Your provincial income taxes just went up again and you probably didn’t even know it.

What’s that you say? You didn’t hear an announcement by Premier Greg Selinger that he was going to raise your income taxes?

That’s because there wasn’t one. Manitoba is one of three provinces in Canada that still uses one of the most secretive forms of tax increases out there – bracket creep. It allows governments to increase taxes without being seen to raise the rates.

In technical speak, it occurs when a government doesn’t adjust the tax system for inflation.

Put plainly, imagine back in 1950 that your grandmother handed you 25 cents and said “this is for your birthday, enjoy going to a movie on me.” Back in the day that would have been a nice gesture.

However, if she handed you 25 cents in 2011 and said the same thing, you would lose out as grandmother’s gift amount didn’t rise with inflation.

As Manitoba’s personal income tax system doesn’t account for inflation, you lose out in the same way.

You see, back in 1999 when the NDP took office, Manitoba’s basic personal exemption was $6,794. That represents the amount of money everyone in the province could earn without paying provincial income taxes on it.

Had the government automatically adjusted that benefit for inflation, it would be $8,497 for 2011. But remember, Manitoba is one of three provinces that don’t do the automatic adjustment. The government has only raised the benefit to $8,134 for 2011.

Thus, you’re going to pay the lowest tax rate (10.8 per cent) on the difference – for an extra $39 this year alone.

But don’t stop there. The tax brackets aren’t adjusted for inflation either.

When the NDP came to power, you paid the second tax and third tax rates when your income hit $29,590 and $59,180 respectively. Today, the second (12.75 per cent) and third (17.4 per cent) tax rates kick in at $31,000 and $67,000 respectively.

Had they kept pace with inflation, you wouldn’t pay those higher rates until your income hit $37,005 and $74,011 respectively.

That means everyone with incomes over $37,005 is paying an extra $156 each year. If you’re over the $74,011 mark, the government is charging you a whopping $482 more than they should each year.

Province-wide, the back door form of taxation allows the government to tax people over $66 million more than it should each year.

Imagine the good that could come from leaving over $66 million in taxpayers’ pockets each year. People could use the money to start up new businesses, to support existing businesses, to save for their retirement or to go on a much needed vacation.

The Canadian Taxpayers Federation was able to convince the feds to end the unfair tax practice back in 2000. Since that time almost every other province has followed suit.

We’ve got a petition going on the matter here in Manitoba and a new YouTube video blog out to educate taxpayers about the unfair tax practice. Perhaps if enough people join us in spreading the word, the 2011 budget could be the one to finally fix the problem.