The new Parti Québécois government is adding insult to injury by making its two new, steeper income-tax brackets retroactive to New Year’s Day.
Last Thursday, Premier Pauline Marois said, “The business community has no need to worry.” But the ability of many members of that community (in their personal capacities) to plan for their financial affairs is already being interfered with.
The PQ cabinet does not appear to understand that Quebec has to compete for population and wealth formation within Canada and indeed North America as a whole. It is as if the Péquistes think that most comfortably-off Quebeckers are somehow trapped inside Quebec, as a result of the French language.
Consider the disincentives. At present, the highest tax bracket for Quebec’s income tax starts just above $80,200. with a rate of 24 per cent. Four per cent of Quebeckers, those with incomes of more than 100,000, pay 33 per cent of Quebec’s tax. Similarly, 1.5 per cent of them, with incomes above $150,000, pay 21 per cent.
With brand new brackets coming for those above $130,000 and $250,000, these ratios will become even heavier – even before the heavier capital-gains tax and dividend tax that is promised, or threatened, too.
Anecdotal evidence from real-estate agents already reports a fall in condominium purchases in Montreal.
Nicolas Marceau, the Minister of Finance, has expressed a willingness to compromise, as befits a member of a minority government, but is determined to get rid of the $200 health tax – which is certainly regressive, but at least it directly communicates some sense of the pressure of health-care costs.
Meanwhile, Ms. Marois and her colleagues show no sign of changing their minds on unreasonably low tuition fees for university and college students – on which they were positively demagogic before the election – and minimal fees for daycare.
As for retroactivity, the Constitution of the United States forbids the passage of ex post facto laws. Unfortunately for Quebeckers, the Canadian Charter prohibits only criminal laws that are retroactive – and though heavy taxation may sometimes feel like a crime, it isn’t.Report Typo/Error
Follow us on Twitter: