Hey there, time traveller!
This article was published 27/12/2012 (1517 days ago), so information in it may no longer be current.
A tax watchdog says the province's continued failure to index personal income taxes for inflation will cost Manitobans millions of dollars in 2013.
Manitoba is one of only three provinces -- Prince Edward Island and Nova Scotia are the others -- that allow for the phenomenon known as "bracket creep."
That's where the province takes more of your money by failing to adjust tax brackets for inflationary wage increases.
"The sad reality is Manitoba is still facing this secret form of taxation," said Colin Craig, a Prairie spokesman for the Canadian Taxpayers Federation. "It's no secret that the average Joe has no idea it's going on."
Craig said Manitobans will still pay the province's highest rate of income tax (17.4 per cent) when their incomes reach $67,000 in 2013. That hasn't changed since 2009. In Saskatchewan, the highest provincial tax rate (15 per cent) won't kick in next year until incomes reach $122,589.
The basic personal exemption for 2013 in Manitoba is $8,884. In Saskatchewan, it's $15,241.
"The difference between Manitoba and Saskatchewan now is pretty stark," Craig said.
According to the taxpayers federation, bracket creep will cost Manitobans earning $45,000 an extra $11 in 2013. Those earning $80,000 a year will pay an extra $71. In a single year, the totals are tiny, but they add up over time. According to the taxpayers federation, the cumulative effect in the past decade for someone earning $45,000 is $160 a year in extra income tax. For someone earning $75,000, it's an additional $550 annually.
The Selinger government noted Thursday that basic tax exemptions will rise by $250 for Manitobans in 2013. The increase applies to the basic personal amount as well as the spousal amount for married and common-law couples and the eligible-dependant amount for single parents.
"With these increases, another 5,500 Manitobans will be removed from the tax rolls and the savings will total $19.1 million," cabinet press secretary Sally Housser said in an email.
Meanwhile, higher Canada Pension Plan and employment insurance rates will eat into paycheques across Canada, beginning Jan. 1.
Canadian workers earning $45,000 a year will pay an extra $84 in CPP and EI contributions, according to the taxpayers federation. Those earning at least $47,400 will contribute $891.12 in EI premiums in 2013, up $51.50. Employers will pay $1,247.57, an increase of $71.61.
Comparing tax bills
Comparable tax bill on taxable income of $50,000*
British Columbia $8,685
Prince Edward Island$11,252
-- source: Ernst & Young
*Combined federal and provincial income taxes for each jurisdiction, based on rates as of June 30, 2012.