As promised, the government of François Legault lowers taxes for 4.6 million Quebecers. Here’s how much more money you’ll have in your pocket.
1% decreases
In his budget, the Minister of Finance, Eric Girard, announced a drop of one percentage point in the first two tax rates.
First level – income bracket up to $49,275: the tax rate increases from 15% to 14%.
Second level – income bracket ranging from $49,275 to $98,540: the tax rate increases to 19% instead of 20%.
How much does that represent, concretely?
Quebecers whose annual income is $20,000 will see a drop of $8 at the end of the year.
On the other hand, for people who earn $100,000 or more annually, this tax cut represents savings of $814.
Citizens who earn $30,000 a year will benefit from a reduction of $108 in their tax burden.
Quebecers who earn $50,000 annually will have a reduction of $328.
Here’s what the tax cuts will look like:
- $20,000 — $8
- $30,000 — $108
- $40,000 — $240
- $50,000 — $328
- $60,000 — $428
- $80,000 — $628
- $100,000 and more – $814
An effective reduction from when?
This drop of one percentage point in the first two tax rates is retroactive to the 1er January. But it will not be felt concretely in the portfolio of employees until July, the date on which source deductions (on your paychecks) will be adjusted.
Self-employed workers will be able to apply it now.
How much does this measure cost the government?
This measure will cost the Quebec government $1.7 billion per year.
As explained by the Parliamentary Office of Quebecor, the tax reduction is financed from the reimbursement of the debt. Indeed, payments to the Generations Fund, this kitty dedicated to reducing the weight of the debt, will drastically decrease by 40% this year.
A tax cut that is not unanimous
The CAQ’s tax cut will benefit more Quebecers earning incomes of nearly $100,000 than those who earn below-average wages and who suffer the most from the repercussions of inflation, reveals a study by the Institute for Socioeconomic Research and Information (IRIS).
“The functioning of the tax ensures that wealthier households benefit as much if not more from the reduction in the tax rate that applies to the lower levels since these levels include a greater part of their income”, reads- we in the analysis.
According to the researchers, approximately 35% of Quebecers will also not be able to benefit from this tax cut because they earn income below the $20,000 threshold allowing them to benefit from it.
− With Geneviève Lajoie and Andrea Lubeck