Changes to personal B.C. taxes over the past year and a half — including elimination of Medical Services Plan premiums — mean the vast majority of households are seeing their tax bills fall while the richest one per cent are paying more.
To understand the effect of recent tax changes, we examined total provincial taxes, including income tax, PST, MSP, tobacco and the carbon tax — paid by households at different income levels. The amount of taxes paid as a share of household income is called the “effective tax rate.” The current household tax reductions are driven almost entirely by elimination of MSP premiums. MSP is an unfair tax because whether you make $45,000 or $450,000 you pay the same flat dollar amount . The wealthy pay a much smaller share of their income in MSP than everyone else.
That amount of money could add 10,000 units of new affordable housing per year, quadruple funding to the CleanBC climate plan, raise welfare rates to 100 per cent of the poverty line, fully implement universal $10-per-day child care and eliminate tuition fees for domestic students — with room to spare.