About the only way to get attention as a new political party is to make bold statements or do something else to get people to look your way. This is the case with the People’s Alliance column this am where the leader suggests “What I am suggesting is that you are already paying more than your fair share for the government services you receive.”
This is an interesting philosophical, social and economic question. Are we paying more that our fair share?
First, the average employed New Brunswicker pays about $3,200 in provincial income taxes (2009) – calculated as the amount of provincial income tax shown in the estimates over the # of employed persons in 2009. Using that same methodology, the average New Brunswicker pays the lowest amount of average income tax of any province in Canada – PEI is a close second.
Second, according to the Ernst & Young online income tax calculator, a person earning $60,000/year will have a lower income tax bill (before deductions) than Quebec, Nova Scotia, PEI, Saskatchewan and Manitoba.
Of course a lot of this is due to the lower incomes in New Brunswick. Alberta has a much lower income tax rate but its residents pay more income tax (per employed person) because they earn much higher income but the People’s Alliance was crystal clear about “fair share”.
On the business side, the KPMG total tax index (as assessment of the total tax environment faced by NB businesses) finds that the average business faces a lower tax environment here than any other location in Canada and the US.
By the way my many of my friends in the business sector – particularly smal biz – disagree with me on this despite the hard data supporting my position. I still hear folks talking about being ‘taxed to death’ in New Brunswick.
A key point is that most other provinces generate far more royalty and tax revenue off natural resources but the equalization program ends up making up the gap in NB so that the NB taxpayer doesn’t pay relatively more.
If you look at where the money comes to pay for public services, it’s fairly clear to me that New Brunswickers are not overtaxed. Everything is relative. Without that you could argue that even $1 in tax is overtaxation. Compared to our peers, New Brunswickers are not overtaxed.
My position on tax is that governments need to collect far more than they do today but I don’t think they can get too much more out of the existing base. I think they are going to have to raise taxes some to balance the books but the longer term focus needs to be on growing the pie and generating more taxes that way.