Nova Scotians to Ring in New Year with Another Bracket Creep Tax Hike
HALIFAX, NS: As Nova Scotians get ready to face their Christmas bills in January, what many don’t realize is that 2017 will also bring with it higher taxes. According to the Canadian Taxpayers Federation’s (CTF) “New Years Tax Changes” report, taxpayers will pay more as a result of “bracket creep” but will save some money thanks to lower EI premiums.
Bracket Creep – “Sneaky Tax Increase”
Nova Scotia is just one of just two provinces (Prince Edward Island is the other) that does not index their income tax brackets to inflation. That means when workers receive a small bump in their pay they get pushed into a higher tax bracket even though their purchasing power has not increased.
Over time the bracket creep adds up to a significant burden on the average worker. The CTF calculates that since 2012, bracket creep costs a taxpayer earning $60,000/year over $250 each and every year into the future in extra taxes.
The Nova Scotia government gets about $20 million more each year as a result.
“Almost every province in Canada has ended bracket creep, now it’s time for Nova Scotia to follow suit and end this annual tax grab,” said Kevin Lacey, Atlantic Director with the Canadian Taxpayers Federation (CTF).
The CTF is calling on the Nova Scotia Liberal government to keep the commitment it made while in opposition to end bracket creep.
“Premier McNeil called for an end to bracket creep when in opposition; now that he’s in power he should do something about it,” added Lacey.
Changes Coming to EI will save taxpayers a little bit in 2017
Starting in 2017, taxpayers will get relief from changes the federal government has made to EI premiums. Federal rates will decrease for taxpayers to $1.63 (from $1.88) per $100 of insurable earnings. The maximum insurable earnings for 2017 will increase to $51,300 (from $50,800).
This means those at the maximum employee contribution will see their rates fall $132 while employer contributions will fall $185.
“Changes to the EI rates will give a little relief for the tax increases that Nova Scotians face,” said Lacey.
CTF calculations for the tax changes that will be occurring on January 1st for 44 different income and family scenarios can be found HERE