Submitted by CTF
On Jan. 1, Saskatchewan will again index its tax brackets to inflation to stop taxpayers from unfairly paying higher income taxes.
“There are lots of good reasons to kiss 2020 good bye and saying good riddance to the bracket creep income tax hike is one of them,” said Todd MacKay, Prairie Director of the Canadian Taxpayers Federation. “Taxpayers have been demanding an end to this sneaky tax grab for years so it’s great to see Finance Minister Donna Harpauer giving bracket creep the boot.”
Bracket creep happens when governments don’t move their tax brackets with inflation. When that happens, taxpayers who get cost-of-living raises get bumped into higher tax brackets, even though what they can afford to buy hasn’t increased. Bracket creep also allows inflation to erode the tax free portion of our income.
The Saskatchewan government “temporarily” stopped indexing its tax brackets in the 2017-18 budget. Prior to that, the province estimated that indexation saved taxpayers about $9 million per year.
British Columbia, Manitoba, Ontario, Quebec, New Brunswick, Newfoundland and Labrador and the federal government all provide at least some form of indexation. The Alberta government indexed its tax brackets for years, but stopped in 2020.
“Saskatchewan families are struggling through this downturn and ending the sneaky practice of bracket creep is helping taxpayers keep more of the money we need to get through this,” said MacKay.