Despite years of work by tax-cutting governments at both the Federal and Provincial levels, Canadians remain a highly-taxed people. The top marginal income tax rate in the Province of British Columbia is 45.8%. That rate, incidentally, comes in at the (given the cost of living in Vancouver) decidedly low level of $151,050 per year of income in 2015. The combined Federal and Provincial sales tax comes in at 12% here. When one adds in property taxes, MSP “premiums” (really a tax by another name), and the highest gasoline taxes in Canada it is easy to see how people making less than $100,000 a year could easily end up remitting well over a third of their total income to the government each year. In other words: our taxes are already too damned high.
Given the tremendous amount that we already pay in taxes, adding another .5% to the sales tax rate that we already pay can seem inconsequential. For someone making $30,000 a year in taxable purchases it adds up to “only” another $150 per year. However, I should hasten to add, given the scale of the projects that Metro Vancouver plans to use this to fund, we would be very foolish to believe that the Mayors of Greater Vancouver will stop there. Once we have agreed to the levying of a regional sales tax increase there will be little, if anything, to stop them from going to that well again and again. Is it not rather easy to imagine, over the next few years, that the local tax rate would go up a little bit each and every year? After all, it isn’t at all uncommon for American localities to have local sales taxes set at a rate of a few percentage points. If, come 2020 or so, this new Metro Vancouver sales tax had been raised to 2.5% then the cost to someone making $30,000 a year in taxable purchases would suddenly increase to $750 each year.
I am certain that some will suggest that the scenario above is alarmist. I will respond by suggesting that those people are either naive or dissembling. The issue here is not the amount of the tax – though I find that objectionable in and of itself – but that by allowing for its imposition we will have created a pernicious precedent. Like other insidious taxes — with the gas taxes levied by Metro Vancouver in support of TransLink being another notable example — it will simply rise and rise with time. In having allowed the imposition of such a tax we will soon come to understand what Kipling meant when he wrote, “That if once you have paid him the Danegeld, You never get rid of the Dane.”
Two years ago the voters of British Columbia rose up to reject the Harmonized Sales Tax. I supported that tax since I believed that it was more economically efficient and might allow for the reduction of the overall rate in the long-run. This proposed tax has none of those virtues. In fact, this proposed tax manages to be the worst of both worlds. As a blanket increase in the sales tax it is, of course, sharply regressive in that it will fall most-heavily upon those with the lowest incomes. Yet, at the same time, it is also notably redistributive in its character as it, in essence, is a tax that takes money from people who don’t make use of public transit uses it to subsidize the fares of those that do. In other words, this method of funding public transit manages to be unfair to everyone except for a small slice of middle-class transit users who will gain more in subsidies than they will pay in taxes. Given this, the voters of the metro Vancouver region should head to the polls to reject this tax with even greater force than they did the HST.
TransLink is already supported by a massive subsidy from the people of the region. Every time I fill up the tank of my car I indirectly pay enough to them to cover around three train or bus tickets. If that isn’t enough to cover the cost of transit and then some, I put it to you that TransLink must therefore be both excessively ambitious and generally mis-managed.
Only 43.4% of eligible Vancouverites voted in the recent municipal elections. Voter participation was even lower than that in some of the other municipalities of the region. Because Metro Vancouver is required to put this proposed tax hike to a referendum, we now have a second chance to rebuke the air-headed utopians who have foisted such foolishness as the Vancouver bike lanes upon the innocent commuters of this city. Let’s seize that chance and vote down this cash grab,