Taxing people who earn higher incomes, at progressively higher rates, may unite the hands of comrades, but it could hold the B.C. economy back.

As a result of B.C.'s free trade agreement with Alberta, the Trade, Investment, and Labour Mobility Agreement (TILMA), Alberta can no longer require oil and gas companies operating in Alberta to establish head offices there. However, will the people working in those head offices want to leave a province with a single rate tax on income, not to mention more tax-free income to start with Many British Columbians believe everyone wants to live here, but the fact is, our government takes away more of our money as we do better. Punishing success might keep away the very people who could ramp the province up even further. Is it time for tax reform in B.C

Head offices are thought to be good for a city because they bring prestige and high paying jobs. They also bring indirect benefits; they create a demand for financial and business services. Jobs in financial and business services also tend to be high paying and relatively recession proof.

A study by Statistics Canada showed that between 1999 and 2005, Vancouver's head office count fluctuated but ultimately fell from 355 to 335. Head office employment fell steadily, from about 17,000 to 12,000. Calgary's head office count also fluctuated, but ultimately rose, from 279 to 316, and employment rose from about 12,000 to more than 19,000. B. C. now has an opportunity to regain some of those jobs.

For example, there are 160 oil and gas companies operating in B.C., but fewer than five have head offices in B.C. Any shift in head office location will mean more tax revenue from those employed at head offices and related companies that build up around them. But why would high income earners want to come to B.C

In B.C., people who work hard to make more money are punished by the tax system. This is called a progressive tax system; the more you earn, the greater the percentage of tax you pay. B.C.'s "high-income" marginal tax rate is among the highest in Canada at 14.7%. Alberta has a 10% across the board flat income tax. Not only that, in B.C., we start paying provincial income tax at $8,858, but in Alberta, they don't start paying until they achieve an income of $14,999. What this all means is if you make $150,000 in B.C., your total provincial tax bill will be $15,500. In Alberta, you'd currently pay $13,186.

B.C.'s economy is currently booming and unemployment is low. Much of the current boom comes from the construction sector, but that sector is very sensitive to economic downturns. Head office jobs, and the services head offices demand, are much less sensitive to the ups and downs of the economy. A lower, simpler and flatter income tax system would create tremendous incentives for economic growth and long-term stability in British Columbia.