April 19, 2024

Quebec taxpayers will profit from a spectacular provincial tax lower of round $3.9 billion in 2023, due to a 1 proportion level discount within the first two tax brackets and the tax system’s hefty indexation.

If you file your 2023 Quebec tax return, it is possible for you to to evaluate the “honest worth” of this tax break.

The tax lower provided by the federal government of François Legault, following his election promise within the final elections, is as follows. The marginal fee will increase from 15 to 14% for the first tier and rises to $49,275 and from 20 to 19% for the 2nd tier and rises from $49,275 to $98,540.

Along with this discount of 1% in every of the primary two tax brackets, there’s an indexation of the provincial tax system for 2023 of 6.44%.

A regressive measure

Once we speak about a “huge” tax lower, that’s true, however not for everybody.

For what? As a result of from a tax perspective, there’s nothing extra “regressive” than a tax lower and the indexation of tax tables.

As proof, I’ve the provincial tax discount that taxpayers will profit from in 2023 in comparison with 2022, relying on the totally different stage of a person’s taxable earnings. The quantity of reductions takes into consideration the essential private credit score and the indexation of the tax system of 6.44% in 2023. Additionally observe that my discount calculations are based mostly on the 2022 and 2023 private tax tables decided by the accounting agency Raymond Chabot Grant Thornton.


Proper from the beginning, you must know that there isn’t a tax discount beneath $17,000 of taxable earnings as a result of there was no tax to be paid in 2022. Listed here are the tax cuts by taxable earnings bracket:

  • $18,000 Earnings: -$165
  • $25,000 Earnings: -$235
  • $30,000 Earnings: -$285
  • $40,000 Earnings: -$385
  • $50,000 Earnings: -$633
  • $60,000 Earnings: -$733
  • $75,000 Earnings: -$883
  • $90,000 Earnings: -$1033
  • $100,000 Earnings: -$1357
  • $120,000 Earnings: -$1484

For taxable earnings of $120,000, the utmost tax discount in comparison with the 2022 tax yr is $1,484, no matter whether or not you earn $400,000 or $1 million or extra.

As you’ll have seen, the provincial tax lower hole clearly favors high-income folks. That is clearly “regular” as they pay a considerably larger tax burden than the much less rich.

So when the Legault authorities cuts taxes, it robotically favors taxpayers who pay extra.

For that reason, many teams really feel that slicing taxes is unfair. They would favor the federal government to make use of this cash for different functions, akin to offering extra assist to much less prosperous households, neighborhood teams, carers… or just investing extra in well being and training providers.