The Topline
- If re-elected, B.C. NDP Leader David Eby promises to raise income taxes on the highest earners in the province, calling it a “millionaires” tax.
- The NDP estimates the higher tax rates will eventually generate another $1 billion per year that would help pay for expanding health care for seniors, while still maintaining B.C.’s ranking as having Canada’s lowest income tax rates for the middle class.
- The B.C. Conservatives say Eby’s plan will “drive doctors out of our province” and that he “wants to tax the doctors and specialists every community is fighting to recruit.”
- The state of Washington recently passed a controversial “millionaire tax” on earnings above $1 million, while California is considering a one-time 5 per cent tax on the wealth of billionaires.
Never miss another side to every story
Sign up for The Level's 5-minute newsletter, 3x per week
Thanks for subscribing!
Check your inbox for an email to confirm you're on the list. If there's no email, check your spam filter just in case, then mark us as 'not spam' so that you never miss an issue.
Switch sides,
back and forth
The wealthiest can afford to chip in a little bit more
No government likes raising taxes. It’s the last thing voters want to hear.
So if you’re going to pitch a tax increase, you better do two things. Limit the number of people who have to pay more. And make sure the money is put toward something important.
At least give credit to Eby for checking off those two boxes on his proposed tax increase for “millionaires and those who can afford it” if his government is re-elected.
Critics quickly pointed out this isn’t a tax increase for just the very rich. Under Eby’s proposal, anyone with an income higher than $190,405 would pay more in income taxes.
But Eby’s POV is that amount is still four times the median income in B.C.
The new rates apply to just four per cent of income earners. Or to put it another way — 96 per cent of income earners won’t see any increase, but will enjoy the benefits that come with the extra tax revenue.
It also applies only to individual income, not household income.
Let’s say one person makes $125,000 per year, and their partner makes $125,000 per year. Neither would see a tax increase under this plan — even though their household income of $250,000 exceeds $190,405.
For someone making $200,000 per year, that’s an extra $192 in income tax. If you’re making $300,000, it’s an extra $2,192. Factor in deductions that higher earners often use to reduce taxable income, and that extra tax bill could go down.
But here’s the payoff: The NDP estimates this would eventually generate an additional $1 billion each year to help pay for the one thing every single person uses at some point — health care.
More recruitment of doctors and nurses from the U.S. Better health care for seniors. And new long-term care beds. All worth it. Especially since 96 per cent of us won’t have to pay more.
It needs repeating. No government likes raising taxes. It’s the last thing voters want to hear. But in this case, B.C. would still be Canada’s lowest-taxed province for middle-income earners.
Even with the new tax rate, that same person making $300,000 in B.C. still pays $4,910 less than someone in Ontario.
So all things considered, it’s a fairly reasonable ask if it means we get to live in one of the best places on Earth.
If we need to attract growth, this is a bad idea
Even before David Eby called this election, he was betting on private investment in natural resources like mining and LNG to help grow the economy.
He also said he wanted to recruit U.S. doctors to help fix our shortage.
So if the goal is attracting private industry and recruiting more physicians — along with the high-paying jobs that naturally come with that — doesn’t raising taxes on the top earners feel… backwards?
Eby’s plan would make B.C. known for having one of the highest income-tax rates in the world.
Because nothing attracts big business quite like having that as your claim to fame.
Eby says it’s a tax for the “wealthiest” — but actually, it kicks in at $190,405 per year — which would only be considered “wealthy” if this weren’t one of the least affordable places on Earth to live.
The Canadian Taxpayers Federation (CTF) points out it takes an income of $265,618 to qualify for a mortgage to buy an average Vancouver home, according to National Bank.
“It’s bizarre that the B.C. NDP is now including people who barely qualify to buy an average home in their wrongheaded ‘eat the rich’ policies,” says Kris Sims, B.C. director for the CTF.
The concern is whether this new tax could lead to high earners leaving the province — especially the valuable doctors and specialists who could end up paying higher income taxes if this goes through.
But it turns out an associate professor from Cornell University who studied the “millionaire tax flight” for nearly 20 years found that an exodus of wealthy people rarely happens. Once wealthy people are established in one place, they’re less likely to uproot and leave purely for financial reasons.
The bigger risk is whether this could make B.C. less attractive to those deciding whether to come here — just like, oh, I dunno, let’s say, a U.S. doctor being recruited.
Vancouver’s housing is already outrageously expensive. The Canadian dollar isn’t worth as much. And income taxes are already high when compared to the U.S.
Eby says B.C. needs investment, doctors and high-paying jobs. Yet, he wants to make the province even more expensive for the very people he needs to attract.
That’s not an economic growth strategy. It’s B.C. shooting itself in the foot.
Do you support journalism that helps Canadians navigate difficult issues with more context and less outrage?
Every dollar goes toward helping Canadians see another side to every story so they can form their own opinion.
