Premier Greg Selinger wants to raise taxes. Yes, and in other breaking news, the sky is blue and the grass is green. But don’t stop reading. He’s trying to repackage his next tax hike to sneak it past voters. Look closely because it’s important to read the warnings.
Premier Selinger is eagerly watching other governments increasing taxes on high-earners.
“I note many jurisdictions have implemented a [high-income] surtax already across the country,” said Premier Selinger. “We’re working our way through this consideration right now.”
Well, that sounds popular. Robin Hood stole from the rich to give to the poor, right? Of course, the rich guy Robin Hood robbed was Prince John (the government) and the money went to the poor (people). It’s a bit different to take more money from high-earners to give to a government that’s already collecting more money than ever. That said, Premier Selinger says higher taxes on rich people would be offset by tax cuts for the middle class.
Let’s look at the premier’s template for this plan: Alberta. NDP Premier Rachel Notley recently imposed higher tax rates for high-income earners that top out at 15 per cent for income above $300,000.
Manitoba’s top tax rate is 17 per cent and it starts at $67,000.
Think about what that means: Manitobans making more than $67,000 are paying higher taxes than Albertans making more than $300,000. Many Manitobans are no doubt hoping Premier Selinger copies Alberta tax code because it would save them money. The rich, as well as the definitely-not-rich, are already paying a lot of tax in Manitoba.
There’s another problem: the plan doesn’t work. Prime Minister Justin Trudeau also promised to cut taxes for the middle class and pay for it by raising taxes on the rich. Prime Minister Trudeau said the government would collect an extra $2.8 billion by taxing high-earners. Now the Liberal government estimates that number is about $2 billion. The C.D. Howe Institute, a think tank where Finance Minister Bill Morneau used to serve as chair, says that number is less than a billion. That means the tax hike on the rich won’t be nearly enough to pay for a middle-class tax cut.
Which brings the topic back to the overall validity of Premier Selinger’s plan.
First, Premier Selinger clearly wants the majority of voters to think their taxes won’t go up. It’ll be the rich guy who gets hit. But all taxpayers should be skeptical. Premier Selinger raised taxes on everybody when he raised the PST. If Premier Selinger says he’s going to raise taxes again every taxpayer should expect a bill.
Second, the idea that Premier Selinger would lower taxes for the middle class is laughable. Past behaviour is the best predictor of future behaviour and Premier Selinger doesn’t have a tax-cutting record. There is no reason to believe a tax hike for the rich would come with a corresponding cut for the middle class.
Third, another tax hike won’t fix Manitoba’s problems. Premier Selinger raised the PST, yet Manitoba’s deficit continues to rise. As long as Premier Selinger refuses to consider trimming government spending he’s going to have to find new revenue streams and everyone one of those streams ultimately comes back to the taxpayer.
Don’t be fooled. Premier Selinger wants every voter to think it’ll be someone else’s taxes that go up. But that’s simply not true. If Premier Selinger gets another chance to raise taxes it’s a good bet that every taxpayer will ultimately pay for it.
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