B.C.’s premier @dave_eby is on a roll for one of the dumbest election platforms in Canadian history. Certainly from a tax perspective, that is. Today he announced that, if re-elected, his government will create a new income tax bracket for British Columbians earning more than $1 million. The rate? Apparently we have to wait for that. But his rationale sounds awfully familiar. “We are glad when people are successful, it’s fantastic,” Eby said. “We cheer for them…and it’s also right to ask people, who earn a little bit more to pitch-in in a moment like this.” Where have we heard that before? In 2015, Justin Trudeau campaigned on asking the wealthiest Canadians to pay “a little more.” His government subsequently increased the top federal personal tax rate from 29% to 33%. The Liberal platform estimated the new bracket would raise about $3.4 billion in 2016-17. Then something entirely predictable happened. People responded to incentives. High-income Canadians shifted income. Taxable income moved. Behaviour changed. The federal government itself subsequently acknowledged significant tax planning by high-income individuals around the introduction of the new rate. And, longer term, successful Canadians started leaving Canada. The Parliamentary Budget Officer has since emphasized an obvious but too-often-ignored point: at sufficiently high marginal rates, behavioural responses can significantly erode the revenue governments expect to collect. Think Laffer Curve - a basic economic concept. Which brings us back to British Columbia. B.C.’s current combined federal-provincial top marginal personal tax rate is already 53.5%. That means government already takes more than half of every additional dollar of ordinary income earned at the top rate. And now Premier Eby wants to push it higher. Unfortunately, his promise will appeal to the financially illiterate “tax the rich” crowd - a good chunk of his voting base - but B.C. needs to be careful here. Depending on the rate he announces, B.C. could end up with the highest marginal personal income tax rate in Canada. Why would that be good public policy? Highly mobile entrepreneurs, professionals, investors and business owners have choices about where they live, invest and build businesses. So do people considering moving to or investing in British Columbia. Tax rates are not the only factor in those decisions. Of course not. But pretending they don’t matter is equally foolish. At some point, continually telling successful people to “pitch in a little bit more” stops being a serious revenue strategy and starts becoming a flashing sign telling them that their success is more welcome somewhere else. B.C. needs investment. It needs entrepreneurs. It needs successful businesses and successful people creating jobs, taking risks and contributing to the tax base. B.C. should be trying to attract more of them - not testing how much more tax they are willing to tolerate before they change their behaviour. I’ll be very interested to see what rate Mr. Eby announces. But the direction of travel is already clear. And it’s the wrong one. B.C. residents, for the sake of Canada, please vote this fiscally inept leader and party out of office. Another Eby government could lead to economic disaster. globalnews.ca/news/12087360/…