The less well-off are disadvantaged by the tax cut promised by the Legault government, deplores a report by the Institute for Socio-economic Research and Information (IRIS), which recommends instead to allocate this money in public services.
The promised cut would represent a tax saving of $814 for taxpayers earning annual incomes over $100,000, the left-leaning think tank points out. The saving is $378 for a taxpayer making $55,000 a year.
Nearly 35% of the Quebec population will not earn enough income to take advantage of the tax relief. “It would be an unfair tax cut, because it would mainly favor taxpayers with higher incomes,” laments researcher Guillaume Hébert in an interview.
The Legault government has promised to reduce the tax rate of the first two levels by one percentage point. The tax measure of nearly $2 billion will be financed by reducing payments to the Generations Fund.
Mr. Hébert agrees with the idea of reviewing payments to the Generations Fund, which he compares to “a straitjacket” that “hides” budget surpluses in order to limit government spending.
Allocate money to public services
The money allocated to tax cuts should instead be used to finance public services such as education and health, according to IRIS. Its researcher cites the example of the lack of personnel in health establishments, the needs in the home services sector for the elderly or the lack of space in a childcare center (CPE). “Public services are already in bad shape. »
In a context of labor scarcity, the researcher does not think that these additional expenses would represent a shot in the arm.
“The scarcity of labor is often a scarcity at the price that employers would like to pay. »
“When we value the jobs enough, when we have workplaces that are attractive, that don’t burn out a completely exaggerated percentage of the staff, we are able to have people and retain [les employés du secteur public] “, he adds.
CAQ promise criticized
The promised tax cut is not unanimous and its detractors have made several public statements in the run-up to the next provincial budget, which should confirm its adoption on March 21.
For sometimes different reasons, economists, civil society groups and unions have asked the Minister of Finance, Eric Girard, to abandon the election promise of the Coalition avenir Québec (CAQ). Some plead in favor of additional investment in public services, others would like us to maintain payments to the Generations Fund to continue reducing the public debt.
Tax relief also has its advocates. The Canadian Federation of Independent Business (CFIB) made a public outing to encourage the government to keep its election promise. “We talk about intergenerational equity, but ensuring a more advantageous tax burden for young people is also intergenerational equity,” said in an interview its vice-president for Quebec, François Vincent. That we remain the most taxed is not necessarily the best thing. »
More taxed than in Ontario?
Minister Girard had defended the planned tax cut, pointing out that the Quebec middle class was taxed more than in Ontario. “It’s not someone who earns $300,000 who pays more taxes than in Ontario, all things considered. It is at $70,000 of income that you pay 36% more tax in Quebec than in Ontario,” he said during a conference before the Board of Trade of Metropolitan Montreal in December.
The comparison with the tax of the other provinces does not give an overall portrait, judge Mr. Hébert. “We have to be careful before saying that Quebecers are the most taxed in North America. »
The situation of each household will have an impact on its effective tax rate when taking into account transfers to families, for example.
“You have to look at different types of households to see how their tax rate evolves. We also have to look at the benefits people receive, especially families. »
“We see that for a single mother or a family with average incomes with two children, the tax rate drops dramatically and places Quebec among the places where it is the most advantageous, where the tax is the lowest. notes researcher Guillaume Hébert.