Payroll Taxes Climb For 12th Consecutive Year
- CTF releases 12-year trend analysis of payroll tax hikes
- Average worker to pay $90 more in payroll taxes in 2003; 12 straight years of hikes
- Workers now paying $817 more than 1992 while employers fork out an extra $702
- EI fund surplus now exceeds $40 billion
OTTAWA: The Canadian Taxpayers Federation (CTF) today released a twelve-year analysis of payroll taxes paid by Canadian workers and employers along with calculations highlighting the extra payroll tax burden to be borne by workers and companies next year.
Happy New Year: Watch Your Paycheque Shrink
While Employment Insurance (EI) taxes are dropping by a dime, Canada Pension Plan (CPP) premiums will jump 25 cents for each $100 of earnings, stated CTF federal director Walter Robinson. Bottom line: Canadians will fork out an extra $90 in payroll taxes in 2003. This makes it twelve years in a row that their paycheques have taken a New Year's beating.
Payroll Taxes Paid by a $41,000 Employee (1993-2003)
Payroll taxes have skyrocketed 45% since 1992 outpacing inflation by a factor of two to one over this same period, added Robinson. Payroll taxes are profit insensitive job killers. They stifle productivity, retard real wage growth and slow economic growth.
Liberal Payroll Tax Hypocrisy
On October 17, 1994, former federal Finance Minister Martin told the Toronto Star, we believe there is nothing more ludicrous than a tax on hiring. But that's what high payroll taxes are. They have grown dramatically over time. They affect lower wage earners much more than those at the high end.
The feds continue to exhibit great hypocrisy on the issue of payroll taxes. They say one thing, but tax another, added Robinson. This hypocrisy has hit one in five Canadians - those who are self-employed - doubly hard as they pay both the employee and employer contributions for CPP and EI.
The EI Surplus
All the more discouraging is the fact the government continues to benefit from the EI cash cow as the EI fund surpluses are rolled into consolidated general revenues, said Robinson. By March 2003, the current $40 billion surplus in the EI account will probably grow to $45 billion or even higher.
* All figures taken from the Transactions in the Unemployment Insurance Account table in the Public Accounts. Simple addition of annual difference surpluses will not yield the true value of the EI fund surplus due to other charges, payments and restatements that have occurred. The total surplus in the EI account for as of March 31, 2002 was $39.363 billion.
Manley's Challenge: Fix EI
Payroll taxes hurt Canadian workers and damage our economy. They specifically and punitively punish middle-income and lower-income workers. If Minister Manley wants to emerge from the long shadow of his predecessor then a great place to start would be real EI reform instead of this dinky, annual nickel and dime stuff, noted Robinson.
As for Mr. Chretien's legacy, the record of his entire mandate is one of punishing workers and employers by pilfering their paycheques. It's certainly nothing of which he can be justifiably proud, concluded Robinson.