With the economic troubles, some of Canada’s provincial governments have taken action on cutting certain taxes, and making an easier lifestyle for their citizens. One of these provinces is New brunswick. The government plans to cut corporate income tax to single digits, which would give them the lowest corporate tax level in Canada. A flat 10% income tax has been recommended by the Select Committee of Tax Reform, which would begin in 2009, and fully shape up to its full potential by 2012. With this, New Brunswick would have one of the best investment climates in Canada, claims Niels Veldhuis, the director of fiscal studies at the Fraser Institute.
The big picture here is taxes. With a decrease in income taxes from a non flat tax of a maximum of 18% to a flat tax of 10%, spreading the wealth among the province would be of major concern. Although this new tax would help out many working-class citizens in NB and increase the financial position of the province among Canada, a lot of people in need of extra health care may find it troubling that the lack of taxes paid by much wealthier people may not be able to cover their healthcare costs, as they once did. This system has been used by the US for years, and clearly, has not worked. There is a huge gap between the rich and the poor now, because the main goal of the Republican government in the past has been to keep taxes fairly low, which helped the rich get richer, but made the poor helpless in their financial needs. With the help of Barack Obama as president, their tax rates will soon become much more progressive, mirroring most of the provinces in Canada.
This new plan by NB, I believe, will not be beneficial to the province in the long run. Even though it will help out the province through this harsh economic time, government funds will be much lower, by 2011/2012. These funds could be used for better healthcare, funding for less fortunate families, and rebuilding certain areas in the province that need it. I believe the entire country should stick to one system only, which is progressional tax. Although I do not enjoy the thought of paying higher tax rates as income goes up, this system has been implemented for many years, and has been working since. So, why change a good thing?
http://www.cbc.ca/money/story/2008/12/17/nb-tax-reform.html
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History has shown that during a Depression, it is good for the government to pump money into the system. Economies can be re-started if people have money that they aren't afraid to spend, which they can gain if their income tax is cut down. Worrying about the health care system and its funds shouldn't be a main concern because when it comes down to it, having money in the first place is the most important thing. If people are starving, it will be money to get them food that will help them - not a hospital full of brand new equipment.
- L. Nguyen
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