Soaking the rich

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In a sense, a province’s budget is less a definitive statement of a particular government’s approach to number-crunching than a metaphor for society’s broader tolerances and expectations. That’s why these annual exercises always manage the simultaneous tricks of going too far and not quite far enough.

So it is with the Gallant government’s first budget, released Tuesday, a scattershot of spending and revenue decisions all putatively designed to address New Brunswick’s fiscal morass; just not right away, or in any aggressively uncomfortable manner, thank you very much. Indeed, emerge from its pages with a reasonable sense of the Liberal government’s vision for the province: Go ahead, I dare you.

To be fair, we do know a few things that, before this week, we may not have fully appreciated. We know, for example, that the department of finance likes building “rainy-day” funds almost as much as it does picking the pockets of the well-heeled. We know that the Grits – who deploy a rhetorical arsenal that brims with bon mots about “fairness” – only really expect rich, older folks to pony up to the plate (at least for the time being; next year, we are told, will be whole new ball game). And we know that, despite these and other measures, an estimated $477 million deficit in 2015-16 is just about as bad as it gets (though, not quite), even while the province’s long-term debt balloons to $12.6 billion.

“It would be easy to avoid making difficult decisions and leave the problems we face to the next generation,” Finance Minister Roger Melanson told the Assembly. “We are not going to do that. Our government was elected to lead and this means making difficult and sometimes even unpopular decisions.”

That, presumably, is why, anyone who earns between $150,000 and $250,000 a year in New Brunswick will now pay 21 per cent provincial portion of income tax (those earning more than $250,000 will face 25.75 per cent), up from about 18 per cent.

As the Saint John Telegraph-Journal reported, “Seniors who have managed to accumulate liquid financial assets will see those included in calculations of how much they must pay for long-term care in places like nursing homes. . .On the plus side, the Liberal government is establishing a New Brunswick Seniors Home Renovation Tax Credit. It will give seniors a tax break on home renovations. ‘We want our seniors to be able to stay in their own homes as long as they can,’ Melanson said.”

All of which is code for: Stop cluttering the province’s increasingly costly hospital wards and emergency wings. And that’s a message even the geriatric and infirm among us can get behind.

Fundamentally, though, the most these tax increases are expected to raise annually is $30 million, a comparatively paltry sum when you consider the obvious alternative: a modest hike in the HST. In fact, a one-percentage-point boost in this consumption tax would generate about $126 million. It would also be cheaper to manage and easier to collect than income taxes. Moreover, when properly executed, with due regard for the impoverished and working poor, it’s far fairer than any current brand of income tax. 

Of course, few governments arguing the affirmative in this country have ever won that particular debate. For their part, Mr. Gallant and Mr. Melanson are clearly not ready to test these tolerances and expectations in New Brunswick

Still, that’s the wonderful thing about a provincial budget. Every 364 days, or so, we all get another crack at going too far or not quite far enough in our public and private economies.

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