Sales tax war resumed

The good doctor at The Gazetteer diagnoses a similarity between issues underlying the now debated transit sales tax and the late and unlamented HST. RossK is focused on the tax ‘shiftyness’ involved in both.

Quite right. BC Liberals have slowly shifted away from progressive taxation, preferring revenues from fees and taxes that have greater impact on the lower and middle classes. For example, the provincial tax on clear gasoline is 32.17¢ a litre. To a person earning $200,000, average fuel consumption would result in a tax of 0.5% of income. To a person earning $50,000, the same amount of fuel tax is 2.0% of income.

If that were the only regressive tax element, we might not have concern. Of course, it is not. Here is one example. If you are one of the fortunate few with employer paid extended health, vision and dental care, you are less burdened than others. Employer contributions for those are tax-free but uninsured individuals pay for the services with after-tax dollars. For example, if you face a $5,000 orthodontia bill and have a marginal tax rate of 30%, you must earn $7,150 to pay the dentist bill. The uninsured tend to be the retired and the people working in small business and on the margins of the economy.

Consumption taxes on necessities are not progressive and even if one begins at a small rate, it may not stay small and will become destructive to people who can least afford it. This year in BC, the richest taxpayers are relieved of about a quarter billion dollars in income tax, which is about the amount to be raised in the first year of the transit sales tax, if TransLink numbers are incautiously believed.

Additionally, the province is allowing natural gas producers over $600 million in credits to subsidize production costs, while it annually spends over $400 million more to promote the gas industry and aims to spend $8-10 billion so Site C can provide underpriced power to mining and gas companies. (The promotion the industries really wants is relief from paying the actual cost of electricity used, relief from assessment of royalties and taxes, waivers of environmental rules and employment standards and the right to import foreign workers.) In the meantime, we close plants that once added value to forest products and ship raw logs overseas and BC Hydro sells electricity to other industries for less that what equivalent energy costs, without calculating the number of jobs that result, if any. Residential consumers are asked to make up the difference.

A taxation system is much more than a way of raising money for essential public services. It can be a means to address inequality and promote a healthier economy. Alternatively, it can be a way to enrich influential insiders and their pals. The Liberal Government chose the latter path and it has had remarkable success. You won’t find a label on the door, but the most powerful segment of British Columbia’s government is the ministry of graft and corruption.

When transit tax proponents argue that its imposition is the only way to improve transportation services, they are wrong and they know it. As is apparent from my earlier scribbling, I believe the first action should be to clear out Translink’s self-serving Board of Directors and any part of senior management not willing to maximize efficiencies and economies. The Board should not be a resting place for patronage appointees who only come close to transit vehicles when they drive past them on the street. Management must commit to zero-base budgets and to full transparency and detailed, timely reporting of financial information. The veils of secrecy must be torn down so diligent reporters like Bob Mackin can let in the sunshine.

Translink must eject the self-interested consultants who’ve taken control and they must engage transit users in decision making, without filtering by consultants. Independent experts, conducting peer-reviewed work, should examine transit plans for effectiveness and determine that goals being addressed are the right goals. All of this could be done in a few months. Then, there could be an open discussion about how best to fund the objectives, including the capture of value created by new transportation infrastructure.

Once TransLink has set a new course, then we will move forward. Without change, we dig a deeper hole and the people who benefit most are the ones selling us shovels.

Categories: Taxation, Transit

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12 replies »

  1. Will the new CEO of Translink, Doug Allen, having switched roles with Ian Jarvis continue to live up to his Translink Bio or has it all been a lie:
    Doug Allen uses transit as his main form of transportation and plans to commute to TransLink's New Westminster headquarters via the Millennium Line and #84 bus.

    May we have some volunteers from the YES campaign ensuring that Allen is in FACT on #84 or wherever he is going in Metro Vancouver?


  2. Well. An assault on my favorite target the carbon tax as well as bringing up MSP premiums and Hydro rates. This government has become a hybrid of Left and Right wing party ideals, using the worst policies from both platforms. The various Crown Corporations and Ministries are comfy spots for former political hacks and insiders. They live like royalty as middle and lower classes are squeezed ever tighter. The lower mainland should vote against the tax for the reason that to do so gives carte blanche to the greedy hogs lined at the trough. Nothing could be more frusterating to be inelgible to vote on this disaster (I live in the Okanagan) yet have this issue alter the entire province. I hope that people heed what has been said here and vote accordingly. Just think, if that had happened in 2014, Snookie and her Liberal freinds wouldn't have another four years to turn the province into a shell. Thanks, Blake Newton.


  3. Those fine old Brill buses, manufactured by Can-Car, lasted almost 30 years and some of the motors lived on for another decade of service. However, they were primitive compared to modern buses and they certainly offered little to disabled riders. The first Brill replacements lasted about a dozen years but the next generation of Flyers stayed on the road for 20+ years.

    I rode regularly on the last Vancouver streetcar line (#14 Hastings) but it closed when I was 9 years old, replaced by Brill trolley buses. We thought the rails to rubber conversion was a big deal at the time but now I'd love to see LRT taking on a new role.


  4. I fear and rarely do I hear mention it, a US style regional tax system here in BC.
    Between the border and Seattle there are 4 Counties all with different sales tax rates. Even Cities within those Counties can have different rates.
    Vancouver Island/Sunshine Coast; you want better ferry service? Give us another .75% sales tax.
    Chilcotin, safer highways? Cough it up.
    The .5% trickle becomes a monsoon.


  5. Norm, it just occurred to me; normally there can be no campaigning on voting day. Once the first “translink” ballot is received by an eligible voter, to me, it is election day and will be election day until the “polls” close, weeks later.

    I don’t suppose we could expect “no campaigning” after day one?
    Of course my other concern; will anyone be “reviewing” the cast votes through the process?

    My gawd, I am such a cynic.


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