Monday, October 03, 2005

Manitobans taxed to the max . . .

the CTF has been saying this for years. More on this from the Winnipeg Sun & the Winnipeg Free Press (subscribers only)

We pay too much in taxes: report
Competitive edge lost, accountants' group says

Mon Oct 3 2005

By Mia Rabson

MANITOBA'S taxes are among the highest in Canada and have caused the province to lose its competitive edge, a new report says. The Chartered Accountants of Manitoba today released the first instalment of The MB Check-Up, a three-part report outlining Manitoba's attractiveness within Canada as a place to invest, live and work.

Uphill battle

The first phase dealt with investment, and it found that because of high business and personal taxes, Manitoba faces an uphill battle when it comes to attracting people to the province.

People moving to Manitoba should be prepared to pay provincial income taxes that are significantly higher than in Ontario and the other western provinces.

For example, a two-income family of four earning $90,000 would pay $2,880 more than they would in British Columbia or Ontario, and a two-income family of four earning $60,000 would pay $1,380 more than a family in Alberta. (See chart on page A4) Manitoba has reduced its corporate tax rate 1.5 points since 2002, but at 15.5 per cent, it still has the second-highest corporate tax rate in the West. Only Saskatchewan, at 17 per cent, has a higher corporate rate.

Gary Hannaford, CEO of the Institute of Chartered Accountants of Manitoba, said he gives the NDP government credit for reducing taxes somewhat in Manitoba, but said it hasn't done enough to keep the province competitive with tax levels in other provinces.

"We're moving in the right direction, but it's not far enough or fast enough," Hannaford said.

He said when a business is looking at places to set up shop or expand, tax rates play a huge role in the decision-making process. When they look at Manitoba, they see high taxes.


Although Manitoba plans to further reduce the corporate income tax to 14 per cent by January 2007, Hannaford noted British Columbia has already committed to reducing its rate to 12 per cent, and Alberta's is already at 11.5 per cent. Comparing after-tax profits of corporations, the report found Manitoba lagged behind its western counterparts.

The average Manitoba corporation had after-tax profits of just 8.2 per cent of the provincial gross domestic product, compared to 17 per cent in Saskatchewan and Alberta. The Canadian average is 10.7 per cent.

Hannaford said Saskatchewan's higher corporate tax rate is offset by higher profits in the oil and gas sector.

Speaking about Manitoba's high personal taxes, Hannaford said the province needs to become more competitive in the eyes of higher-income earners if it wants to drive economic growth and attract businesses to Manitoba.

"People who are leading businesses are people earning at that $80,000 level or higher," he said.

One area in which Manitoba did compare somewhat favourably was its debt-to-GDP ratio. The ratio, a comparison of what a province makes versus what it owes, is 18.9 per cent. The figure does not include the debt of Crown corporations such as Manitoba Hydro, which has a debt larger than the provincial government's.

Alberta has a zero debt-to-GDP ratio, and B.C.'s ratio is slightly better than Manitoba at 18.2 per cent. But Saskatchewan is at 20.8 per cent, Ontario is 24.5 per cent and the national average is 22.1 per cent.

Moreover, Manitoba's ratio has steadily declined over the last five years, from 22.6 per cent in 1999 to 18.9 per cent last year.

Manitoba Finance Minister Greg Selinger said the report's figures are accurate but not all-inclusive. He said the province has the lowest cost of living in the country, based on utility rates, car insurance and housing costs. He said that while our taxes are higher, in the end it's still cheaper to live and do business here.

"We end up winning on cost of living," Selinger said. "This only gives part of the story. People don't make decisions based on one factor -- they look at everything."

Hannaford acknowledged cost of living is a factor and said the next two instalments of The MB Check-Up take that into account. He said Manitoba comes off better in both of them.

Tory Leader Stuart Murray said Manitoba's record on taxes and competitiveness is shameful.

He said a recent budget update in British Columbia listed Manitoba as having the highest taxes for middle-income earners of any province in the country, not just Western Canada.

"Mr. Doer should be embarrassed," Murray said of Premier Gary Doer. "To pay the highest taxes in Canada is something no government should be proud of."

Murray said even Saskatchewan has surpassed Manitoba. He said the province has to outline a long-term, significant tax-reduction plan, and the government must rein in its spending.

6 comments:

Union Member said...

They also have the lowest utility rates in the country, it is called a trade off and the only people that are complaining are those that have enough money to pay for these services out of their own pocket. The majority of people are happy with the taxes and would be OK with an increase, as long as they got value for their money.
It's not about $ amounts or %, never has been, it's about value for the amount put in and people were quite happy until a right wing govt started cutting services and increasing taxes. This lead to a large disparity in cost vs value, which the CTF jumped on and spun it as an anti-tax movement or is it anti-services. It is time to restore these services to proper levels, then we talk about tax relief.
Don't fall for this BS. I have lived in many countries in the world, including the USA, and if they don't get you one way they get you another. It is inevitable.
Why should choice only be for the wealthy ?

Shawn said...

Who gets to choose the proper level of service? The wholly unbiased public service unions?? With private services, people have the option of having their garbage picked up daily, weekly, monthly, whatever the deem necessary. Why should I pay for someone else's choices? If slavery is no good for poor people, I would hope that extends to those who have been able to get ahead in life as well.

Union Member said...

With private services, people have the option of having their garbage picked up daily, weekly, monthly, whatever the deem necessary.-Quote "Shawn"

Or not at all because they can't afford it. Isn't this what I mean by choice only for the wealthy ?

Why should I pay for someone else's choices?.-Quote "Shawn"

Your not, your paying for a democratic consensus of services. No one gets their way but no one is left out. Sounds fair.
Shawn- a few (understatement) years ago, we as a society decided to pool our resources to meet the needs of all, not just the privileged. This was called democracy. It was understood that in order for all to benefit from a society's output or growth that the tax system needed to be directed to the benefit of everyone, not the just the crown. Thus through many wars and demonstrations, we reached a point where the disparity in society was greatly reduced. But then came along the apologist organizations for the wealthy. With the money and the reach of the media. They have quickly brainwashed those that benefit the most from this set up to believe they would benefit from a dismantling of the current system.
It seems you would prefer a corporatist or anarchist society ???

Shawn said...

Theft with the consent of a majority of citizens is still theft. The largest part of tax money is wasted. Look at expenditures:
1) healthcare is a joke. Better to allow people RRSP-style savings to buy insurance for large problems and save money to pay out-of-pocket expenses.
2) social programs are mostly examples of you get what you pay for. Pay single mothers extra than families, watch the number of single mothers explode. Paying people to exhibit poor behaviours does not tend to halt their spread.
3) the war on poverty thru the medium of handouts is pretty useless. Better to have them work at whatever job they can find and then supplement their income. At least they are earning job skills and gaining the discipline of going to work everyday.

The socialist pablum so readily dispensed in previous comments has been shown by history past (USSR, Cambodia, etc.) and present (Cuba, North Korea, even Germany and France to a lesser degree) to be intellectually fraudulent. Marx and Engels were flatout wrong and about 100 million people are dead as a result of their attempts. Try reading de Soto and Friedman, they offer excellent suggestions to minimizing poverty without resorting to economic cannibalism.

As to my preferred method of governance, how about a capitalist society which encourages economic growth as the engine to pull everyone along no matter where they sit on the train? As regards the less well-off, provide strong incentives for charitable giving. Saskatchewan loves to brag up its generous citizens, would that stop if the government got out of the charity game or would people (with more money in their pockets) increase their personal generosity?

Union Member said...

I will answer each point.

1) healthcare is a joke. Better to allow people RRSP-style savings to buy insurance for large problems and save money to pay out-of-pocket expenses.

-What about healthcare is a joke ? Is there a system that isnt a joke ?
What if they can't afford to pay out of pocket ?
Would you have them go with ou ?

2) social programs are mostly examples of you get what you pay for. Pay single mothers extra than families, watch the number of single mothers explode. Paying people to exhibit poor behaviours does not tend to halt their spread.

_ The same could be said about most businesses and corporate welfare. I don't think the number of single moms is because it is easier to become one. It is still a harder life then being married and raising a family. I don't think anyone make this choice out wanting to be a single parent so they can recieve government money. Usually it due to abuse or neglect on the other parents part.
Should we just let the market take care of these people ?

3) the war on poverty thru the medium of handouts is pretty useless. Better to have them work at whatever job they can find and then supplement their income. At least they are earning job skills and gaining the discipline of going to work everyday.

_ I can not argue with income top off for low income workers,coupled with training and a big help up.But there are still people for what ever resaon are not employable and the way we treat them is how are soceity should be judged.

Once again, please leave your refernces to the Sovietesque nations. Anyone with a gr 8 education should know that the they are toitally unrelated. I have never argued that the free market should be dismantled. If I am a communist then you would be a fascist.

As to my preferred method of governance, how about a capitalist society which encourages economic growth as the engine ...

Maybe it is time to concentrate on on Human development and growth. We have enough Wal Marts.

Shawn said...

1) Charity. People are very generous to the less well-off when they have some financial freedom to be generous. Up until the Great Depression private charities were the norm throughout North America. Ironically, foolish financial policy was a major contributor to the Depression and even helped prolong it. For a brief summary check out Friedman's Choice and Freedom.

2) I too am appalled by corporate welfare (Bombardier, the CBC, EDC, etc.). If a business is so poorly run that it cannot survive, it is almost criminal to take tax money from other businesses and support it. This is particularly odious in the case of firms which compete with the first one. Social programs when measured by their stated goals are almost always train wrecks.

As regards the soviet stuff, I am not claiming you are seeking to institute a Canadian gulag system. My point is that these methods have been tried several times with lousy results. Bread lines in soviet Russia, famine in North Korea, etc. Systems based off the "from each according to ability, to each according to need" always end up generating a surplus of need and a shortage of ability. As far as me being a fascist, it seems rather unlikely given my fundamental belief in the virtue of private property, contract law, and limited government. So far as I am aware neither of these systems has much use for any of these. Are you aware of the limited constitutional protection afforded private property in Canada?

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