over $800,000 per year in income (the top 1%) – their income taxes were reduced by $41,000 each year: an almost 50% reduction in their effective tax rate. This means that the well-off (top 20%) pay a total provincial tax rate of about 11 per cent while those in the bottom 20% pay an effective 15% rate. This is why BC’s taxes are called “regressive” when they used to be the opposite – that is, “progressive”.

It is also shocking to discover that BC now collects more from MSP premiums than it does from corporate taxes; this is also true for direct fees from students attending post-secondary education. The whole thrust of the awful neo-conservative tax policy is to stick it to the general public, in terms of fees (MSP, carbon), licenses, tolls and property taxes so that direct income taxes can be reduced on big business and very wealthy individuals.

This is why we must vote YES to reject the HST. This will force government to restore fairness to our tax system – tax those who can afford to pay.

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