| Campbell delivers on dramatic
tax cuts Craig McInnes Vancouver Sun | |
|
The cuts will leave $1.35 billion in the pockets of British Columbians in 2001/2002 and another $1.5 billion in 2002/2003. "In the first day on the job we provided every British Columbian with a dramatic personal tax cut," Campbell said. "because we think that's critical to the economic future of this province. "We believe that you should keep even more of every dollar that you earn because we know when you do that, you will spend it effectively in your community. That will create more jobs, more opportunities and a healthier economic environment." The cuts affect all tax brackets and, when fully implemented, will give B.C. the second-lowest marginal tax rate in the country, after only Alberta. Campbell went far beyond his campaign commitment to cut taxes in his first 90 days in office and to ensure B.C. had the lowest rate for the bottom two tax brackets by the end of his first term. "We have accelerated our four-year commitment to cut personal income tax rates for the lowest two tax brackets in Canada by 31/2 years," he said. Finance Minister Gary Collins said B.C. will further lower the rate for the bottom two tax brackets if other provinces lower theirs. "At the end of our first term, we will still be paying the lowest of anywhere in Canada." Collins said he does not yet know the impact on provincial finances. Campbell has already launched an independent review of the province' finances and is to get the report by the end of July. Collins is also planning to bring in a budget when the legislature is called back, likely in July. But Campbell said he could not wait until then and still keep his promise, because federal tax calculation forms are sent out to employers this month. "For us to meet that commitment to make a dramatic personal income tax cut within 90 days, we had to make that decision today and announce it." The B.C. portion of personal income taxes is being cut by about 25 per cent in two steps, but most people will feel the impact of the full cut immediately because of the way it will be deducted from their pay cheques. The first step will be retroactive to Jan. 1, 2001. It will show up on pay cheques in July and will seem twice as large as it actually is in percentage terms because employers will be making up a year's cut over the remaining six months of the year. When the second cut kicks in on Jan. 1, 2002, most people will not see much change. For example, a person earning $40,000 would get a $308 tax cut for 2001 spread over six months, which works out to a cut of just over $50 a month. In 2002, the tax cut rises to $644 but it is spread over 12 months, so it works out to about $54 a month. Provincial treasury officials said Tuesday their financial models show the tax cuts would punch about a $1-billion hole in the budget delivered last March. But that model does not take into account the stimulative effect on the economy that Campbell believes will occur as a result of the tax cuts. "Since 1995, nearly all provinces have cut personal income taxes. Without exception, audited financial statements have shown these tax cuts have produced significantly higher tax revenues over time as the economy grows. "In turn, that prosperity has meant greater revenue to support critical public services like health care and public education." "There is no reason to expect in British Columbia and only in British Columbia, when you cut personal income tax, somehow or other you're not going to generate the revenue. "It's happened in Europe, it's happened in the United States, it's happened in every province in this country, it's happened in the southern hemisphere, it's happened in the northern hemisphere, it even happened in British Columbia." Campbell said the government decided to go ahead with tax cuts for wealthier British Columbians after discussions with finance officials and based on the need to keep skilled British Columbians from fleeing to lower-taxed jurisdictions. "This will help ensure that we stop sending our best and our brightest, that we stop sending our nurses and our doctors and our high-tech workers outside of British Columbia to live elsewhere and pay their taxes elsewhere," Collins said. The finance minister said the tax cut will act as the catalyst for a dramatic reversal of fortune for British Columbia. "Today's announcement puts the rest of the country and the rest of the world on notice that British Columbia is competitive again -- we are open for business. "Under a B.C. Liberal government, British Columbia is once again going to be the destination province where people and businesses want to move and invest." Campbell said he intends to turn around the decline in real personal disposable income that has cost each British Columbian an average of $1,738 over the past decade. "Any plan to restore hope and prosperity in British Columbia is a plan that must show people in this province that if they are willing to work hard they can get ahead." [EMAIL PROTECTED] |
Miroslav Antic,
http://www.antic.org/
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