As promised, the government of François Legault cuts taxes for 4.6 million Quebecers. Here’s how much more money you’ll have in your pocket.
1% drops
Treasury Secretary Eric Girard announced in his budget a one percentage point cut in the first two tax rates.
Tier One – Income bracket up to $49,275: The tax rate increases from 15% to 14%.
Second Tier – Income bracket from $49,275 to $98,540: The tax rate increases to 19% instead of 20%.
How much does that mean specifically?
Quebecers, whose annual income is $20,000, will see a decrease of $8 at the end of the year.
On the other hand, for people earning $100,000 or more annually, this tax cut represents a saving of $814.
Citizens earning $30,000 per year will benefit from a $108 reduction in their tax burden.
Quebecers earning $50,000 annually receive a $328 rebate.
Here’s what the tax cuts look like:
- $20,000 – $8
- $30,000 – $108
- $40,000 – $240
- $50,000 – $328
- $60,000 – $428
- $80,000 – $628
- $100,000 and up – $814
An effective reduction from when?
This reduction in the first two tax rates by one percentage point applies retrospectively to January 1st. But it won’t really be felt in employees’ portfolios until July, the date when withholdings (on your paychecks) will be adjusted.
The self-employed can now use it.
How much does this measure cost the state?
This measure will cost the Quebec government $1.7 billion a year.
According to Quebecor’s parliamentary office, the tax cut will be funded from debt repayments. In fact, payments to the Generations Fund, that fund designed to reduce the weight of debt, will fall drastically by 40% this year.
A tax cut that is not unanimous
According to a study by the Institute for Socio-Economic Research and Information (IRIS), the CAQ’s tax cut will benefit more Quebecers with incomes approaching $100,000 than those on below-average incomes who are suffering the most from the effects of inflation.
“The way the tax works ensures that wealthier households benefit as much, if not more, from the reduction in the tax rate applied to the lower tiers, as those tiers comprise a larger portion of their income,” the analysis reads.
According to the researchers, about 35% of Quebecers will not benefit from this tax cut either, since their income is below the $20,000 threshold that allows them to benefit from it.
− With Geneviève Lajoie and Andrea Lübeck