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The tax reduction for the majority of households is almost entirely a result of the elimination of MSP premiums. MSP was a particularly unfair tax because whether you make $45,000 or $450,000, you paid the same flat dollar amount ($900 per year per adult back in 2017), although those with very low incomes got assistance. Under this system, the rich paid a much smaller share of their income in MSP than modest- and middle-income earners.

The top one per cent of households will also benefit from not having to pay MSP premiums anymore. But they pay more under the new income tax bracket of 16.8 per cent on income over $153,900.

This is good news for tax fairness in B.C. In contrast, tax cuts made by the previous government between 2000 and 2016 benefited the top one per cent far more than middle- and modest-income households, while MSP premiums more than doubled.

Eliminating an unfair tax like MSP is important, but it costs $2.7 billion in lost provincial revenue annually. It’s important to replace that revenue because there is a huge backlog of social and environmental investments needed in this province.

To address the loss of revenue from MSP, the government introduced the Employer Health Tax (EHT), which is charged as a share of payroll for large and medium-sized employers. This is a positive move in terms of tax fairness — but the EHT covers only $1.9 billion of the $2.7 billion in MSP revenue we’re losing annually.

While the Employer Health Tax doesn’t fully replace MSP, provincial revenues have been shored up in other ways, including corporate income tax increases, the new top income tax bracket as well as important tax measures targeting high-end and vacant real estate.