I like CBC and most of the time for me the mix is right. The old journalistic mix – set up the basic skeleton of the story, cover both sides and then wrap up. Certainly on an issue such as taxes, certain journalists will have skew things, as one of the more intrepid journalists told me, in favour of “the little guy”.
But Robert Jones’ covering of the tax story yesterday on CBC left a bad taste in my mouth. First, his expert source was the Help4Taxes guy who is trying to position himself as the middle class tax advocate to drum up new business – which is fine – but that populist rage from a guy who’s business telephone will ring the more shrill his commentary – has a vested interest in cranking up the volume.
When you cover a story, you need to give people the facts – not cherry pick the facts. Just about any balanced story I have ever seen on taxation will tell the tax rates but also the amount of tax paid. Not Robert Jones. He tells us that the rich person will save $27,000 (the 1,300 persons) and the poor person (@$35,000) will save $349.
What he doesn’t tell you is that the guy making $350,000 will pay $148,135 in income taxes per year and the guy making $35,000 will pay $6,406 in total income tax (provincial and federal). This is the taxes payable before deductions (see my point below).
A balanced story would have shown this fact so that people understand that in New Brunswick (and Canada) the richer you are, the more tax you pay. Jones left this out deliberately.
Another point that Help4Taxes would neglect on purpose but the UNB economist shouldn’t have is this issue of tax shifting. These high income earners (and we are talking about less than one half of one percent of tax filers) making more than $250,000 per year can find creative ways to pay far less tax anyway. As I have pointed out several times, when former Premier Bernard Lord cut the small business tax to the bone, there was a significant migration of persons that were unincorporated self-employed to persons that were incorporated self-employed. Why? Because all of a sudden there was a big tax savings to being a corporation versus a private citizen as a taxpayer.
I don’t know the numbers but based on my experience, the bulk of doctors and other high end health professionals are set up as corporations and that has the impact of significantly reducing income taxes payable.
If you will recall, I wasn’t the biggest fan of the tax cuts that the government implemented. I much prefer using the tax code to incentivize specific behaviour (whether it is carbon reduction, new investment in local business, etc.). But I think in this case, Jones picked low hanging fruit that is designed for maximum titilation and to anger people, which it seems it has.
The real issues are far more complex and worthy of analysis. Will these tax cuts actually stimulate the economy? I am unsure. Will they help attract skilled workers? Will there be jobs for those skilled workers to begin with?