A Robin Hood in Reverse
back a year is something usually reserved for the week before
New Years, but this week we have the occasion of the first
anniversary of Gordon Campbell's historic election sweep.
Who would have thought that the mild mannered politician
who promised to do a better job with social programs while
slashing taxes would make Ontario's Mike Harris look like
apologists are fond of saying people voted for change. The
Premier's expression is "people elected us to do things
differently." Both are true but both beg the question
of what change and how differently. The answer is found
by going back and looking at what Gordon Campbell said in
opposition and during the campaign compared to what he is
doing as Premier. His apologists are reluctant to do that
as they prefer to say "you should have known what would
much touted New Era Document, NED, was the Campbell election
platform. It is still available on the BC Liberal website.
The pdf version is complete with full colour graphics containing
headlines such as "We don't have enough hospital beds"
(page 19). That document promised (page 5) that a BC Liberal
government would "Cut the base personal income tax
rate to the lowest rate of any province in Canada for the
bottom two tax brackets, on the first $60,000 of income,
within our first term." When the NDP criticized the
Campbell campaign for planning massive tax cuts for high
income earners and corporations, the Campbell campaign pointed
to NED and said the only promise was for the bottom two
5th massive tax cuts were introduced for high income earners.
BC has five tax brackets. Before the tax cuts, the brackets
ranged from 8.4% on the first $30,000 of income to 19.7%
on income over $85,000. It is important to recognize that
a person making over $85,000 did not pay 19.7% on all income,
but paid 8.4% on the first $30,000, 11.9% on the next $30,000
and so on as that person worked up through the brackets.
Consequently, a cut in the bottom two tax brackets would
have benefited the people on the top as much as the people
on the bottom as everyone pays taxes on the first part
of their income at the bottom rate.
the Campbell government actually did was rather than cutting
the bottom two brackets as promised, it cut all the tax
brackets. The result was that a person making $30,000
per year got a tax cut of $500 while a person making $150,000
per year got a tax cut of $5,800 - with 5 times more income
the tax cut was almost 12 times greater. The distortion
in favor of the high income brackets was so bad that the
top 8,000 tax payers in the province (one third of one percent)
got $200 million per year in benefits (14% of the total
benefits). All this was done more than a month before the
fiscal review panel appointed by Campbell reported out on
the state of the province's finances.
paid off the top income earners, the Campbell government
then eliminated Medicare coverage for eyeglasses, physiotherapists,
chiropractors and a host of other "auxiliary services".
In February it increased MSP premiums by 50% and increased
the sales tax from 7.0% to 7.5%. In other words, it weighted
the income tax cuts to benefit the top and then it clawed
back the savings with service cuts and tax increases that
primarily hit the bottom. People making $30,000 are worse
off as the result of the service cuts and tax shift. Over
63% of BC taxpayers have income of less than $30,000 per
year - that is more than the 58% who voted for Premier Campbell.
That 63% are worse off before even talking about recent
cuts to health, education, welfare, WCB or dozens of other
story of the first year of the Campbell government is one
of dramatic shifts in income from the bottom to the top.
The theory is that those shifts were necessary in order
to encourage entrepreneurs to invest in BC. In fact, many
of the high income earners are actually paid by the public
sector - doctors, deputy ministers, senior municipal administrators,
school superintendents and the like. Those who have the
most, get even more. Can you picture Gordon Campbell as