B.C. top income tax rate nears 50%, investment taxes highest in Canada

Competing for skilled workers with U.S. states getting more difficult, study says

Increases in top personal income and corporate taxes are making it more difficult for B.C. to compete for highly skilled workers compared to neighbouring U.S. states, according to a new study from the Fraser Institute.

B.C.’s top combined federal and provincial personal income tax rate is 49.8 per cent, applying to income of $150,000 and up. That’s about 13 per cent higher than the rate in Washington and Alaska, neither of which has a state income tax.

“The B.C. government has recently made worse the province’s long-standing tax competitiveness problem with recent hikes to personal and corporate income taxes, payroll taxes, carbon taxes, vehicle taxes and property taxes – all of which make it harder to attract potential skilled workers, investors and businesses,” said Ben Eisen, a senior fellow at the Fraser Institute and co-author of Assessing British Columbia’s Tax Competitiveness.

“B.C.’s tax regime is simply uncompetitive with not only neighbouring U.S. states, but several Canadian provinces.”

The study ranks B.C. ninth highest among provinces and states in North America in the top personal income tax rate. For tax rates on business investment, the survey finds B.C. to be highest among provinces.

RELATED: B.C. health care payroll tax approved, takes effect Jan. 1

RELATED: B.C. Greens MLA questions impact of payroll tax on jobs

The gap is made more significant by major tax changes implemented last year by U.S. President Donald Trump. B.C.’s corporate income tax rate is “in the middle of the pack” for provinces, the study says. But using a measure called “marginal effective tax rate” that calculates the broader application of sales tax to businesses, B.C. goes to the top.

The harmonized sales tax, implemented in B.C. in 2010 and then repealed in 2011 after a province-wide petition demanded it, was designed to make business more competitive by spreading sales tax across more services and lifting it from manufacturing and other business inputs on the way to delivering a final product.

B.C. businesses are now coming to grips with the new employer health tax, a new tax on payrolls of more than $500,000 a year that takes effect as of Jan. 1 to replace provincial revenue from the Medical Services Plan tax. Some businesses are paying both for 2019, with the MSP rate reduced by 50 per cent and eliminated in 2020.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

Just Posted

Central Saanich changes incentives for housing developments

Changes shift incentives for some developments from development cost charges to building permit fees

VIDEO: Saanich resident shocked when trespasser licks security camera, rummages through mail

‘I found the situation really bizarre,’ said the Gordon Head resident

BC Ferries crew member taken to hospital after getting struck by bow doors

Two sailings between Horseshoe Bay and Departure Bay were cancelled

Goldstream Food Bank on the search to fill Christmas Hampers with toys

Volunteers are looking for new toys for infants to 11-year-olds

Black Press Media celebrates women who are making a difference

Helping others is the cornerstone of the work Shannon Drew does in… Continue reading

VIDEO: Explosion, fire sends woman running from Saanich home

Heavy smoke in the area, crews on scene

Jack’s Devils beat Quinn’s Canucks 1-0 in NHL brother battle

New Jersey youngster scores first career goal against Vancouver

Two charged after owner’s wild ride through Kamloops in his stolen truck

Crystal Rae Dorrington, 37, and Derrick Ronald Pearson, 32, facing multiple charges

Judge orders credit union’s bank records for Kelowna social worker facing theft allegations

The man is accused of negligence, breach of contract, fraud and a conspiracy with Interior Savings

Leaders pour it on with rallies, boosts for candidates as campaign reaches peak

The federal election campaign has reached a crescendo

Allegations of racism lead to ministry investigation at Vancouver private school

St. George’s School was contacted over what the school describes as ‘deeply offensive behaviour online’

Not a political question: Thunberg calls for climate action in Alberta

Edmonton police estimated the size of the crowd at about 4,000

Zantac, the over-the-counter heartburn drug, pulled in Canada, U.S.

Health Canada also investigates possible carcinogen in some ranitidine drugs

B.C. public safety minister says cannabis edibles not in stores til January

Mike Farnworth says he wants regional issues considered when it comes to licensing

Most Read