Take-home pay to get lighter in 2012

[oneh2obabe]

Julian Beltrame
The Canadian Press

OTTAWA - Even without major tax hikes, Canadians' take-home pay will get a little lighter starting Jan. 1.

The Canadian Taxpayers Federation says premium hikes for employment insurance and the Canada Pension Plan will collect an additional $306 per employee from workers and their employers in 2012.

Workers are seeing their EI premiums rise by five cents per $100 of insurable earnings to $1.83 on Jan. 1, while the maximum insurable pay increases to $45,900 from $44,200. In addition, the maximum pensionable earnings rise to $50,100 from $48,300.

That will take about $142 from employee paycheques who qualify for the maximum over the year. The hit on employers is slightly more, $164.

While governments did not directly raise taxes on incomes this year, the taxpayer association says Canadians will nevertheless have less money available to them for saving, investing or spending. He adds that payroll taxes make it more expensive for firms to hire.

"Across Canada there are governments that claim they are concerned about jobs and the economy, but at the same time they are taking hundreds of dollars of disposable income out of the pockets of Canadian families," said CTF federal director Gregory Thomas.

"Between the employer and employee, you have $6,630 of payroll taxes. That's the price of hiring a Canadian."

A spokesman for federal Finance Minister Jim Flaherty said the government has ushered in significant tax relief since 2006 and that the tax burden of Canadians is now the lowest in 50 years.

"There will (also) be absolutely no increase to the CPP contribution rate," added Chisholm Pothier, Flaherty's director of communications. "What is being adjusted is the maximum CPP contribution room only, something that happens every year to account for inflation."

He noted that the maximum CPP benefit increases by $320 to $11,840 in 2012.

The year's biggest tax change is not on the personal side, but in the 1.5 percentage point cut to the federal corporate rate to 15 per cent. In addition, some provinces are also dropping the provincial rate on corporations to 10 per cent.

The corporate tax reduction is the last phase of Ottawa's plan to bring Canada's combined rate to 25 per cent, from 43 per cent in 2000.

The reduction — as well as an identical cut in 2011 — was opposed by the opposition parties in the spring election campaign. They argued that given the weak economy, the estimated $6 billion in lost revenue could be better put to use to support jobs and economic growth. This year's decrease is estimated to be worth $2.85 billion.

The Conservatives responded that making Canada a low tax jurisdiction would benefit the economy in the long run. Flaherty has often cited the Forbes magazine designation of "best country for business" as evidence that his low tax policy is working.

"Canada now has an overall tax rate on new business investment that is substantially lower than you will find in any other G7 country and below the average of the member countries of the OECD (Organization for Economic Co-Operation and Development," he said in Calgary last month while delivering the government's fall economic update.

Ottawa did give a break of sort to workers this year. In November, Flaherty halved the EI increase to five cents, rather than the previously scheduled 10 cents per $100 of insurable earnings, depriving the federal treasury of about $600 million in revenues.

Not all Canadians will experience the same tax bite this year, the taxpayers federation said. Some provinces are taking an additional cut.

For instance, residents of Manitoba, Nova Scotia and Prince Edward Island will pay more taxes if they simply keep up with inflation since those provinces don't index their tax brackets.

British Columbia residents will see their health tax rise by 6.4 per cent for couples, and 5.8 per cent for individuals.

And Quebec residents, already among the highest taxed in the country, will see their Quebec Pension Plan rates rise by 5.6 per cent to $2,342 on maximum eligible earnings. Quebec's EI rate is also increasing by 8.3 per cent to $675 at the top level, effective Jan. 1.

[Ken7]

That's perfect, I wasn't sure what to do with it all. Not suprising one bit, we just keep getting taxed to death!

[Bagotricks]

I'm going to re-name myself to be a corporation instead of a human because obviously the roll of the peasant Canadian human is to work hard for low pay to the end result of benefit for the corporations.

My taxes would have gone down 18% since 2000, meanwhile a peasant humans bread and milk price went up 5.6% this year alone.

Suckers.

[French Castanut]

I'm going to re-name myself to be a corporation instead of a human because obviously the roll of the peasant Canadian human is to work hard for low pay to the end result of benefit for the corporations.

My taxes would have gone down 18% since 2000, meanwhile a peasant humans bread and milk price went up 5.6% this year alone.

Suckers.

x2

[Captain Awesome]

Meh.

Who needs money. It doesn't buy happiness!

[xjeepguy]

Meh.

Who needs money. It doesn't buy happiness!

Hmmm , money bought me a new boat and motor last year and that made me very happy. So... there seems to be a flaw in your theory.

[JOF585]

Meh.

Who needs money. It doesn't buy happiness!

Hmmm , money bought me a new boat and motor last year and that made me very happy. So... there seems to be a flaw in your theory.

But if you didn't have that boat, would you still be happy ?

[xjeepguy]

Meh.

Who needs money. It doesn't buy happiness!

Hmmm , money bought me a new boat and motor last year and that made me very happy. So... there seems to be a flaw in your theory.

But if you didn't have that boat, would you still be happy ?

Yes , I have 2 boats . :discodance:

[Captain Awesome]

Yes , I have 2 boats . :discodance:

You're the 1% of rich guys Occupy Wall St. movement talks about!

#OccupyXjeepGuyBoats

[xjeepguy]

Yes , I have 2 boats . :discodance:

You're the 1% of rich guys Occupy Wall St. movement talks about!

#OccupyXjeepGuyBoats

Well they aren't yachts . I do lake fishing , not sailing trips to the Caribbean :D


Enough drifting OT , sorry OP .