May
12
By Fin MacDonald
I was going to write this month about tax planning for 2013; but with the Provincial General Election on May 14, I thought an article on tax issues that the candidates for Member of the Legislative Assembly could address would be more timely. This article is being written in the second week of April; apologies if any of the issues I have raised have been dealt with by the candidates and parties in their campaigns by the time you read this.
So far (Apr 12, 2013) in the campaign the BC Liberals have promised to put a five year freeze on the Carbon Tax.
The BC Green Party has made eight tax promises including raising taxes on tobacco, lowering taxes on locally produced agricultural goods and shifting them to imports, incentives for business and individuals to be more healthy, extend the carbon tax and incentives for post-secondary graduates who remain in BC five years after graduation.
The BC Conservatives would repeal the carbon tax and promise not to introduce new taxes.
The BC NDP would raise Corporate tax rates, reintroduce the Corporate Capital Tax, increase tax rates on incomes over $150,000 from 14.7% to 19%, extend the carbon tax to oil and gas venting and raise the labour tax credit for the film industry.
Looking at the above I do not see tax measures that would affect the average tax payer. The elimination of the carbon tax might cause gasoline prices to fall, or it might cause profits to rise for the oil and gas industry.
Looking at some of the other provinces might prompt some questions. First on the list would be the Medical Services Plan premiums. No other province charges them, will any of the parties commit to removing them?
Second would be the refundable tax credits available to low income residents. With the end of the HST credit and the re-introduction of the BC Sales Tax Credit will there be any increase in the income thresholds? The amount payable was increased from $50/single, $100/couple in 2001 to $75/single, $150/couple in 2002 but the amount of income at which the Credit is reduced has remained at $15,000 for a single and $18,000 for a couple. Since 2002 the Consumer Price Index has risen 18% for all items and 28% for food in BC. A more realistic threshold for the reduction would be $20,000/single, $25,000/couple.
Another refundable tax credit available for low income people with employment income is the Federal Refundable Medical Expense Tax Credit which refunds up to 25% of the medical expenses. Because a minimum of $3,268 of employment or self-employment income is required for this tax credit, seniors are effectively shut out, when they need it most! Will any of the parties move to help seniors with their medical expenses?
Third, in Alberta the provincial Basic Personal Amount is $17,282 and in BC for 2012 it is $11,354 (and going down in 2013). This means people in Alberta have $5,928 more income that they do not have to pay Provincial Income Tax on than we do in BC. This would save a middle income BC resident $300 per year. Will any of the parties commit to increasing the basic exemption so that we can keep more of Our Money?
Looking at Alberta, the other obvious question is: Why do we in BC have a 7% Sales Tax and Alberta has none?
There are many other issues that will be dealt with in the Election Campaign. I've provided some tax questions through my lens of Helping You Keep More of YOUR Money.
Next time: Tax Planning for 2013.