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Prepare for More NDP Tax Increases

Author: Colin Craig 2012/05/01

You just saw a number of taxes go up in this most recent budget, but ask anyone who has actually read the last few provincial budgets and they'll tell you the writing is on the wall -- there's more to come.

You see, over the last 12 years, Manitoba's NDP government has spent more than its annual budgets projected 11 times.

Think about that for a second. Imagine if every year your boss asked how much your division needed in funding, you provided her with a figure and then you blew through your budget. Wouldn't she eventually question your managerial skills?

What's worse is each new provincial budget is built upon the cost overrun from the year before. That's part of the reason why the NDP has increased spending at more than double the combined rate of inflation and population growth over the past decade.

As the current approach isn't sustainable, this year the NDP government had to choose to control spending, raise taxes, rack up debt or discover some kind of large pot of gold.

Guess which two the government has chosen?

Despite rhetoric about cutting spending, this year's budget plans to spend $318 million more than what last year's budget estimated.

By 2014, spending is expected to hit $14.99 billion. Yet, just two years ago, the NDP expected spending to only reach $14.266 billion by 2014. Yes, in just two years, the NDP's 2014 spending estimate has increased by $724 million.

But enough about the future for a moment.

High spending is why the NDP raised taxes by $184 million in the 2012 budget. The NDP increased sales taxes on insurance, hair-care services, manicures, pedicures and tattoos by seven per cent.

Gas taxes are also up 2.5 cents per litre, but as the five per cent GST is applied on top of the provincial tax, the increase will actually be larger. It's a disturbing situation where raising one tax automatically increases another.

It's even going to cost you more to die. Well, maybe not for you directly, but for those dealing with your will as they'll have to pay more for provincial death certificate fees. Not to be outdone, birth and marriage certificates are also going up. Perhaps the government is encouraging people to live a life of solitude -- free of making babies, getting married and being in a position to administer a friend's will.

On top of all those tax and fee increases highlighted in the budget, Manitobans will also see a secret income tax hike again this year through a process known as "bracket creep." Manitoba is one of only three provinces that do not protect taxpayers for inflation in the tax system. The result -- this year, taxpayers will pay an extra $5 million or so in income taxes provincewide.

But what's most troubling about the tax hikes in the latest budget is Manitobans already pay the highest income taxes in Canada.

Visit Ernst and Young's (a well-respected national accounting firm) online income tax calculator and plug in $30,000 of income. It'll show you Manitobans pay more income taxes than in any other province. The same is true at the $40,000 income level. For higher incomes, Manitoba tends to float among the top four spots.

It's true the government moved forward with a few good initiatives to curb spending here and there in the recent budget. But it didn't do enough. Despite record tax revenue, high spending is driving up the province's debt by $47 per second.

As Manitoba is a province that is loaded with resources, a skilled workforce and talented entrepreneurs, there's absolutely no excuse for mediocrity and constant tax increases. We can do so much better.

However, unless taxpayers speak out about what's going on, get used to the tax increases.

 


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