On taxes, TJ missing the point

The Telegraph-Journal ran an editorial this morning lauding the idea of the province’s being able to collect more taxes in their local markets rather than relying on Ottawa to send them money via transfers.

As they say:
Provincial services would be paid for through provincial taxes – a more cost-effective process, which would create clear lines of accountability. Never again would taxpayers have to wonder how much of the tax deducted from their paycheques is being used to bankroll federal surpluses or pre-election spending sprees.

And then they counterpoint:

Left to rely on its own resources, the province would be forced to cut services or tax New Brunswickers more deeply. The gap between “have” and “have less” provinces would increase, and so would the migration of New Brunswick’s educated workers to provinces with lower taxes or better services. Immigration, seen by many as a key to maintaining New Brunswick’s economy and population, would slow. Even job creation would become more difficult, because potential employers and employees would have reason to fear the bite of local taxes.

So the TJ concludes that New Brunswick needs both – more direct taxation and more Equalization.

When I read this editorial, I thought I was reading the Times & Transcript. This is just a silly position. How can you argue for the provinces’ to have more direct taxation and more Equalization at the same time?

Be clear about this. New Brunswick, under any formula, is going to need billions of more Equalization in the coming years as its population continues to decline while the cost of government continues to increase. Add in Quebec, PEI, Nova Scotia and Newfoundland and the Federal government will need tens of billions of dollars more just to satisfy the growing need.

So any suggestion of the Feds backing off taxation and letting the provinces tax more (implication: the feds would drop their tax rates and the provinces would increase theirs), is just plain silly – if you want more Equalization for New Brunswick.

Which the TJ, admittedly and the Premier, do.

Don’t confuse people, TJ editor. An average accountant in Calgary will pay thousands more in taxes than the average accountant in Moncton – even though the tax ‘rate’ in Calgary is much lower. That’s because they earn so much more.

The government needs to focus its efforts on growing the economy, raising the private sector wage level (slowly but consistently) and growing high value jobs. Looking for more handouts from Ottawa, I really believe is a doomed strategy.

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0 Responses to On taxes, TJ missing the point

  1. Anonymous says:

    Again with the ‘handouts’. Where do you think New Brunswick resources go? Who builds the highways that gets Irving gas to other parts of Canada and the US? Who grows the potatoes that provide cheap fries for the world? Whose forests supply the cheap lumber for Ontarians to buy at their local Home Depot?

    A New Brunswicker pays the exact same amount per income to the feds as anybody else. What do they get out of it? Anybody remember the last federal investment in New Brunswick? Was there one? NB gets 1.6 billion in equalization, I would wager that almost half of that comes from direct federal taxation in the province. The other, as said, comes from the rape of our forests for ontario’s cheap toilet paper, plywood, building materials, etc.

    That’s HARDLY a handout. New Brunswickers pay to prop up ontario investment in the auto industry and research and development that sure isn’t done in NB. I think a study should be done like in Newfoundland where they found that what the province hands over to the feds is far more than they’ve ever gotten out of it.

    So federal money coming here is NOT a handout. We are ONE country here. Federal spending is at its lowest point since the fifties, there is a MASSIVE amount of capital in this country, far more than canadians could ever possibly need. The problem is that it is simply handed over to billionaires who suck it out and invest it elsewhere.

    That’s the usual Irving gibberish spouted, spend a whole editorial to say absolutely nothing. It isn’t suprising since young Irving frankenstein fired their editor last month-expect far more editorials like that in the future.

    Again, while I’m not arguing against ‘growing the economy’, it depends how that is done. New Brunswick exports five times as much as Vermont, yet economically we are not even close to them. They have zero unemployment and a cost of living far higher. They spend almost double the amount in education.

    It is ‘control’ of the economy that is lacking. Again, two billionaire families who are among the richest in the world in a province of less than a million, and corporate tax pays 3% of the budget-and they control entire sectors yet have hardly any employees. New Brunswick COULD be far better place to live than Vermont, because we also have health care. If people would get off their butts and force certain billionaires to pay their share, we wouldn’t have to worry about whether foreign companies come in or not.