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Income tax cuts shift burden onto people with low incomes: report

British Columbia has unfairly shifted the tax burden onto people with lower incomes over the last decade, says Seth Klein, the B.C. director for the Canadian Centre for Policy Alternatives.

"I think most people would expect we have a tax system where as you have a higher income you pay a higher rate," said Klein, co-author of a report released today, BC’s Regressive Tax Shift: A Decade of Diminishing Tax Fairness, 2000 to 2010.

The CCPA researchers used Statistics Canada data to look at the total tax people pay, including on sales, income, property, medical services premiums and carbon. Ten years ago wealthy people paid a slightly higher percentage of their income as tax than other people did, he said. Now they pay less.

"I didn't think we'd see a downward sloping line like that," Klein said. "I think people would be surprised."

The change has to do with cuts to income taxes, which are applied at different rates depending how much money a person makes, he said. "The problem is income tax is only one tax that we pay, and its role within the overall tax system has been shrinking."

British Columbia has reduced income taxes over the last 10 years and increased what it takes in from other taxes, he said. "Tax cuts have been the primary policy agenda of the last 10 years . . . It hasn't delivered. That's why we need to rethink this," he said, adding that B.C. has the highest unemployment rate in Canada west of the maritimes.

The CCPA has been calling for a fair tax commission to address these questions, a suggestion MLA John Horgan adopted during the NDP leadership race. "We shouldn't be doing this in piece meal fashion," said Klein. "I hope it still finds some interest in the NDP. They should support an idea like this."

NDP leader Adrian Dix said such a commission is an interesting idea, but one that makes little political sense. "My one intention is to review taxes and say what I'm going to do before an election, which I think is what people want," he said.

Promising to hold a commission instead might seem like you were saying that any tax might change two months after the election, he said.

Andrew MacLeod is The Tyee's Legislative Bureau Chief in Victoria. Reach him here.

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