Who are the elite in our society? They are the ones who are actually financially unaffected by Covid-19 and in particular are actually making more money this year than last. In Newfoundland and Labrador, most of our public servants are actually receiving a retroactive 2% raise back to April 1, 2020. They will receive a 1% raise again this April and 1% next April at a cost of $60 million/ year last year, $90 million next year and $120 million every year thereafter. This is all borrowed money. many will receive retroactive cheques of between $945-$2775 if they just signed. Recently Allied Health professionals, Teachers and CUPE all received these retroactive raises. They join NAPE, Nurses and ferry captains. The doctors and their NLMA are in negotiations at this time. The only ones left are the RNCA (Royal Newfoundland Constabulary Association) which expired last June and PAIRN (Professional Association of Interns and Residents).
We are in the middle of an election and our leaders are either avoiding the critical spending, deficit, and debt problems of our province or sugar-coating it. One party is proposing that we will grow our way out of these fatal problems. This is ill-informed and delusional. We have a $2 Billion problem and in order to solve it with growth we would need to double the following taxes:
1/ Personal Income Tax from $1.4 Billion to $2.8 Billion
2/ Corporate Income Tax from $323 Million to $646 Million
3/ Mining Tax from $112 Million to $224 Million
4/ Payroll (Health and Payroll Tax) from $115 Million to $230 Million
If it was possible to double these revenues (which it is not) this would bring in $1.95 Billion. This would solve the problem, however, there is no magical plan that could accomplish this. Please also remember that when we speak about Income tax and taxing the rich these are the numbers for Newfoundland and Labrador:
the top 1% pay 15.5% of tax
top 5% pay 36% of tax
Top 10% pay 51.4%
Top 50% pay 95% of tax
In Newfoundland and Labrador increasing taxes by 2% on the top 2 tax brackets would only raise $60 million per year assuming that these individuals did not move, rearrange their affairs or just not try as hard because of a lack on motivation due to excess taxation.
Now is the time to ask the difficult questions and make the decisions we have put off since 2011.