“Dramatic” Campbell tax cuts benefit high income earners like doctors, administrators the most

Liberals’ broken promise will increase pressure on health care budget in 2002

It was never talked about during the campaign, but yesterday Premier Gordon Campbell delivered deep tax cuts that are targeted to benefit high income earners the most. And while the average HEU member will receive a tax break of about $540 a year, or about $21 a pay cheque when the cuts come into full effect in 2002, higher income earners in health care like doctors and administrators will cash in big time, says the union’s secretary-business manager Chris Allnutt.

“Clearly,” says Allnutt, “Campbell’s tax cut plan is geared to deliver the greatest tax relief to those who need it least — British Columbians at the top end of the income scale.”

While recognizing that the $540 tax cut will benefit the average HEU member who earns about $35,000 a year, Allnutt says that the real windfall was delivered to doctors and high-paid health care administrators. “Take a doctor making $200,000” says Allnutt. “This tax cut amounts to $7,800 a year. And the health care boss who earns $150,000 annually will pocket $5,300 more a year thanks to Campbell.”

And he warns that there’s another shoe to drop down the road, as the Liberal government will have to make up $1.5 billion in reduced revenue — about seven per cent of Victoria’s overall budget — that the tax cut will cost. He expects that the health care budget, which makes up about 40 per cent of all government expenditures, will be under even greater pressure than the union had first thought.

“The irony is HEU members could pay with their jobs or through higher user fees in the future for Campbell’s tax cuts that benefit doctors, administrators and B.C.’s wealthy elite.”

Meanwhile, the progressive Canadian Centre for Policy Alternatives says it was shocked and surprised by the announcement. The Vancouver-based research institute, of which HEU is a member, says Campbell’s tax cut plan make B.C.’s tax system even more regressive — the higher your income, the bigger your tax cut.

The CCPA says the tax cut windfall for the wealthy exposes the Liberals’ real agenda, and it warned that the idea that tax cuts are revenue neutral and will pay for themselves through increased economic activity that will then generate more government revenue is a “delusion.”

“These tax cuts will put serious pressure on our ability to pay for existing public services” like health and education, the CCPA says.