As we approach tax filing time, here’s a little context regarding your BC income taxes…
One of the problems plaguing debates about taxes in BC is that people think they pay much more in provincial income taxes than they actually do. For example, if I suggested that everyone pay 20% more in provincial income taxes, a great many people would light their hair on fire; that sounds like a huge and scary increase. But in reality, for most people it amounts to less than the cost of a large double-double per day.
Consider this: the vast majority of British Columbians – everyone with income up to $70,000 a year (or the bottom 86% of all tax-filers) – currently pays less than 5% of their income in BC income tax. In fact, after deductions, even many higher up the income ladder pay less than 5% in provincial income tax.
That’s not a very high overall provincial income tax rate. It also means a 20% increase would result in a pretty modest increase in actual taxes paid — between $200 and $800 per year for most of us. (For the math nerds out there: a 20% increase to an overall provincial income tax rate of 5% results in a mere 1% increase in the share of income going to BC income taxes.) Still want to light your hair on fire?
Yet if we increased all BC’s tax brackets by 20%, the province would collect roughly $1.8 billion in additional revenues. That’s enough money to build 2,000 units of social housing a year; substantially increase welfare rates; return k-12 class-sizes, composition and specialist teacher levels to where they were five years ago; implement the first phase of the $10/day universal child care plan; and still have money left for sizable increases to environmental protection, post-secondary education and MCFD.
(A while back, I wrote a piece about how low my BC taxes are here.)