As the spiked eggnog becomes a distant memory in the rear-view mirror, it’s time for the King government to outline a pro-taxpayer agenda that can help cure your high-tax hangover.
Taxpayers were hammered last year with the highest inflation rates in decades and soaring living costs. The best way for the government to ring in the new year is to leave more money in taxpayers’ wallets, where it belongs.
Thanks to inflation, which damaged taxpayer purchasing power, most Islanders were forced to make do in 2022 with the equivalent of 11 months of the wages they earned in 2021.
A huge part of the inflation squeeze has been government. Governments have profited off of inflation as taxpayers felt the pinch.
Last year alone, the King government brought in $77 million more than it expected in sales tax revenue due to inflation. Sales tax is charged as a percentage of the final sale price of a good or service. When prices go up, so too does sales tax revenue.
To put that into perspective, with that much money, the King government could lower in the HST by two percentage points and leave $69 million more in taxpayers’ wallets. Government revenue would still be up by nearly $8 million, but Islanders would have more money to spend on gas, groceries and other essentials.
To pay for even more sales tax relief, King could eliminate corporate welfare handouts, which cost the province over $42.6 million in 2022.
Another key plank in the 2023 taxpayer agenda is eliminating bracket creep. Bracket creep occurs when governments don’t move tax brackets with inflation. That means inflation automatically pushes taxpayers into higher tax brackets even though they can’t actually afford to buy more.
The government of Prince Edward Island has been profiting off of bracket creep for years. A typical Prince Edward Island taxpayer earning $60,000 will pay an extra $139 because of bracket creep. Every province other than Prince Edward Island and Nova Scotia has ended this unfair tax practice and it’s time for Prince Edward Island to catch up.
Taxpayers also need to see action from the King government at the gas pumps. In Newfoundland and Labrador, Premier Andrew Furey cut the gas tax by seven cents per litre last June until at least March 31, 2023. The average Newfoundland and Labrador family will have saved up to $500 at the gas pumps. While King has done well in offering inflation relief payments to most taxpayers, more action is needed, as Islanders will be hammered by a carbon tax hike from Prime Minister Justin Trudeau in a few months.
Finally, King needs to work on balancing the books. Last year, the government ran a surplus of $83.8 million, a major turnaround from the $26.5 million deficit King predicted the province would run just months earlier. Unfortunately, the government has given every indication that it plans to return to the red this year.
To help balance the books and improve the sustainability of the province’s finances over the long term, King should work to bring the salaries of government employees in line with their counterparts in the private sector. Doing so would save the province roughly $71 million a year, which could be reallocated to pressing taxpayer priorities like sales or income tax relief, health or education.
By cutting the sales tax, ending bracket creep, offering relief at the pumps and bringing government employee wages in line with the private sector, King can ensure that 2023 is a much friendlier year for taxpayers than the year that just finally came to a close.
As you may know, we're working hard to stop Prime Minister Trudeau's attempt to add a 2nd carbon tax upon Canadian taxpayers. If you are against this tax, would you take a moment today to read and consider signing the petition below?
When you do, your name will be added to the growing list of tens of thousands across our country who want to tell the government that we are opposed to these new taxes. Please take a moment to read the petition below and consider signing it today.
To Prime Minister Justin Trudeau:
The federal government is introducing new fuel standard regulations to require industry to reduce the carbon content of fossil fuels. If industry can’t meet the standard, they’ll have to pay Trudeau's second carbon tax. This tax will ultimately hit already struggling families and businesses.
It’s bad enough that taxpayers are already paying for one carbon tax. Canadians certainly can’t afford a second carbon tax.
We, the undersigned, call on Prime Minister Justin Trudeau to scrap plans for a second carbon tax.