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Time to Eliminate Secret Tax (Bracket Creep)

 

  • Inaction since 1999 costs Manitoba taxpayers over $66 million annually
  • Manitoba now one of three provinces with unfair tax rule
 
Winnipeg:  The Canadian Taxpayers Federation (CTF) today announced its number one recommendation for the province’s upcoming budget – end the secret tax (bracket creep) by indexing provincial tax brackets and credits for inflation.
 
Considered a ‘secretive’ form of taxation, bracket creep occurs when tax thresholds aren’t adjusted for inflation and thus citizens’ incomes are secretly clawed away by the government.  For example, if the government allowed individuals to earn $100 before they paid taxes in 1930, that benefit would be minimal in 2009, unless the $100 amount increased each year with inflation.
 
 A government document obtained by the CTF confirms that tax thresholds have not kept pace with inflation.  Since 1999, total inflation has been 23% in Manitoba .  However, the basic personal exemption, lower tax bracket and upper tax bracket have only increased by 20%, 4.8% and 13.2% respectively.
 
 “This problem started long before the Doer government took office,” said CTF Manitoba director Colin Craig.  “However, unlike most other provinces, the provincial government has yet to address this secretive form of taxation. Addressing bracket creep is our number one recommendation for 2009.”
 
The CTF calculates that since 1999 bracket creep has cost Manitoba taxpayers over $66-million per year.  Below is a breakdown of what bracket creep means to Manitoba taxpayers.  
 
 
 * 2009 - estimate of personal income taxes due
** 2009 Adjusted - estimate of personal income tax bills, had tax brackets kept up with inflation
 
"The government has certainly delivered other forms of tax relief since taking office" added Craig.  "However, in terms of income taxes, taxpayers need a legislative change to protect their incomes in the years ahead."
 
 
To view the government's briefing note on this matter, click here for the PDF.

By: Colin Craig
Posted: February 24, 2009
Topic: Manitoba

Contact the regional director Colin Craig for further information.
Type: News Releases

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