Taxpayers have something worse than a hang over to face after their New Year’s Eve celebrations – a huge tax bill. The Canadian Taxpayers Federation (CTF) has crunched the numbers in its annual New Years Tax Changes report, and most New Brunswickers will be paying more.
A New Brunswick taxpayer earning $45,000 will pay $145 more than last year and someone earning $60,000 will pay about $400 more than they did in 2013.
“Taxes will take an even bigger bite out of working families’ pay cheques, even though their take home pay is barely keeping up with the increased costs of gasoline and necessities,” said CTF Atlantic Director Kevin Lacey.
There are two reasons for the increase in taxes this year.
New Tax Increases
In 2014, New Brunswick workers will feel the full brunt of tax increases announced in the 2013 budget this.
These tax increases that came into effect on July 1st, have failed to deliver promised relief of the province's fiscal woes.
The province is further in debt, provincial revenues are lower than expected, and unemployment rate remans stobbornly high.
"The experiment of pushing the government's spending problems on the back of working taxpayers compounded New Brunswick's fiscal woes," added Lacey.
EI/CPP Tax Increases
The CTF has calculated that maximum employee EI taxes will go up $23 in 2014 to $914, while the employer’s share of EI payroll tax goes up $31 to $1,279. That means a working couple who each earn at least $48,600 in 2014, will see $4,386 in [S1] EI payroll taxes sent to Ottawa on their behalf.
The federal government expects to collect $4.2 billion more in EI taxes in 2014 than they pay out in benefits. Other forecasts peg the EI tax windfall to the government as even higher.
“People have compared the government’s EI game to a casino where the house takes a huge cut of the money,” said CTF Federal Director Gregory Thomas. “It’s completely unfair to compare EI to a casino, because you an occasionally win when you give your money to a casino.”
Thomas noted that for every dollar paid out in EI benefits, the government spends 11 cents on administration.
The maximum employee Canada Pension Plan payroll tax rises $70 to $2,426, for employees earning at least $52,500 a year. Employers match employees’ CPP payroll taxes dollar for dollar, pushing the total CPP payroll tax haul to $4,856.
New Brunswick Taxes vs. Rest of Canada
CTF points out that tax increases have made New Brunswick even less competitive compared to the rest of Canada.
A New Brunswicker earning $60,000 living in Fort McMurray pays $1,700 less income tax than someone earning the same salary in Saint John.
“People are voting with their feet. They’re leaving high tax New Brunswick for lower tax Alberta,” added Lacey. “How can we build a strong, local economy in New Brunswick if we can’t hold on to our workers?”
Power Rate increases 2014
New Brunswickers will also pay a little more for power in 2014. A 2010 freeze on power rate increases has been lifted. NB Power increased rates by 2 per cent on October 1, 2013; another 2 per cent increase will take effect October 1, 2014.
You can view the CTF’s calculations for 26 different family and income scenarios here:http://www.taxpayer.com/media/
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