PQ set to impose retroactive tax on high-income earners
Published Monday, September 24, 2012 9:37PM EDT
The Parti Quebecois is planning to impose a retroactive tax on high-income Quebecers.
The party official made the announcement over the weekend that will affect two different groups: those earning more than $130,000 a year and those earning more than $250,000.
The tax hike will also apply to businesses.
The retroactive payment is designed to make up for an $845-million shortfall after the PQ cancelled the $200 health tax imposed by the former Liberal government.
Premier Pauline Marois said she would rather protect the interests of five million Quebecers than those of the wealthy minority.
While the numbers are not yet firm, Norma Kozhaya of the Conseil du Patronat du Quebec said she expects those who make a yearly income of $130,000 or more to see their provincial taxes increase by four percentage points, to 28 per cent, up from 24 per cent.
Those who earn $250,000 per year could see a higher increase – in the range of seven percentage points.
The increase will affect some 150,000 tax payers who make $130,000 or more. Earners in that income bracket currently pay 26 per cent of the total tax income; they will soon pay over 28 per cent.
The increase is expected to take place this fall and will be retroactive.
The minority PQ government has come under criticism by both the Liberals and the Coalition Avenir Quebec parties for the plan, and said it understands the retroactive tax hike could evoke a non-confidence motion.
Both major opposition parties said it will not accept a retroactive tax hike, and Kozhaya said it could negatively affect the economy.
“Lots of professionals -- doctors, nurses, engineers -- might be in this tax bracket. So I think for people from outside -- qualified workers who think of coming to Montreal -- there's a question to be asked, ‘Is it worth it?’” she said. “Also for people working in Montreal, asking the same question, ‘Should I stay here or am I better off leaving for Ontario’ for instance?”
Kozhaya added that the PQ has always tried to promote prosperity and encourage people to make more money, but this tax hike will do the opposite.
She said high-income earners won’t see any value in earning more when they will be paying 55 per cent in provincial and federal taxes combined.
Kozhaya said she expects many Quebecers may seek out tax shelters and various other methods to escape the taxman.