HALIFAX— If Nova Scotia hopes to move forward, the current tax system must change. Cuts to corporate taxes and income taxes for the highest earners and increasing reliance on consumption taxes will not help the majority of Nova Scotians, nor will they help us to build a province that is prosperous and just.
The CCPA-NS’s third budget primer, Nova Scotia Budget Watch 2015: Tax Changes: What Principles, in Whose Interest? provides Nova Scotians with evidence of the need to rebalance the system to restore principles of fairness and justice, which would strengthen our economy and our society as a whole.
“Our tax system is a key democratic institution that serves to ensure that our governments have sufficient revenue to fulfill their obligations to our community,” says Christine Saulnier, Nova Scotia Director of the Canadian Centre for Policy Alternatives. “To build a real sense of community in Nova Scotia, we have to include our least fortunate citizens. To provide equal opportunities to everyone requires financial resources—it is only fair to ask Nova Scotia’s most fortunate citizens to contribute a portion of their rising incomes.”
Government priorities must be based on evidence. Are all proposed tax changes tied to explicit policy objectives, rather than a simple increase or a decrease in revenue? Who should pay more and who should pay less? The highest income earners in our province have enjoyed thirty years of tax cuts and rising incomes from both direct earnings and capital gains: the very rich now pay less in total taxes as a portion of their income than the poorest among us. Not only can the government afford to raise more from taxes on the very rich in our province, it must, if it wishes to address the needs of the majority of its citizens.
“The progressive nature of our income tax system means that any across-the-board tax cuts will be the most advantageous to the wealthiest among us. Take ‘bracket creep’ for example: our analysis shows a $19 average gain in income over 5 years for lower-income households (those earning $23,619-$33,486), and nothing for those earning under $23,618 (most of whom are on fixed incomes). Compare that with an average gain of $804 for the top 5% of earners. Once again, an attempt at fairness is fairer to those who need it the least,” says James Sawler, Economist at Mount St. Vincent University.
Sawler goes on to say: “This one tax cut will cost Nova Scotians almost $90 million. That’s $90 million of lost revenue that could triple the amount currently spent on regulated child care, or be used to address other strategic priorities like sustainable energy development, or poverty reduction. Nova Scotians deserve a taxation system that can equitably gather resources to make sustainable investments in this province.”
This budget primer is the third in our series, designed to help Nova Scotians understand the government’s budgetary decisions. This primer and the one on fiscal choices, as well as the gender lens primer can be downloaded at: https://www.policyalternatives.ca/nova-scotia-budget-watch-2015.
For interviews and more information, contact Christine Saulnier, Nova Scotia Director, CCPA, 902-240-0926, [email protected].
CCPA is an independent, non-partisan research institute concerned with issues of social, economic and environmental justice.