Secret tax on low income earners, says taxpayers group

The Canadian Taxpayers Federation says P.E.I. Finance Minister Wes Sheridan is imposing a secret tax on Islanders, simply by not indexing tax brackets to inflation.

Taxpayers federation says low income earners lose out because tax brackets not indexed to inflation

The Canadian Taxpayers Federation has crunched the numbers, and they say Islanders who earn $25,000 or less are paying $17 per year more because of 'bracket creep'.

The Canadian Taxpayers Federation says P.E.I. Finance Minister Wes Sheridan is imposing a secret tax on Islanders, simply by not indexing tax brackets to inflation.    

They call it "bracket creep".

Income tax exemption amounts for Atlantic Canada
200820092010201120122013
PEI$7,708$7,708$7,708$7,708$7,708$7,708
NS$7,731$7,981$8,231$8,231$8,481$8,481
NB$8,395$8,605$8,777$8,953$9,203$9,388
NFLD$7,566$7,778$7,833$7,989$8,237$8,451

P.E.I. is one of only three provinces, in addition to Nova Scotia and Manitoba, that do not index tax brackets to inflation.   

The province has not raised Islanders' basic income tax exemption of $7,708, since 2007.

The federation says Islanders who earn $25,000 or less are paying $17 per year more because of bracket creep.

Someone earning $60,000 a year pays an extra $46 annually.

Scott Hennig, with the Canadian Taxpayers Federation, says the decision not to raise personal income tax exemptions hurts people who make the least amount of money.

“Not indexing, not moving your tax brackets up by the inflation every year, really is a tax increase. And it's an increase often on the lowest-income people in your province. Not doing it is raising taxes, doing it is not a tax cut, contrary to what the minister is claiming,” he said.

The issue came up in the P.E.I. legislature this past week.

Sheridan says he does not believe in indexing.

He says if and when he balances the budget, he will target savings for single parents, seniors and people on low incomes.

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.