- CTF Report Shows Governments Pocket $90 Billion from Bracket Creep -

OTTAWA: The Canadian Taxpayers Federation (CTF) today released the Y2K version of its comprehensive report entitled: ABC's of Bracket Creep. Over the past decade, Ottawa and the provinces netted an extra $90 billion in personal income taxes from bracket creep. This staggering amount of wealth, fleeced from the pockets of working Canadians, represents the largest tax grab in Canadian history - a hike that most Canadians were unaware of until recently.

Barring any major tax relief this year, the report notes that Canadians will pay an extra $10.7 billion to the federal government and another $2.6 billion to the provinces in automatic personal income tax hikes due to bracket creep. The total federal & provincial impact of bracket creep in 2000 on a Canadian making $40,000 a year is $1,345, up $21 from 1999.

"We've suffered under 14 years of bracket creep. While seven years were courtesy of the former Conservative government, the blame for the last seven years falls squarely on the shoulders of Jean Chretien and Paul Martin," said CTF federal director Walter Robinson. "The Liberals don't discriminate, they've been equal opportunity tax hikers."

"With $90 billion sucked out of the private sector over the past decade, the national economy has suffered immeasurably," added Victor Vrsnik, principal author of the report and CTF-Manitoba director. "It's tragic to speculate on the lost investment and job opportunities from government meddling in the income tax system. The bracket creep caper is tantamount to legalized theft."

Bracket creep is a federal tax policy that allows tax brackets, exemptions, and credits to lag behind inflation. It works by over-exposing inflation-driven incomes to an income tax system that is only partially indexed to inflation. The result is a steady increase in the amount of income taxes netted by Ottawa and the provinces.

"This automatic, hidden tax is still with us and all indications point to the federal government ignoring this situation in the next budget due to be tabled one fortnight from today," added Robinson. "During Paul Martin's tenure as Finance Minister, personal income taxes as a percent of GDP have increased from 7.1% to 8.1%, an increase of 14% over seven years."

"Over 20 national organizations representing a broad cross-section of taxpayer, business and labour interests have all called for an end to bracket creep. These groups speak for millions of Canadians and Paul Martin should be listening closely," concluded Robinson. "Ending bracket creep represents the intersection of good fiscal and great social policy. In two weeks we'll see if Mr. Martin has chosen to side with the people or listen to his spin-doctors."