A Regular Taxpayers Manifesto

Dear New Brunswick Members of Parliament and MLAs:

We have three kids and no defined benefit pension plans (like most Canadians in the private
sector). We have to save for most of our retirement, maternity leaves, university, and major
expenditures in dollars that are taxed at 48-53%, like many other Canadians.

My husband is a high-earning employee who works 60+ hours per week and I am self-
employed, having given up my full-time job to take on the majority of household and childcare
responsibilities. Our income (which we cant split) puts us in the top 5% of Canadian earners
and I wouldn't dream of asking anyone to feel sorry for us.

This year, we will likely pay at least $50,000 more tax than the physician down the street with
the same NET income and family situation.

Tax breaks aren't free. When we give any group a tax break, the rest of us pay the difference.
We have the right to discuss whether these tax breaks serve a valid societal purpose without
being blackmailed by physicians threatening to leave the province. Im tired of the extortion
from physicians threatening to leave the province every time someone examines their
taxpayer-funded compensation.

A few points relevant about physicians:

Since Medicares inception, physician fees have always factored in that physicians are
self-employed. Their fees compensate them for their overhead, administrative
inconvenience, and lack of pension plans.
Physician fees have risen at rates greater than inflation for the past 20 years. Other
Canadians certainly can't say the same about their salaries, fees, and revenues.
Canada experiences a NET influx of doctors from other countries. Canadian doctors
aren't leaving-- other people want in.
The US is not that attractive an option. Doctors in the US pay a flat corporate tax rate of
35% and pay much higher statutory payroll taxes and insurance premiums. Their
overhead is significantly higher than Canadian physicians and their tax regime leaves
little incentive to leave money in a corporation. They pay taxes on their net income in
the year they earn it.
Even if Canadian doctors are forced to pay taxes like the rest us, nothing will change the
fact that they still earn more than 99% of the rest of Canadians. How much is enough?

This current PR campaign by physicians is an abuse of power and influence and reveals a
shocking sense of entitlement. The rhetoric is manipulative, intellectually dishonest, and fear-
mongers in a way that borders on unethical. We, the regular taxpayers, depend on you to stand
up to it.
The purpose of the preferential corporate tax rates for small business was to enable businesses
to save earnings in a tax-preferred way for expansion and ultimately, new job creation. It's not
working the way it should. Physicians, lawyers, realtors, and accountants are not NET new job
creators. They have generated no NET new jobs because of their tax breaks. Whether
incorporated or not, they have the same number of staff, pay fees for the same professional
services, pay the same rent etc. Those expenses are all deductible, whether incorporated or
not. The only difference is that they pay less tax than they did 20 years ago. A lot less.

Ive helped create two new businesses in the last decade. I'm 100% behind supporting small
businesses and giving them incentives to grow. But there are much more effective and cost-
efficient ways to do it, such as accelerated deductions for capital expenditures and targeted tax
credits for investment and job creation.

A general un-targeted tax break that mostly benefits a wealthy group that creates no net new
jobs is costly to other taxpayers and ineffective.

I realize that it is tempting to capitalize on physician influence for your own political gain. But
our representative democracy depends on you rising above political opportunism (and standing
firm against the powerful organized voices physicians, lawyers, and accountants) to develop
sound, efficient, and fair policies and laws.

On behalf of regular taxpayers, I'm asking you to study this issue carefully and to recommend
sound tax policy that benefits ALL Canadians. Absent a valid and justifiable economic/societal
reason, taxpayers earning the same income should pay the same amount of tax. This is a
fundamental principle of our tax system and always has been.

Please defend it.