New Century, New Payroll Taxes
Author:
Walter Robinson
1999/12/27
CTF Calculations Reveal Payroll Taxes $462 Higher In 2000 Compared To 1992
OTTAWA: Despite the Employment Insurance (EI) tax reductions announced in November, Canadians will once again pay higher payroll taxes in the new year due to the increase in Canada Pension Plan (CPP) taxes according to the Canadian Taxpayers Federation (CTF).
Once the combined effect of the EI decrease and the CPP increase is calculated, a Canadian worker earning $39,000 will actually pay $84.90 more in payroll taxes in 2000 than they did in 1999. The same worker will pay $462.30 more in payroll taxes in 2000 as compared to 1992.
Employers are also dinged for more payroll taxes. In 2000, employers will cough up an extra $61.50 for each employee at the $39,000 threshold. A full $393.66 more in 2000 as compared to 1992.
"Despite Paul Martin's welcome action on the EI front, the new century and the new millennium just means more of the same when it comes to the total payroll tax burden confronting workers and employers," said CTF federal director Walter Robinson. "Once CPP tax increases are factored in, Canadian workers fall further behind. This makes it all the more imperative that real tax relief is included in the Millennium budget this coming February."
CTF calculations, based on federal government figures, show employees earning $39,000 in 1992 paid $1,803.60 in payroll taxes 1992 (combined CPP and EI taxes). This pales in comparison to $2,265.90 forecast total payroll taxes for the year 2000. Meanwhile, employers will pay $2,640.30 in payroll taxes next year for each employee at $39,000 compared to $2,246.64 in 1992.
Robinson called on the federal government to further reduce EI taxes in 2000 to offset the effects of higher CPP taxes, and to enact the tax relief proposals in the CTF's pre-budget submission (December 1, 1999) to the House of Commons Finance Committee. The CTF called for an end to "bracket creep" by restoring full indexation of the tax system to inflation, elimination of the 5% federal surtaxes, and a 10% across-the-board income tax cut.