For several years now, many observers of the BC economy have noted a split between the highly diversified and populous Lower Mainland (plus Victoria) and the rest of the province, which continues to be resource-dependent and highly vulnerable to swings in international market conditions. The gap between the "two economies" has been growing. But instead of an economic strategy to shrink that gap, BC's tax and spending cuts are making it worse.
Taxes and tax cuts
With some recent privatization reversals, a number of business leaders and free market fundamentalists are concerned that the BC Liberals are backing away from the Campbell revolution. The government, in their opinion, needs to get back with the program -- more tax cuts, deeper and faster spending cuts, privatize Crown corporations, and get rid of environmental and labour regulations.
The provincial government is considering various tax measures in its efforts to balance the books. The 10% income tax cut may be rescinded. But there is also speculation of a health surtax. How fair would these tax changes be? The recent increases in user fees do not bode well as an indication of the approach that will be taken.
Any new tax needs to reflect the principles of progressive taxation if it is to be fair and to correct the social costs of the 10% income tax cut.
Are you going to inherit $1 million? Well, if you are, you're safe -- even with the new NDP inheritance tax proposal.
Alarm bells have been sounded about how the NDP's proposed inheritance tax could affect even those not normally considered rich because property values in cities like Vancouver, Toronto, and Victoria have risen so high. But is this something to be really, really concerned about?
Promises, promises - it's election time again. But can the three major national parties pay for what they are promising in their electoral platforms?
We decided to do a little arithmetic to ascertain whether each party can pay for what it claims it will do, and still balance its budget. The full report is published at www.policyalternatives.ca, but here are some of the highlights.
(Vancouver) The Canadian Centre for Policy Alternatives--BC Office (CCPA-BC) is calling on Finance Minister Paul Martin to reject calls for across the board tax cuts in this year's federal budget. CCPA-BC Director Seth Klein and Economist Marc Lee appeared before the House of Commons Standing Committee on Finance this afternoon. The Finance Committe is conducting its annual pre-budget consultations.
(Vancouver) A new report released today by the Canadian Centre for Policy Alternatives--BC Office says the services British Columbians depend on are seriously threatened by calls for further public sector downsizing.
The report, Are Spending Cuts and Privatization the Answer for BC?, shows that the spending cuts and privatization measures called for by business lobby groups would, if implemented, lead to poorer quality services, loss of jobs and money from BC's communities, increased user fees, and likely, increased costs to government.
(Vancouver) The BC Office of the Canadian Centre for Policy Alternatives released a major new study today on taxes in BC. The report, by economist Marc Lee, takes a close look at BC's tax levels (including comparisons with other jurisdictions) and examines the arguments and proposals that have been made in favour of tax cuts.
(Vancouver) The Canadian Centre for Policy Alternatives says the tax cuts announced today by BC's new government are a shocking surprise.
"During the election campaign, British Columbians were led to believe that tax cuts would be concentrated on the bottom two tax brackets," says Seth Klein, Director of the Centre's BC Office. "Today's announcement delivers much bigger tax cuts to those who need it the least. These changes make BC's tax system more regressive--the higher your income, the bigger your tax cut."
"The Ontario Government's plan to spend $300 million on a tax credit for private schooling is just a fraction of the total of $2.3 billion cut from public education since Mike Harris was elected," the author of a new CCPA study says.