Martyn Brown: Taxpayers beware of this election’s “green ghosts”

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      In the spirit of British Columbia’s election "fun and games", I have been equating each of the parties with my favourite circa mid-'60s childhood board games.

      The most obvious choice for Christy Clark’s B.C. Liberals is Monopoly: the triumph of Big Money that rides on lots of good luck, bad decisions by your competition, and a zeal for crushing the less fortunate who are also forced to pay "poor taxes", house repairs, and punitive hospital fees.

      Rich developers, ruthless landlords, costly mortgages, and "get out of jail free" cards: perfect for Clark’s scandal-ridden government, whose party has had a lock on power for 16 long years.

      What about the NDP, with six leaders since it was last elected? They were all done in by their own party’s usual suspects, after getting bludgeoned in the last four campaigns.

      The game Clue might be most appropriate.

      As the original "whodunit" party, the NDP’s cards and accusations are now all on the table. They have given us ample hints and indicators about what we should expect from that party’s own Colonel Mustard (a.k.a., John Horgan), from his nemesis, Mr. Green (dah!), and from the beguiling Miss Scarlet (always ready to kill with a smile).

      Only time will tell whether we are prepared to roll the dice and punish the ones who really did it to us and were rewarded for their deeds last time around.

      As if we need another clue. We all know already who misled all voters with her false suggestions, and who last time managed to get away with it by slipping through her secret passages. J’accuse!

      That leaves Andrew Weaver’s B.C. Green party. What game to choose for it?

      Something a little more obscure, perhaps? Something colourful, novel, and scary or not, depending on who you are and on how you look at it?

      As a child, pouring through the Sears catalogue to offer gift suggestions for my mom—er, for "Santa"—I once got infatuated with a new board game, now long gone.

      That game was Green Ghost. As Wiki has reminded me, it was billed as "THE EXCITING GAME OF MYSTERY THAT GLOWS IN THE DARK."

      Wouldn’t you know, I got my wish, Santa being Santa.

      Weaver is 56. He might remember that wondrous game, with its phosphor-laden figures and devices, which sadly, did not hold their light quite as I anticipated.

      On first inspection, it was miraculous. Certain to creep out anyone who wasn’t already lost in their Ouija board—perhaps the ultimate game for this election.

      BoardGameGeek describes Green Ghost like this: "Past the appearance, the game itself is pretty much the usual roll-and-move with a few twists…Players are not ensuring victory, but simply improving their chances in the end game, which is decided by the giant green ghost spinner."

      Clark is perhaps a bit too young for that game, but I see her nodding her head. Sounds a lot like the B.C. Green party.

      With the latest polls showing it now also haunting her party in unpredicted ways, as Weaver’s Green ghosts also haunt the NDP, especially on Vancouver Island, both she and Horgan have legitimate cause for concern.

      So should taxpayers.

      Witness this week's impressive "Rally for change", featuring Canada's ultimate green champion, David Suzuki. Despite the overwhelming sea of white faces and white hair, it was large enough to give both of B.C.’s two main contenders for government a bout of the heebie-jeebies. 

      The Greens are pumped at the prospect of winning a level of popular support that seems especially incongruent with the climate-be-damned times that Clark has done her best to foster.

      Granted, those same polls give the Greens precisely zero chance of forming the next government, and little chance of electing more than maybe a handful of MLAs.

      But that’s what they also said about Gordon Wilson’s tiny B.C. Liberal fringe party at this point in the 1991 campaign, in which it went from having no seats in the legisture to become the official opposition. So who knows? 

      More importantly, with even one or two elected members, the Greens would hold the balance of power in a minority government. So it would be foolhardy to ignore their promises and tax plans.

      Weaver seems to be hoping that Christmas will come early this year for his party, if his tried and true path to vote-buying pays off as he hopes. It will be attractive, no doubt, to legions of B.C.’s most disadvantaged, discounted, and disgusted voters.

      On virtually every plank in his platform, the Greens are offering those mostly undecided voters manna from Heaven.

      More funding for every need. More assistance than the NDP could dare to responsibly promise the needy. Bold new ideas that shine out as novel "solutions", however practical or not they are.

      The Greens' promised 30 percent provincewide foreigner buyers’ tax is sure to set many voters’ hearts aflutter. Especially those who are still smarting from last summer’s foreign buyers’ feeding frenzy in Metro Vancouver. It will appeal to many in Weaver’s own riding of Oak Bay-Gordon Head—Victorias last bastion of Brit-power and bluebloods, who proudly fly their Union Jacks as a statement of their heritage and cherished sense of community.

      After the last week, however, both the NDP and Liberals may be breathing a little easier.

      The Greens have given them both new targets to attack when the going gets rougher, in the lead-up to the leader’s debates. Whatever tax hikes Horgan’s NDP propose, they will surely pale in comparison to the ones already advocated by Weaver’s Greens.

      The Green ghostbusters now have an array of tax targets that might hit Weaver’s team hard, as its tax proposals are brought to light. I predict they will no go over well at all with many of the people from whom it hopes to win new support.

      A closer look at the Greens’ proposed tax hikes

      As I have previously indicated, however laudable the Greens’ proposal to more than double the carbon tax may be, it will be an ever harder political sell, as the prospect of a minority government with them holding the balance of power seems more plausible and likely.

      But it is homeowners whom I suspect will have the hardest time embracing the Greens’ tax plans.

      Homeowners such as myself, who are anything but rich, will not be at all keen on Weaver’s plan to eliminate the capital gains tax on principal exemption residences.

      That plan calls for measures "to tax lifetime capital gains in excess of $750,000 on principal residences". Say what? Think again, I say.

      That new capital gains tax would apply to many, many homeowners, including in Weaver’s backyard, which is largely populated by older folks who bought their homes for a fraction of what they are worth today. Could that policy cost him his own seat? Unlikely, but together with other tax proposals, it will cost him votes.

      In my riding of Saanich North and the Islands, previous interim B.C. Green party leader Adam Olsen needs every vote he can scrounge to pull off the victory that barely eluded him in 2013. Taxing 50 percent of the capital gains on anything those homes would generate if sold will not be popular.

      Many of them are now owned by lower- and middle-income families that were lucky enough to see their housing investments pay off. And remember, that additional income tax would apply on any homeowner’s lifetime capital gains on their principal residences.

      It could wipe out tens of thousands, or even hundreds of thousands of dollars, in investment earnings on people’s homes that lots of potential Green voters are counting upon to fund their retirements. The Liberals, in particular, couldn’t be happier, as it will send many of their disaffected past voters scurrying home.

      The capital gains tax on principal residences is a form of estate tax that would also severely punish families’ ability to help their kids. It would savage inheritances—a big deal for seniors especially, who already dread what the taxman will take from their children and family in estate administration taxes.

      What about the property transfer tax? The Greens want to dramatically increase that, to make it more progressive and much more expensive for most homes on the market, lower-priced condos aside.

      I like the goal of enhancing progressivity in property-related taxes, to a point. Some time ago, I also advocated a sliding PTT that would be far less expensive than what Weaver is proposing.

      But the Greens’ proposed PTT goes way, way further.

      It would impose a similar sliding property transfer tax that would go up with the value of the properties sold, from the current two percent on any property value in excess of $500,000, to as high as 12 percent at over $3 million.

      Weaver will need to be quite the salesman to sell that.

      On a home worth $1 million, the PTT would soar from $18,000 to $23,000—an increase of $5,000. On a home worth even $1.5 million—at or below the cost of many single detached homes today in Metro Vancouver—the PTT would go from $28,000 to $48,000.

      On a property sold for more than that? Well, you don’t want to know. It would cost a bundle. Tens of thousands of dollars extra. That would hurt all the more, knowing that the PTT was supposed to be "temporary", when it was introduced by the last Social Credit government, so many years ago.

      Similarly, as admirable as the Greens’ proposals are to make the home owner grant and property taxes more income sensitive—something I also previously suggested in the Straight—one homeowner’s tax win is another homeowner’s tax loss.

      The thresholds on income that the Greens are imagining for phasing out those property tax relief grants are no clearer at this point than the thresholds on property values they are proposing for new property surtaxes.

      Upper-income voters and paper-"rich"-only homeowners will not jump for joy.

      Nor will rural homeowners be too happy to see their home values depressed by a new 30 percent foreign buyers’ tax, which would be especially calamitous in non-price-pressured communities.

      North of the Malahat on Vancouver Island, for example, it could only hurt house prices that are still far below those in Greater Victoria or Metro Vancouver. In those communities, it is still pretty much a buyers’ market, as it is in many Interior rural communities that are struggling to retain their resident populations and have high unemployment.

      A 30 percent, provincewide foreign buyers’ tax probably would indeed burst the bubble on home prices. But not in a good way for anyone who is already banking on his or her higher home value in downsizing, to help their kids buy a home, or to help fund their retirement.

      Don’t get me wrong. There is lots in the Green party’s housing policy that is forward thinking and sure to be welcomed by those who want or need more assistance. Especially if they still believe in Santa. Which is to say, it is very, very costly, and largely unrealistic.

      Their just-released policy on income security is equally full of sky-is-the-limit spending promises that none of its intended beneficiaries will do anything but cheer. Those on lower incomes will be especially appreciative.

      Those massive spending hikes for persons on income assistance, for persons with disabilities, and for shelter allowance rates will haunt every NDP candidate, whose less profligate platform will not be able to match those promised expenditures, however noble they are in principle.

      Same goes for the Greens’ proposed $205 per month low-income-benefit and its proposed "basic income pilot project".

      All bold ideas and welcome aid for those in need, if money is no object.

      The same could be said of the Greens’ multibillion-dollar plan for free early childhood education for three and four year olds, their plan for free daycare for parents with children under three, and their imagined subsidy of up to $500 for stay-at-home parents with very young children.

      Fun and games, or serious commitments? You be the judge.

      Green candidate Adam Olsen is in a tough fight in Saanich North and the Islands.

      But remember, in getting rid of MSP premiums, the Greens also want to offset that lost revenue, not abandon it altogether, as the NDP propose to do over time. They want to increase health funding with new revenue, not cut health services, as the Liberals will effectively do.

      Their solution? The Greens would simply raise income taxes and impose payroll taxes to make up all of that lost health premium revenue, to mirror Ontario. It would mean adding over $2.5 billion to income taxes and payroll taxes that are now paid for through MSP premiums.

      To understand how that might impact income tax rates, I would urge all taxpayers to look at the table on page 122 of the latest provincial budget.

      Ontario’s income tax are far higher than B.C.’s at every income level. About $1,200 more, for example, on a typical income of $80,000, or $2,000 higher on incomes of $100,000.

      Eliminating MSP taxes is one thing—and hugely popular. Adding those taxes right back, albeit in more fairly distributed form, is quite another. Most "middle class" families wont take kindly to paying higher income taxes, which are currently the lowest in Canada on the first $120,000 of income.

      Again, the goal of progressivity is great until the true tax costs of redistributing existing tax burdens are really understood and felt by those who they stand to impact the hardest. Which is not always those with the deepest pockets, who might hate those higher taxes, but can ultimately afford to pay them, unlike middle-class taxpayers who also feel their pinch.

      In short, the Greens have proposed a plan that is sweeping, controversial, and arguably commendable; but it's one that is more costly than most taxpayers so far know, especially for many homeowners and in its broader budget impacts.

      Both the NDP and Liberals can and will happily play with that, the more that they perceive the Green threat to their respective support bases to be.

      We know how the Greens plan to fund some of their big-ticket items. Their full platform promises to reveal more on that point, and on the larger question of fiscal management. It should be interesting.

      We know how B.C.’s governing "monopolist party" plans to go about getting its loot, and who it plans to hurt in the process of holding the line on spending, to credibly balance its budgets.

      Today, the NDP will release its "fully costed" platform. I look forward to that game of clues as well, which I expect will be much less far reaching in its proposed tax hikes and much more focused on only hitting those with the highest incomes. We shall see.

       

       

      Martyn Brown was former B.C. premier Gordon Campbell’s long-serving chief of staff, the top strategic advisor to three provincial party leaders, and a former deputy minister of tourism, trade, and investment. He also served as the B.C. Liberals' public campaign director in 2001, 2005, and 2005, in addition to his other extensive campaign experience, and he was the principal author of four election platforms. Contact Brown at  towardsanewgovernment@gmail.com.

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