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The harmonized sales tax, implemented in B.C. in 2010 and then repealed in 2011 after a province-wide petition demanded it, was designed to make business more competitive by spreading sales tax across more services and lifting it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

Category 2 open burning to be allowed in Cariboo

Category 2 open burning will be allowed again throughout the Cariboo Fire… Continue reading

Woman arrested after truck stolen in Mahood Falls

A police report from the 100 Mile House RCMP

Highway 97 closed north of Clinton

The highway has been closed due to downed hydro lines

Did you attend 108 Mile Ranch’s 50th birthday celebrations?

Did you attend the 108 Mile Ranch's 50th birthday celebrations this weekend?… Continue reading

From the archives of the 100 Mile Free Press

28 Years Ago (1991): A proposal for a $600,000 seniors housing project… Continue reading

VIDEO: Killer whale steals fisherman’s catch off North Coast

Fishing duel results in eager orca snagging salmon in Prince Rupert

Fate of accused in Canadian couple’s 1987 killings in jury’s hands

William Talbott’s lawyer says DNA doesn’t prove murder

Child killed after being hit in driveway on Vancouver Island

The driver of the vehicle remained at the crash scene and is fully cooperating

Eating sandwiches, putting on makeup behind the wheel could land you a fine

RCMP say if you cause an accident while eating you could be penalized

Cat badly hurt in animal trap was likely stuck for days, B.C. owner says

Blu, a three-year-old house cat, suffered severe damage to his hind leg after being stuck in trap for days

40 cats surrendered in apparent hoarding at B.C. home

Officers found the cats living among piles of garbage and feces, suffering from fleas

Vancouver Aquarium drops cetacean ban lawsuit in new lease agreement

Ocean Wise CEO Lasse Gustavsson called the updated lease an exciting new chapter for the aquarium

Thieves steal two $40K chairs featuring gold serpents from B.C. furniture store

Chairs believed to be the only two of its kind in Canada, police said

Rising gas prices force B.C. residents to rethink summer road trips: poll

63 per cent of respondents reported gas prices are impacting their day-to-day finances

Most Read