B.C. tax cuts shift costs to middle and low income families - Child & Family - study finds rising health care costs offsets benefits of tax cuts in British Columbia - Brief Article

Community Action, August 19, 2002

VANCOUVER -- Provincial income tax cuts have been offset by increases in health premiums and other fees so that many middle-and low-income British Columbia families are actually worse off, according to a new study by the Canadian Centre for Policy Alternatives.

A course of physiotherapy, a child entering college, or a baby in daycare can mean the difference between breaking even and falling into the red, said Sylvia Fuller, author of Cost Shift: How British Columbians are paying for their tax cut. Forty-seven per cent of British Columbians receive a tax cut of $425 or less and 77% receive savings of $869 or less, the study found.

It profiled nine hypothetical individuals and families with different income and cost scenarios. The examples included:

* a single individual earning $30,000 who loses $31 more than she gains if she requires a course of physiotherapy and an eye exam;

* a family of four with a household income of $35,000 loses $359--more than the value of their tax cut--with the MSP (medicare) premium;

* a family of four with an income of $60,000 remains ahead by $130 even after the addition of MSP, eye exams, and a course of chiropractic treatment;

* a single individual earning $150,000 gains $4,529 after the MSP increase, an eye exam, and a course of physiotherapy.

The income tax cuts make BC'S tax system more regressive and shift costs to low income earners and the sick, Fuller said. Individual British Columbians can check their own bottom line by using the CCPA'S web calculator.

www.policyalternatives.ca 604-801-5509