Charlottetown, PE: The Canadian Taxpayers Federation is praising the King government for delivering on significant tax relief for Islanders over the next two years.
“In recent years, Islanders have been hammered by high inflation and soaring living costs,” said CTF Interim Atlantic Director Jay Goldberg. “It’s good to see the King government recognize those challenges and plan to leave more money in taxpayers’ wallets, where it belongs.”
The King government is immediately increasing the basic personal exemption from $12,000 last year to $12,750 for 2023 and up to $13,500 in 2024. In 2024, the government also plans on reducing income tax rates for all income earned below $140,000. It is creating a new fifth tax bracket for all income above $140,000. All tax brackets will also see a one-time threshold increase to help offset the impact of inflation.
“The government’s planned income tax relief is welcome news,” said Goldberg. “But Islanders are still waiting for the government to eliminate bracket creep. Income tax rates are not presently indexed at the rate of inflation and that will cost taxpayers up to $263 this year.”
Prince Edward Island is one of two provinces that fails to increase its income tax bracket thresholds with the rate of inflation. This pushes taxpayers into higher tax brackets even if they aren’t earning more in real terms.
The government also expects its deficit to increase this year. The deficit will rise from $66.2 million in 2022-23 to $97.6 million in 2023-24.
“The government’s increased deficit is bad news for taxpayers,” said Goldberg. “This means more money spent on interest payments and a larger burden for our children and grandchildren.”
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