VANCOUVER (NEWS1130) – Both sides in the transportation plebiscite are still trying to sway voters but the ‘yes’ side hasn’t really broached the subject of tax breaks to entice lower-income families to side with it.
Would people be more willing to vote ‘yes’ in the plebiscite if the government offered a tax break to low-income earners? There is more than one answer.
One is a political viewpoint; the other looks at it in the terms of raw numbers from the mind of an economist.
The idea is all about optics versus actual benefits, says Dr. Sumeet Gulati, an economist with UBC.
“The political compulsions may be different than what economists like to push. Still, I think the optics would be better. It’s a lot like the BC carbon tax, where we said we’re going to lower income tax rates for the poorest in conjunction with the raising of the carbon tax. So we could do something like that here but the optics need to be done in a way that says ‘we’re not going to hurt the poor,’ because the poor probably realize it’s going to hurt them more.”
He says the tax is regressive.
“We would definitely say no for choosing [tax breaks on] individual products because you end up making people buy more of those products then you need to. But it is true that consumption taxes get borne as a larger proportion of the poor’s income than the rich. So you should ideally rebate consumption taxes back to the poor but more generally, not actually choosing products. This is what the theory would tell us to do.”
Gulati also admits that at this point, it’s likely too late to make any changes to the plebiscite.
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