NDP's Backdoor Taxation Hard to Justify

Winnipeg Free Press, November 1, 2012 | Go to article overview

NDP's Backdoor Taxation Hard to Justify


"A rose by any other name would smell as sweet" -- Shakespeare

"A tax by any other name would bite as deep" -- Green

Prior to the last election the NDP promised that its platform for re-election would be implemented without any tax increases. It continues to assert that this promise is being kept. In the meantime, provincial revenues are budgeted to increase by $452 million.

That's an increase of about seven per cent over the previous year, but the government, by sleight of hand, maintains that this has been done without an increase in the tax rates. If pressed they will argue that the sales tax, the income tax, the payroll tax rates have not increased and accordingly their promise has been kept.

The government's rationale gives us some insight into the proposal that the MPI use revenues obtained from premiums to help finance road safety infrastructure.

The government argues that road safety would reduce accidents, which would result in lower insurance premiums. If the argument is correct, and I do not challenge it, then why would the government not use its general revenues to make such changes?

When Autopac was introduced in 1972, the reasons given were quite satisfactory and explicit. The public could provide coverage more efficiently and less expensively than the multitude of private insurers then operating. It would be outrageous for the government to have suggested that the private insurers increase their premiums to contribute to government road improvement programs. There is no example of any government, anywhere imposing an obligation on automobile insurers to pay for road improvements.

If Autopac started to do so it would make it more difficult to compare Autopac rates with those in the private sector. Perhaps this is one of the reasons that the government has commented favourably on the Autopac proposal. Anything that obscures analysis of performance is attractive to the government.

The Autopac proposal is not the first or the only time that the government has used alternative forms of revenue collecting which they claim are not an increase in taxation rates. Although the retail sales tax has stayed at seven per cent, it has now been applied to a whole series of purchases that were not included in the first place. Retail sales tax revenues will rise by over $200 million. Much of this increase can be attributed to previously exempt purchases, now included, such as haircuts and beauty parlour services over $50, which will primarily affect women. …

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