The truth about tax cuts

So it looks like we are in for another tiny personal income tax cut. The Premier has hinted this will be part of his next budget. Now might be a good time to debunk this issue once and for all. New Brunswickers, as a whole, pay among the lowest amounts of personal income taxes of any province in Canada. In fact, only PEI collects less income tax per capita than New Brunswick.

The reality is that the problem in New Brunswick is not the tax rate but that we don’t have enough people working and paying taxes and the jobs we have on the whole pay much less than other areas in Canada (except government jobs which pay according to one report 24% higher than the private sector in New Brunswick). Diverting much needed money from economic development and other programs designed to give the province a stronger economy into an almost meaningless personal tax cut is the worst kind of political pandering. After all, who is going to say no to a tax cut?

Let me recap our situation in New Brunswick right now: We have had the second worst rate of job creation in the last five years, business investment is one of the worst in Canada, our schools have the lowest average test scores in Canada, we provide the third lowest level of per capita funding to health care in Canada, research and development in New Brunswick is the lowest in Canada (per capita and as a percentage of GDP), we are in a sustained population decline for the first time since Confederation and many of our major industrial companies – especially in the rural areas – are closing or will be downsizing.

And now the Premier comes along and wants to cut personal income taxes by a few million dollars (which equates to maybe $20/year for the average New Brunswicker). Ask the folks in the Miramichi if they would rather have 20 bucks or a revitalized community. Ask the folks in the Acadian Peninsula if they would trade their 20 bucks for a reduction in the 18% unemployment rate. Ask the folks in Woodstock if they would trade their 20 bucks to have their hospital back. Ask the 300,000 adult New Brunswickers who make less than $20,000 in total annual income (compared to 260,000 that make more than $20,000) if they would give up their 20 bucks for a better job and better economic opportunity.

Still want your 20 bucks?

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