More on taxation

I haven’t read the white paper yet on proposed tax reform in New Brunswick but, notwithstanding, two points as a follow on to my previous post on this.

1. They are talking about shifting around the tax burden, not reducing the overall tax burden. To do the latter, you would have to either a) have a source of new revenue or b) massively cut spending. They don’t/won’t do a) or b). So you have to ask yourself whether or not you want to pay more HST and less income tax, more carbon tax, less income tax, etc. The only shift might be to move some revenue generation from corporations to individuals (by dropping the corporate rate). But as I said before, that would be minimal impact. One point added to the HST and you could wipe out all corporate income tax from small biz and big biz. And they are not talking about doing that.

2. The CFIB wants the 5% small biz rate cut to zero. I think you run into the problem we talked about earlier. The bulk of small businesses are onesy and twosy professionals – doctors, lawyers, consultants (ahem) and others that aren’t about to grow beyond the local service area. You really should be looking to extract a reasonable amount of income tax out of these folks. I don’t want to start a firestorm but does it make sense to have a $250,000/year doctor with a marginal tax rate below the poor working stiff making $75k/year?

I am starting to smell a whiff of my socialist leanings (just kidding). But I do think that – in general – those with a greater ability to pay – should pay a little more.