CFIB members save on Amex
Attract more customers with a lower rate
Halifax, December 31, 2015 – If you live in Prince Edward Island, Nova Scotia or, Manitoba the new year means that you just fell further behind your fellow Canadians in terms of how much personal income tax you pay. To celebrate 2016, the Canadian Federation of Independent Business (CFIB) has released a report that reveals how three provinces are hiking taxes without even telling their residents.
The phenomenon, called “bracket creep”, was long-ago addressed by the federal government and seven out of 10 provinces, simply by automatically increasing their tax brackets and the basic personal exemption – the amount individuals are allowed to earn before they start paying taxes – to inflation. In Manitoba, Nova Scotia and PEI, these adjustments don’t happen so the purchasing power of the “tax-free” amount is eroded and more income gets taxed at higher levels.
“This is a stealth tax,” said Nick Langley, director of provincial affairs for CFIB in Nova Scotia. “Indexing ensures that a person’s buying power from year to year isn’t eroded by paying more personal income tax- that’s why most governments do it automatically every year. In Nova Scotia, however, even if your income is just keeping up with inflation, you pay more taxes. Mysteriously, your money doesn’t go as far as it used to, and you can’t figure out why. But the government knows exactly why.”
The study quantifies the impact of bracket creep on Nova Scotians.
“The worst part of it is that bracket creep affects low income-earners more than most,” added Langley. “If you are earning minimum wage in Nova Scotia, the amount of personal income tax collected by the provincial government has increased by 275 per cent in the last 15 years. That is shameful.”
For more information, contact Nick Langley at (902) 401-2615 or [email protected]
CFIB is Canada’s largest association of small and medium-sized businesses with 109,000 members across every sector and region.