“The art of taxation consists in so plucking the goose as to procure the largest quantity of feathers with the least possible amount of hissing.”
These are the famous words of Jean-Baptiste Colbert, finance minister of France from 1665 to 1683, and they endure to this day in British Columbia.
And now this plucking duty falls to Finance Minister Carole James, who brought a relatively delicate hand to her first round of goose down extraction, the September budget update.
It was mostly an execution of well-known election promises, with familiar political spin. What the NDP tirelessly described as the “tax break for the richest one per cent” is finally over after two agonizing years of giveaways to B.C. Liberal donors.
In fact, James increased the tax rate by two points on personal income over $150,000 a year, bringing that rate from 14.7 per cent to 16.8. This restores a top bracket introduced for two years as the B.C. Liberals campaigned for the 2013 election amidst recession and an HST hangover. And these are not the top one per cent of earners, but more like the top five.
And of course this is the Canada goose, where the federal government is preparing its own somewhat rougher round of plucking. There is hissing and honking across the land as Ottawa moves to tax personal corporations, with doctors and other self-employed entrepreneurs loudly protesting that their feathers are about to be yanked out by the handful.
Some may fly south and never return, a chronic problem in Canada. Why? This restored B.C. tax on rich doctors, lawyers, tech wizards, and yes, plumbers and carpenters, is on top of a recent four per cent increase in the highest federal income tax rate.
For these high flyers in B.C., tax will now confiscate half of their income, a level noticed by even the toughest of geese.
“Moreover,” say Fraser Institute economists, “B.C. will have a higher top tax rate than next-door Alberta (48 per cent) and much higher than next-door Washington, which has no state-level income tax.” So if you’re a goose flying over Amazon headquarters in Seattle or Microsoft’s home office in Redmond, the top U.S. federal rate is approximately 40 per cent and kicks in at a much higher income level.
Some readers may recall when then-NDP leader Carole James led an “axe the gas tax” campaign against B.C.’s carbon tax. Now as B.C.’s first NDP finance minister since Ujjal Dosanjh appointed Paul Ramsey to the job in 2000, James has got religion on saving the planet.
B.C.’s carbon tax on fuels goes up 17 per cent next April 1, and the next two Aprils after that. This is earlier than the NDP planned, at the behest of the three B.C. Greens, who made it a condition of propping up the second-place party in the 2017 election.
This puts B.C. a year ahead of the carbon pricing mandate forced on all provinces by Prime Minister Justin Trudeau. The sneaky NDP pluck here is ending “revenue neutrality,” meaning future carbon tax increases will no longer be offset by reductions in personal and business income tax. You’ll never know those feathers are gone, except for a slight twinge when you gas up the car.
B.C.’s corporate income tax goes up one point to 12 per cent, another populist NDP promise to make those corporations pay. That will be on top of Ottawa’s next feather-gathering move to try to stop the endless string of big-spending deficits introduced by Trudeau and his finance minister Bill Morneau.
Tom Fletcher is B.C. legislature reporter and columnist for Black Press.