Since the NDP assumed power in B.C. in the summer of 2017, there’s a perception that it’s been jacking up taxes in a multitude of ways.
There are new housing taxes, a new health-care tax on employers, a higher carbon tax, a higher tobacco tax, and new revenues from taxing the sale of cannabis.
But according to a policy note by the Canadian Centre for Policy Alternatives, most B.C. households are seeing their taxes fall.
And it’s the top one percent of income earners who are paying more.
“To understand the effect of recent changes, we examined total provincial taxes paid by households at different income levels—including income tax, PST, MSP, tobacco and the carbon tax,” wrote CCPA economist and public finance policy analyst Alex Hemingway. “This total as a share of household income is called the ‘effective tax rate.’ ”
From there, Hemingway divided B.C. households into 10 groups—from the poorest 10 percent up to the richest 10 percent, based on total income and government benefits.
The top-earning group was broken down into a subcategory of the top 10 percent of the top 10 percent, i.e. the top one percent of income earners.
The bottom 90 percent of households will see a drop in provincial taxes from 9.1 percent of income in 2016 to 7.9 percent in 2020, according to Hemingway.
The top one percent will see their provincial levies rise from 9.6 percent to 10.5 percent over the same period.
Hemingway reported that most of the drop for the vast majority of households is due to the NDP government’s decision to eliminate medical services premiums.
The CCPA has long criticized MSP premiums because they are not a progressive tax—meaning that everyone paid an identical amount once they reached a certain income threshold.
“The top 1% of households also benefit from the elimination of MSP, but this is more than offset by a new tax bracket of 16.8% on income over $150,000,” Hemingway noted.
He also pointed out that during 16 years of B.C. Liberal rule, the greatest benefits from tax changes went to the richest one percent and the poorest 10 percent of households. Those with middle incomes didn’t fare nearly as well, according to his research