The sa国际传媒 Liberal government likes to point out that we have the lowest personal income-tax rates in the country, but it鈥檚 a hollow boast, given that sa国际传媒 is the only province to charge flat-rate health-care premiums.
The government should find the courage to be straightforward and call the premium what it is 鈥� a health-care tax. And then it should fold it into the income-tax structure so it is fair and progressive.
Much ado is made about not raising taxes in the province, yet British Columbians will pay more this year for health-care insurance, auto insurance, ferry fares and electricity from sa国际传媒 Hydro 鈥� all government services.
Want to raise taxes without seeming to raise taxes? Call the taxes premiums.
In 2011, after winning the sa国际传媒 Liberal leadership and before taking office, Premier Christy Clark said lowering taxes for families would be her priority. And she acknowledged that focusing only on income taxes was not looking at the whole picture. She noted that considering the whole tax load, British Columbians were in the middle of the pack nationally.
鈥淥ne of the things that government needs to start doing is, rather than just talking about where our tax rates are,鈥� she said, is to look at 鈥渨here are we in terms of the total burden of costs that government puts on citizens.鈥�
If she does take that look, she will find that as of the start of the new year, the burden has increased.
Medical Services Plan premiums for people with a net annual income of more than $30,000 have gone up 鈥� the yearly increase for families of three or more is $72, for couples it鈥檚 $66 more and for individuals, $36.
Basic auto insurance from the Insurance Corp. of sa国际传媒 will cost $44.40 more a year for a typical car. sa国际传媒 Hydro plans a four per cent increase in electricity rates, which will cost a typical homeowner about $50 more this year. The cost of taking the ferry will also go up, as sa国际传媒 Ferries has permission to increase fares by as much as 1.9 per cent.
Technically, not all of those costs are taxes, but it doesn鈥檛 make much difference whether the government takes the money with its left hand or its right hand 鈥� it still comes from the taxpayer鈥檚 pocket or, as in most cases, the pocket of the taxpayer鈥檚 employer.
MSP premiums are clearly a head tax, unrelated to income for those who earn more than $30,000 a year. (Households with an income below that level are exempted from part or all of the premium.)
A flat rate might seem equitable at first glance, but it鈥檚 highly regressive. For an individual earning $30,000 a year, the MSP premium is almost 2.9 per cent of net annual income, a significant bite for someone trying to get by in high-cost sa国际传媒 For someone making $60,000 a year, it鈥檚 about 1.4 per cent. For someone making $200,000 a year, the premium is almost negligible 鈥� 0.04 per cent of annual net income. It鈥檚 the exact opposite of a progressive tax system.
Simply doing away with the premiums would pinch 鈥� they bring in about $2.3 billion a year. Making them part of the income-tax regime would equal or surpass those revenues, given that those in the higher income brackets would pay more.
And it would eliminate an expensive government bureaucracy that is needed to send out monthly invoices and chase those who don鈥檛 pay their premiums.
This isn鈥檛 a call for higher taxes, but a call for a fairer, simpler way to collect the health-care tax we鈥檙e already paying.
