from CBC:
Higher taxes on rich may miss revenue targets, experts say
Finance Minister Roger Melanson raised taxes on New Brunswick's wealthiest citizens in his March budget
By Robert Jones,
CBC News Posted: Apr 14, 2015 8:26 AM AT|
Last Updated: Apr 14, 2015 8:26 AM AT
Some leading Canadian public finance economists are questioning whether the Gallant government can raise anywhere near the $30 million it has budgeted from its new taxes on the wealthy.
"It assumes that the people who have access to the best tax advice in Canada are going to fail to take it," said Kevin Milligan, an economist at the University of British Columbia.
"I don't think that's a great assumption. I would be very cautious in expecting a large revenue windfall."
Finance Minister Roger Melanson established two new high-income tax brackets in his budget to generate $30 million in new revenue.
New Brunswick's new top rate, for taxable incomes above $250,000, was set at 25.75 per cent. That's the highest in the country and 80 per cent more tax than the province was charging at that that income level just three years ago
Jack Mintz, an economist at the University of Calgary, a long-time tax adviser to both Liberal and Progressive Conservative governments in New Brunswick, says studies at the federal level show raising rates on high-income earners increases the use of shelters and other tax avoidance techniques.
"Raising the [top] rate is really done for more fairness reasons than for revenue reasons because you don't raise that much revenue at all," said Mintz.
"It would be nice if we had evidence-based public policy."
New Brunswick's top rate on high incomes was just 14.3 per cent three years ago.
read more:
http://www.cbc.ca/news/canada/new-br...-say-1.3031842
personal note - My prediction is that this 80% increase in the highest marginal tax rate will not generate the $30M that the government hopes. I suspect the revenue recovered will be more likely $10-15M. A truly paltry sum given the $450M deficit and not really worth the bother. The only real winners here will be the tax accountants and the lawyers. In return, the province gets a significant black eye as it will be forever known as the "highest tax jurisdiction in North America". This type of reputation will be priceless in driving away high income earners who might have otherwise considered moving to NB.
Stupid, stupid, stupid.
Of course, this is what I have come to expect from the Brian Gallant Liberal government. We may drive away all the movers and shakers that the province needs to grow it's economy, but at least we will have $1B of shiny new asphalt roads around the province,