N.B. legislature committee calls for income tax cuts, hike in HST
Summary:
This article for CBC introduces idea from the New Brunswick committee which is a flat personal income tax rate of 10 per cent. They also suggest reducing corporate taxes to five per cent and bringing in child tax benefits similar to the federal plan. "These initiatives should significantly benefit New Brunswickers and accomplish many of the goals for restructuring the tax system of the province," the committee report says. A 10 per cent single rate would tie the province with Alberta for the country’s lowest tax rate. Companies also support this idea because the low tax rate will attract skilled workers. They also believe that reduce in personal tax will encourage customers to buy products instead of saving their money.
Connections:
There are three types of taxation system discussed in this chapter, which include progressive, regressive and proportion tax. The flat tax discuss in this article is the same as proportional tax, which mean one’s income level will not affect the percentage of income paid. The flat tax in New Brunswick would save everyone many dollars in the Maritime province. It would also ensure live for those who are in financially-unfortunate situations. With the flat taxation system, they don’t need to concern every cent for live; however, it would not achieve perfect vertical equity as the rich people pay more taxes. The flat tax system will provide all citizens with a system that everyone benefits from.
Reflections:
I believe the flat taxation system will have a short term effect on New Brunswick’s economic because it favors all citizens. Even though it’s economic recession right now, citizens would not need to concern too much on paying extra for tax; however, I think this system will not work out nicely once we deal with the recession. I don't think it’s a suitable system for citizens. It’s not fair that low income group needs to pay the same amount of tax as the high income group, because they will make a greater sacrifice in paying their taxes due to the fact that the money they pay in taxes means more to them than the amount paid by higher income groups.
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